IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.09.2009 C O R A M: THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA and THE HONOURABLE MR.JUSTICE B.RAJENDRAN Writ Petition Nos.33766 of 2007, 1106, 1107, 1690, 1691, 2478, 2479, 3330, 3331, 4782, 5109, 5110, 28097, 1056, 1057, 1717, 1718, 2013, 2014 & 9142 of 2008, 10750 & 10751 of 2009 and connected Miscellaneous Petitions M/s. Southern Agro Engine Pvt.Ltd., No.24-A, Indurstrial Estate, Guindy, Chennai-32 rep. by it Manager-Finance Mr.R.Nandhakishore ..Petitioner in WP 33766/2007 M/s.Seaport Logistics Pvt.Ltd., Rep. by its Managing Director, M.S.Tajudeen, 42, Moore Street, First Floor, Chennai-600 001. ..Petitioner in WP 1106/2008 & 1107/2008 Smt.Vasanthi Mohan ..Petitioner in WP 1690/08, 1691/2008 Sri U.Baskaran ..Petitioner in WP 2478,2479/2008 M/s.Macro Marvel Projects Ltd., 813,Glenden Place, Poonamallee High Road, Kilpauk, Chennai -10 rep. by its Executive Director Mr.M.Ragukumar ..Petitioner in WP 3330,3331/2008 M/s.Archean Cranite Private Ltd., T.V.H.Beliciaa Towers, Phase-II, V Floor, Block No.94, MRC Nagar, Santhome, Chennai-28 ..Petitioner in WP 4782/2008 M/s.Western Agencies (Madras) Pvt. Ltd., rep. by its Managing Director Mr.K.C.Rajan, 109, Angappa Naicken Street, First Floor,Chennai-1. ..Petitioner in WP 5109,5110/2008 M/s. Annai Flour Mills Pvt.Ltd., 5,80 feet Road, Saligramam, Chennai. ..Petitioner in WP 28097/2008 https://hcservices.ecourts.gov.in/hcservices/ Dr.M.A.M.Ramasamy ..Petitioner in WP 1056,1057/2008 M/s. Altos Advisory Services Pvt. Ltd., 115, Nelson Manickam Road, Aminjikarai, Chennai-29, rep. by its Managing Director, Sri.A.E.Premanand ..Petitioner in WP 1717,1718/2008 M/s.Artec Products Pvt. Ltd., rep. by its Director, Sri G.Ramasubramanian, Raja Annamalai Building, N o.72 (Old No.19), Marshalls Road, Chenai-8. ..Petitioner in WP 2013,2014/2008 Paramount Heavy Carriers 65,Coral Merchant Street, Chennai-600 001. ..Petitioner in WP 9142/2008 1. Tube Investments of India Limited, (Represented by its Vice President–Taxation , "Dare House", 234 N.S.C. Bose Road, Chennai – 600 001. 2. Krishna Ramnath .. Petitioners in W.P.10750 & 10751/09 vs. Union of India Ministry of Finance, rep.by its Secretary, Department of Revenue, Central Secretariat, North Block, New Delhi 110 001 ..1st Respondent in WP 33766/07,1056 & 1057/08 2nd Respondent in WP 1106,1107,1690,1691,2478, 2479, 3330,3331,5109,5110, 28097,1717,1718,2013 & 2014, 4782/2008 1.Income Tax Officer (OSD) Company circle VI (2), 121, Nungambakkam High Road, Chennai 34 ..1st Respondent in WP 1106,1107/2008 1.Income Tax Officer, Ward-II (4), 121, Nungambakkam High Road, https://hcservices.ecourts.gov.in/hcservices/ Chennai 34 ..1st Respondent in WP 1690, 1691/2008. Deputy Commissioner of Income Tax, Business Circle -VIII, 1st Floor, Kannammmai Building, 611,Anna Salai, Chennai 6 ..1st Respondent in WP 2478,2479/2008 Assistant Commissioner of Income Tax,Circle Iv (1), Room No.430, 4th floor, 121, Uthamar Gandhi Road, Chennai-34 ..1st Respondent in WP 3330, 3331/2008 The Union of India, represented by The Secretary, Finance Department, North Block, New Delhi ..1st Respondent in WP 4782,9142/2008 Asst. Commissioner of Income Tax, Company Circle -III (3),Chennai-34. ..1st Respondent in WP 5109,5110/2008 Deputy Commissioner of Income Tax,Company Circle 1(1) Chennai-34. ..1st Respondent in WP 28097/2008 Assistant Commissioner of Income -Tax, Company Circle 1(1),121,Nungambakkam High Road,Chennai -34. ..1st Respondent in WP 1717, 1718,2013,2014/2008 The Assistant Commissioner of Income Tax, TDS Circle II(i/c), 21, M.G.Road, Chennai – 600 034. ..1st Respondent in W.P.No.10750 & 10751/08 2 The Income Tax Officer (OSD) Company Circle VI (3) 121, Mahatma Gandhi Road, Chennai- 34. ..2nd Respondent in WP 33766/2007 The Assistant Commissioner of Income Tax,company Circle 1(1) No.121, Nungambakkam High Road, Chennai-34. ..2nd Respondent in WP 4782/2008 https://hcservices.ecourts.gov.in/hcservices/ Assistant Commissioner of Income Tax, Range IX ,121, Mahatma Gandhi Road, Nungambakkam, Chennai-6. ..2nd Respondent in WP 9142/2008 2. The Assistant Commissioner of Income Tax, Large Tax Payer Unit, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar, Western Extension, Chennai – 600 101. ..2nd Respondent in W.P.10750 & 10751 of 2008 3. Central Board of Direct Taxes Rep. by its Secretary Central Secretariat, North Block, New Delhi -1 ..3rd Respondent in WP 1106, 1107,1690,1691,2478,2479,3330,3331, 4782,5109,5110,1717,1718,2013,2014/2008 2nd Respondent in WP 1056,1057/2008 Additional Commissioner of Income Tax, Company Range 1,121 Mahatma Gandhi Road, Aayakar Bhavan, New Block, VI Floor, Chennai -34. ..3rd Respondent in WP 1056,1057/2008 Union of India, (Represented by the Secretary, Ministry of Finance), Government of India, New Delhi...3rd Respondent in W.P.10750 & 10751 of 2009 W.P.No.33766/2007 Petition filed Under Article 226 of the Constitution of India praying to issue a "Writ of Declaration" declaring the provisions of clause (ia) of Section 40 (a) of the Income Tax Act introduced by the Finance (No.2) Act of 2004 with effect from 1st April 2005 as ultra vires and striking down the same in so far as it provides that the expenses in respect of which tax is not deducted at source or paid over to the Government within the time provided under Section 200 shall not be dedustible in computing the income. W.P.No.1106/2008 Writ of Certiorari calling for the records in PAN.No.AAGCS9972A/2A/GIR No.Sec.104 dated 27.11.2007 relating to the Assessment year 2005-2006 (W.P.No.1106/08) of the Ist respondent quashing the same in sofar as in the said proceedings the Ist respodnent disallowed the various expenses claimed by the petitioner invoking clause (i.e) of Sec.40(a) of the Income Tax Act on the ground that tax has not been deducted at source or paid over the Government, in respect of the payment covered by such expenses within the time prescribed under Sub Sec. (1) of Sec.200 of the Income tax Act. https://hcservices.ecourts.gov.in/hcservices/ W.P.1107/08 Praying to issue a writ of declaration, declaring the provisions of clause (ia) of Section 40(a) of the Income Tax Act introduced by the Finance Act No.2/2004 with effect from 1.4.2005 as ultra vires and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or paid over to the Government within the time precribed under Sub-Section (1) of 51c-200 of the Income Tax Act in computing the Taxable income. W.P.4782/2008 This petition filed under Art.226 of the Costitution of India praying to issue a writ of declaration, declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the finance act No.2 of 2004 with effect from 1.4.2005 as ultravires and striking down the same in sofar as it provides for the disallowance of expenses in respect of which tax has not been deducted at source or after deduction has not been paid over to the Government within the time prescribed under Sub-Section (1) Sec-200 of the Income Tax Act in computing the taxable income. W.P.No.1691/08 Declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the finance act No.2 of 2004 with effect from 1.4.2005 as ultravires and striking down the same in sofar as it provides for the disallowance of expenses in respect of which tax is not been deducted at source or paid over to the Government within the time prescribed under Sub-Section (1) Sec-200 of the Income Tax Act in computing the taxable income. W.P.1690/08 Praying to issue a writ of certioriari, calling for the records in PAN GIR No.ABLPV 1704c dated 28.12.2007 relating to the assessment year 2005-06 of the Ist respondent quashing the same in sofar as the said proceedings the first respondent has disallowed the various expenses claimbed by the petitioner invoking clause (ia) of Sec.40(a) of the Income Tax Act on the grund that tax has not been deducted at source or paid over to the government in respect of the payments covered by such expenses within the time prescribed under Sub.sec.(1) of Sec.200 of the Income Tax Act. WP 2478 / 08:- Praying to issue a writ of certiorari; calling for the records in P.A.N / GIR No.AAKPB7899J dated. 31.12.2007 relating to the Assessment year 2004-05 of the 1st Respondent quashing the same in so far as in the said proceedings the 1st Respondent has disallowed the various expenses claimed by the petitioner invoking clause (ia) of Sec.40(a) of the Income Tax Act on the ground that tax has not been deducted at source or paid over to the Government in respect of the payments covered by such expenses within the time prescribed https://hcservices.ecourts.gov.in/hcservices/ under sub sec.(1) of Sec.200 of the Income Tax Act. WP 2479/08 :- Praying to issue a writ of declaration, declaring the provisions of clause (ia) of Sec. 40(a) of the Income Tax Act introduced by the Finance Act No.2 of 2004 with effect from 1.4.2005 as ultra vires under Articles 14, 19(1) (f) 19 (1) (g) and 265 of the constitution of India and striking down the same in so far as it. Provides for the disallowance of expenses in respect of which tax is not deducted at source of paid over to the Government within the time prescribed under Sub-Sec(1) of Sec. 200 of the Income Tax Act in computing the taxable income. W.P.3330/08 :- Praying to issue a writ of certiorari calling for the records in PAN/GIR No.AACCM8816D/ MA 254 dated 31.12.2007 relating to the Assessment year 2005-06 of the 1st Respondent quashing the same in so far as in the said proceedings the 1st Respondent disallowed the various expenses claimed by the petitioner invoking clause (ia) of Sec.40(a) of the Income Tax Act on the ground that tax has not been deducted at source or paid over to the Government in respect of the payments covered by such expenses within the time prescribed under sub-sec (1) of Sec.200 of the Income Tax Act. W.P.3331 /08:- Praying to issue a writ of declaration, declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the finance Act No.2 of 2004 with effect from 1.4.2005 as ultra vires and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or paid over to the Government within the time prescribed under sub-sec(1) of sec.200 of the Income Tax Act in computing the taxable income. W.P.5109/08:- Declaring the provisions of clause (ia) of Section 40 (a) of the Income Tax Act introduced by the Finance Act No.2 of 2004 with effect from 1.4.2005, as ultra vires to Articles 14, 19 (1) (f), 19(1) (g) and 265 of the constitution of India and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or having been deducted not remitted to the Government within the time prescribed under sub section(1) of Section 200 of the Income Tax Act, in computing the taxable income. W.P.5110/08:- Praying to issue a writ of certiorari calling for the records in PA.No.AAACW1558Q dated. 31.12.2007 relating to the assessment year 2005-06 on the file of the first respondent, quashing the same in so far as in the said proceedings the 1st Respondent has disallowed the various expenses claimed by the petitioner herein revoking clause (ia) of Sec.40 (a) of the income tax act on the ground that tax has not been deducted at source or paid over to the government in respect of the payments covered by such expenses within the time prescribed under sub sec(1) of Sec.200 of the Income tax Act. W.P.28097/08 To issue a writ of certiorari calling for the records of the https://hcservices.ecourts.gov.in/hcservices/ first respondent in P.A.No.AADCA 9454A/AX3-072 dated 30.9.2008 for the assessment year 2006-07 in so far as it relates to the disallowance of various expenses under Sec.40(a) (ia) of the Income- tax Act 1961. W.P.1056/08: To issue a writ of certiorari calling for the records in G.I.No./PAN No.AAJPR 4449M/3783-R dated 29.11.2007 relating to the Assessment year 2005-06 of the 3rd Respondent quashing the same in so far as in the said proceedings the 3rd Respondent disallowed the various expenses claimed by the Petitioner invoking clause (ia) of Sec 40(a) of the Income Tax Act on the ground that tax has not been deducted at source or paid over to the Government in respect of the payments covered by such expenses within the time preseribed under sub-sec (1) of Sec.200 of the Income Tax Act. W.P.1057/08 : To issue a writ of declaration, declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the Finance Act No.2/2004 with effect from 1.4.2005 as ultra Vires and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or paid over to the Government within the time preseribed under sub Sec (1) of Sec.200 of the Income Tax Act in computing the taxable income. W.P.1717/08 To issue a writ of certiorari calling for the records in PAN/GIR.NO.AACCA 4539R/AX6-201, Dated 19.12.2007 relating to the Assessment year 2005-2006 of the Ist Respondent quashing the same in so far as in the said proceedings the Ist Respondent has disallowed the various expenses claimed by the Petitioner invoking clause (ia) of Sec.40(a) of the Income Tax Act on the ground that tax has not been deducted at source or paid over to the Government in respect of the payments covered by such expenses within the time preseribed under Sec.(1) of Sec. 200 of the Income Tax Act. W.P.1718/2008 To issue a writ of declaration declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the Finance Act No.2 of 2004 with effect from 1.4.2005 as ultra Vires and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or paid over to the Government within the time preseribed under Sub-Sec.(1) of Sec.200 of the Income Tax Act in computing the taxable income. W.P.2013/08 To issue a writ of certiorari calling for the records in PA/GIR.NO.AACCA 4623L/AX5-018, Dated 19.12.2007 relating to the Assessment year 2005-2006 of the Ist Respondent quashing the same in https://hcservices.ecourts.gov.in/hcservices/ so far as in the said proceedings the Ist Respondent has disallowed the various expenses claimed by me invoking clause (ia) of Sec.40(a) of the Income Tax Act on the ground that has not been deducted at source or paid over to the Government in respect of the payments covered by such expenses within the time preseribed under Sub Sec.(1) of Sec. 200 of the Income Tax Act. W.P.2014/2008 To issue a writ of declaration declaring the provisions of clause (ia) of Sec.40(a) of the Income Tax Act introduced by the Finance Act No.2 of 2004 with effect from 1.4.2005 as ultra Vires under Articles 14, 19(1) (f) 19 (1) (g) and 265 of the constitution of India and striking down the same in so far as it provides for the disallowance of expenses in respect of which tax is not deducted at source or paid over to the Government within the time preseribed under Sub-Sec.(1) of Sec.200 of the Income Tax Act in computing the taxable income. W.P.9142/2008 To issue a writ of declaration, declaring as ultra vires of the constitution of India, invalid and unconstitutional the provisions of Section 40 (a) (i) of the Income-tax Act 1961. W.P.No.10750 of 2009: Petition under Article 226 of the Constitution of India praying for a writ of Mandamus directing the respondents herein to forbear from enforcing or relying upon the provisions of Section 40(a)(ia) of the Income Tax Act, 1961 to disallow the revenue expenditure of the petitioners incurred on the purchase of Printed Stationery and Packing Materials for non compliance of Section 194C of the Income Tax Act, 1961 W.P.10751/2009 To issue a writ of declaration, declaring that Section 40(a)(ia) of the Income Tax Act, 1961 as beyond the legislature competence of the union of India under serial No.82 of list I of the seventh Schedule to the constitution of India, besides being void as infringing Articles 14, 19(1) (g) 265 and 300 A of the constitution of India and resultantly unenforceable. For petitioner : Mr. V. Ramachandran SC. for Mr. Joseph Praphakaran (W.P.33766/07) Mr.V. Ramachandran Sc.for Dr. Anitha Sumanth (W.P.1106,1107,2478,2479,3330,3331, 1056, 1057,1717, 1718,2013,2014/08) Mr.V. Ramasubramanian https://hcservices.ecourts.gov.in/hcservices/ Sc for S. Thiruvengadam (WP.1690 & 1691/08 Mr. N. Devanathan (W.P.No.4782/08) Mr.N. Viswanathan (W.P.5109 & 5110/08 Mr. V.S. Jaikumar for Mr. Janakiraman (W.P. 28097/08 Mr.V.S. Jaikumar for Mr. V.D. Gopal (W.P.9142/08) Mr.C.Natarajan, SC for Inbarajan (W.P.10750 & 10751/09 For Petitioners in : Mr.C.Natarajan W.P.No.10750/2009 Senior Counsel for Mr.N.Inbarajan for Respondant: Mr.K.Subramanian for R.1 (W.P.1106, 1107/08 for R1 (W.P.3330/08,3331/08 Mrs. Pushya Sitaraman for R3 (W.P.1106,1107,2478,2479,3330, 3331/08 R2(W.P.4782/08) R2 & R3 (W.P.1056,1057/08 R1 & R3 (W.P.5109,5110,1717,1718, 2013,2014/08) Mr.J.Naresh Kumar SC for IT (W.P.2478,2479) R1 (w.p.28091/08 R2 (W.P.9142/08) for Respondents: Mrs. Rushya Sitaraman for R2 in W.P.33766/07 do for RR1 and 3 in wP 1690,1691/08 do for R1 and R2 in WP.Nos.10750,10751/09 https://hcservices.ecourts.gov.in/hcservices/ For Respondents in : Mrs.Pushya Sitaraman W.P.No.10750/2009 Senior Standing Counsel for Income Tax Department. - - - - - C O M M O N O R D E R (Order of the Court was made by F.M.IBRAHIM KALIFULLA, J.) The petitioners in W.P.No.10750 of 2009, seek for the issuance of a Writ of Mandamus to direct the first and the second respondent to forbear from relying upon the provisions of Section 40(a)(ia) of the Income Tax Act, 1961 (herein after referred to as 'the Act') and to disallow the revenue expenditure of the petitioners incurred on the purchases of the printed stationery and packing materials for non-compliance of Section 194C of the Act. 2. In W.P.No.10751 of 2009, the very same petitioners seek for the issuance of a Writ of Declaration to declare Section 40(a)(ia) of the Act as beyond the legislative competence of the Union of India under Serial No.82 of List-I of the Seventh Schedule of the Constitution of India besides being void as infringing Articles 14, 19(1)(g), 265 and 300A of the Constitution and consequently unenforceable in law. 3. In all these writ petitions, the common challenge is to Section 40(a)(ia) of the Act to declare as ultra vires of the Constitution on the grounds stated therein. All the writ petitions are therefore disposes of by this common order. 4. Arguments were heard in common, learned senior counsels M/s. C.Natarajan and V.Ramachandran as well as other learned counsel viz., M/s. Joseph Prabhakar, N.Devanathan, N.Viswanathan and V.S.Jayakumar appeared on behalf of the petitioners. Mrs.Pushya Sitaraman, Mr.K.Subramanian and Mr.J.Naresh Kumar learned standing counsel for the Income Tax Department appeared on behalf of the Revenue. 5. Mr.C.Natarajan, learned senior counsel appearing for the petitioners in W.P.Nos.10750 & 10751 of 2009 contended that while contractors business has no nexus to the determination of profits and gains of the business of the petitioner, Section 40(a)(ia) mutates itself to tax the petitioners at a disproportionate rate and quantum while purporting to address Section 194C and the contractors. According to him the effect of Section 40(a)(ia) is so grossly unreasonable that it imposes tax liability on the business of the petitioners even if the contractor himself paid the tax in his returns in the absence of TDS effected by the petitioners. 6. According to the learned senior counsel, while the obligation to deduct TDS is fixed at 2% under Section 194C, for any default committed, tax liability on the whole of the sum paid to the contractor is levied at 30% plus 10% surcharge and cess, as an implication of Section 40(a)(ia) which is arbitrary, unreasonable and https://hcservices.ecourts.gov.in/hcservices/ violative of Article 14 besides operating as an unreasonable restriction of Article 19(1)(g) of the Constitution. 7. The learned senior counsel pointed out that under Chapter XVII-B of the Act, there are other provisions for recovery of the TDS failed to be recovered as contemplated under Section 194C with penalty, nevertheless, Section 40(a)(ia) imposes recovery of arbitrary and disproportionate tax from the petitioners. The proviso to Section 40(a)(ia) does not in any way mitigate the hardship caused by providing adjustment or refund of the money, the collection of which would be otherwise illegal. 8. According to the learned senior counsel, the proviso to Section 40(a)(ia) is illusory, in as much as under Section 194(C) TDS deduction is to be made at the point of payment which does not provide for payment from the funds of the petitioner and it also does not provide for effecting a deduction in the subsequent year. It is illusory because the proviso also does not provide for any obligation on the part of the contractor to make the recovery at any subsequent stage than the one set out under Section 194C. It was also contended that payment recognised under the proviso is not covered by Section 199 and thereby no benefit would be made available to the contractor. 9. It is further contended that the proviso is onerous since it shifts the business expenditure of the previous year to the subsequent year which when computed along with the regular expenses of the subsequent year exaggerating the expenditure to yield huge losses and thereby neutralises the profits with mere carry forward facility and that the tax recovered in the year of assessment can hardly be secured back, even if business is carried on for so long with profit to absorb the losses of the subsequent year. 10. It was lastly contended that every assessee has got a right to terminate his business and if the business is terminated in the subsequent year or thereafter, the tax recovered by virtue of Section 40(a)(ia) in the previous year can never be off set. 11. Mr.V.Ramachandran, learned senior counsel appearing for the petitioners in W.P.Nos.1106, 1107, 1690, 1691, 2478, 2479, 3330, 3331, 1056, 1057, 1717, 1718, 2013 and 2014 of 2008, contended that the object of introduction of Section 40(a)(ia) by the Parliament was to augment the TDS recovery provided under Chapter XVII-B, for which there are various provisions contained in Chapter XVII C,D,E and F in as much as the entire Chapter XVII deals with recovery of tax in different situations by different modes. 12. According to the learned senior counsel, while Chapter XVII-B deals with the recovery of tax to be deducted at source, the other sub-chapters C, D, E and F provides for other recovery procedures and that the TDS procedure alone cannot be treated differently by imposing a harsh and more disadvantageous conditions. 13. The learned senior counsel by referring to Sections 201, 271C, 276B and 276BB contended that for non-compliance of TDS https://hcservices.ecourts.gov.in/hcservices/ provisions under Chapter XVII-B, when such measures have been provided under those provisions it will be wholly arbitrary, discriminatory and unreasonable to have imposed much more onerous conditions under Section 40(a)(ia) of the Act. By filing various statements before this Court, the learned senior counsel attempted to demonstrate that such consequence by virtue of Section 40(a)(ia) would destroy the business of an assessee. 14. According to the learned senior counsel, the implication of Section 40(a)(ia) is irrespective of the circumstances in which the deduction failed to be made and therefore it is arbitrary. By relying upon the decisions of the Hon'ble Supreme Court in the case of Coca Cola and Eli Lily, the learned senior counsel contended that when the Hon'ble Supreme Court has held that the liability of an assessee under Section 201 on failure to deduct or pay tax disappears once the recipient has paid the tax and even penalty cannot be levied if there was a reasonable cause for non-deduction, it should be held that Section 40(a)(ia) cannot be invoked in the case were the recipient had paid the tax. Absence of such a relief under Section 40(a)(ia) makes the provision arbitrary. 15. The learned senior counsel by making a comparison to Section 40A(3) relating to any expenditure incurred by an assessee other than by way of A/c payee cheque in the event of such expenditure exceeding Rs.20,000/- was considered as harsh and to offset its rigour, Rule 6DD came to be incorporated providing for certain specified circumstances under which the rigour of Section 40A (3) can be excluded, similar such benefit should be read down into Section 40(a)(ia) of the Act. 16. The learned senior counsel in his submissions also contended that the provision of reading down to the effect that if an assessee deducts and pay the TDS before the assessment is made or at any rate before the filling of the return, the said Section will not get attracted as is provided under Section 40D of the Act. One other contention