This article has been written by Indrasish Majumdar. It has been edited by Ruchika Mohapatra (Associate, LawSikho).
Table of Contents
The Income Tax Act has provisions of two kinds: one that governs what kind of expenditures are permissible and the other that governs what kinds of expenditures are not permissible, i.e. the latter provision overrides the other provisions in the act. Overriding provisions should always be enforced first, and only then can the allowability of expenditure be determined under PGBP. If the expense is not permitted by any provision, the expenditure is disallowed. Provisions prohibiting expenses range from specific to generic. Activities conducted during an accounting period or revenue received over a period the gains of which do not continue past this period is referred to as an expenditure. Disallowing an expenditure when calculating profit and gains for a company or business implies that the tax authority would not allow the benefits of such expenses, and the assessee would have to pay taxes on such expenditures by remitting it back to net earnings. Any expenditure can be disallowed for one of two reasons:
- The tax amount is not deducted while making the payment which is required to be deducted from certain expenditures.
- The business or the conduct of the profession does not relate explicitly to the expenditure.
Any expenditure that is disallowed is subject to a 30% rate of taxation (25 % for certain companies) but interest, liability, and conviction clauses are often also attracted alongside. When assessing whether or not a given expense is deductible, the first step is to see if the deduction is specifically prescribed by any clause of the “Income Tax Act”. Or else, Sec. 37 can be used to determine if the expenditure is allowable. Non-deductible costs or payments are provided under Sections 40 and 40A.
Expenses disallowed under sec. 37(1)
Even though expenses disallowed under PGBP are primarily discussed under Section 40 and 40A. There are two instances under Section 37 when expenses are disallowed:
- Only expenditures not specified under “Sections 30 to 36” and expended entirely for the company is permitted as a deduction when calculating taxable business profits under “Section 37(1) of the Income-tax Act of 1961” . The question at hand is whether CSR (Corporate Social Responsibility) spending is deductible under “Section 37”. For “Section 37(1)”, any expense sustained by an assessee on ventures concerning “CSR” per “Section 135 of the Companies Act, 2013” is not to be considered to have been sustained for the firm and, as a result, shall not be permitted as a deduction under “Section 37”. The “Explanatory Memorandum” to the “Finance (No.2) Bill, 2014” however clarifies that “CSR” expenditure of the kind defined under “sections 30 to 36” is allowable as a deduction, provided certain requirements are met.
- Political party advertisements in souvenirs: Section 37(2B) prohibits any deduction for advertising expenditures covering donations made to individuals carrying out business/profession in calculating the “profits and gains of the business or profession”. The Act expressly states that this clause concerning disallowance would extend despite everything to the contrary specified in “Section 37”. Expenditure for political reasons, in other words, will be disallowed even though the assessee incurs the expense in the capacity of a merchant and the balance is entirely incurred for the company’s benefit. As a result, a taxpayer will be ineligible for reimbursement for expenditures expended on ads in any brochure written by any political party, irrespective of whether the Election Commission of India has recorded it or not.
Section 40: amounts not deductible (clauses mentioned under “chapter iv”)
Subchapter D of “Profit & Gains of Business or Profession” enumerates the method for the computation of aggregate income. The provisions under the chapter deliberate on the non-deductible expenses while calculating revenue from “profits and gains in business and profession” under the “amounts not deductible” clause. “Section 40” clause (a) explicates amounts that are not deductible due to inability to comply with TDS (“tax deducted at source”) provisions, as well as prohibit deductions for payment of specific taxes mentioned therein.
- Any amount relating to professional services that are taxable under the “Income Tax Act” and is charged either 1) outside of India or 2) within India, including “interest,” “royalty,” and “fees.” 2) or to a non-resident of India, but not a corporation or a foreign enterprise, on which tax was not withheld or paid in the previous year or the year before the expiration of the time limit specified under “Section 200(1).
However, concerning any such amount where :
- in any subsequent year, tax has been deducted
- or has been deducted in the previous year but reimbursed post the time specified under “Section 200 (1)” has expired.
Such a sum is deemed deductible when determining taxes for the preceding year when the tax was originally charged. The reception of such income must be subject to tax to be deemed chargeable under “the Income Tax Act”.
Disallowing business expenditure for non-deduction of tax to a resident payee on payment (Sec. 40(a)(ia)
Amounts including “interest”, “commission or brokerage”, “rent”, “royalty”, “fees for professional tasks”, “fees for technological services”, accrued to a residential contractor is disallowed as a deduction in the year when the expense was accrued while calculating profits taxable under “Profit and gains of Business or Profession”, if –
- If tax has not been deducted, concerning such expense
- If the due date enumerated under Sec. 139(1) has not been adhered to in paying the deduction amount
The Section enumerates 30% of any amount payable to a resident, under Chapter XVII-B, on which source tax is deductible, under the above-mentioned circumstances shall be disallowed.
In the instance of any such amount, however-
- If in any forthcoming year tax is deducted, or
- If on or before the last date of payment under “Sec. 139(1)” the deduction has not been paid.
The sum will be deducted from the revenue of the past year when the tax was paid.
During the year 2019-2020 tax on rent has been deducted which was paid to Mr X. The tax amount is due for payment by 31st July/31st October 2020 such that the 30 % rent tax is not disallowed in calculating the income for A.Y (assessment year) 2020-2021. Tax deducted during the P.Y (previous year) 2019-2020, in respect of such rent, if it has been paid after “31st July/31st October 2020”. 30% of such rent in the payment year would be allowed as a deduction.
The below-mentioned expenditures/payments were sustained by Mr Rathore, a resident individual in the F.Y 2018-2019. In the year-end 31.3.2018, Mr X’s turnover was 1crore and 50 lakhs.
- To a resident partnership Firm, interest was paid of Rs. 60,000 without deducting tax at the source.
- Without deduction of “tax at source”, an amount of Rs. 5,00,000 was paid to a resident individual as a salary
Under “Sec. 40(a)(ia) of the Income-Tax Act, 1961” presuming the assessee forgets to deduct “tax at source”, or is unable to remit the tax to the credit of the central government after deducting it at source, answer whether disallowance will be attracted under the provisions of the above-stated section.
Under “Section 40(a)(ia) of the Income Tax Act, 1961” where the assessee fails to deduct “tax at source”, or even after deducting the “tax at source” fails to remit the same within the time as stipulated, to the credit of the central government, shall attract disallowance.
- Under “Section 194A” the liability to deduct “tax at source” from the interest paid to a resident surfaces when the total turnover in the preceding year, in the case of an individual, exceeds Rs. 1 crore. In the immediate case, since the turnover is more than Rs.1 crore, the individual is entitled to deduct “tax at the source”. Therefore the disallowance under “Sec. 40(a)(ia)” is attracted in the immediate case.
- Under “Section 40(a)(ia)” a 30% disallowance of the amount payable, would be attracted, concerning all tax-deductible sums under “Chapter XVII-B”. “Chapter XVII-B” entails Sec. 192 , wherein the requirement to deduct tax at source from salary paid, is mentioned. Even if the turnover amount in the immediately preceding year does not exceed Rs. I crore, the obligation to deduct tax at source shall arise in the hands of all assessee-employers.
In the current scenario, therefore, for the failure to deduct “tax at source” under “Section 192” from the salary paid, disallowance will be attracted. However, the disallowance will apply to “30%” of the total sum of salary paid, with a deduction of “tax at source”.
The amounts mentioned below were credited to the resident payees account by C ltd. in March 2019 without TDS. Analyse the consequences of C ltd. not deducting the tax at source on the amounts mentioned below during the F.Y 2019-2020, presuming tax has not been paid by the resident payees, which was required to be deducted by the company.
|Particulars||Amount in Rs.|
|Salary to employees ( paid and credited in March 2019)||14,00,000|
|Remuneration of directors ( credited in March 2019 and paid in August 2019)||20,000|
What would be your answer if C Ltd. had deducted the tax in May 2019 on the remuneration of directors and remitted the same in September 2019?
Not deducting tax at source on any amount to be paid to a citizen on which tax is deductible at source under “Chapter XVII-B” will result in disallowance per “Section 40(a) (ia)”. As a result, failure to deduct tax at source on any amount paid as wages on which tax is deductible as per “Section 192”, or any amount paid/credited as remuneration to directors on which tax is deductible under “Section 194J” will attract disallowance of 30 % as per “Section 40(a) (ia)”. Whereas, while remitting salaries tax must be deducted at the time of payment, for director’s remuneration the tax must be deducted either at the time of payment or at the time of crediting the amount to the payee’s account, whichever is earlier. Consequently, since the salary was compensated in March 2019 and the director’s remuneration credited in that year, tax is deductible in all scenarios. As a result, the sum to be disallowed under “Section 40(a)(ia)” when calculating company profits for the fiscal year 2019-20 will be as follows:
|Particulars||Amount paid in Rs.||Disallowance u/s 40(a)(ia) at 30%|
|Salary (under section 192 tax is deductible)||14,00,000||4,20,000|
|Remuneration to Director’s ( under section 194J tax is deductible)||20,000||6000|
While calculating the business income for the F.Y 2021-2022 the amount of Rs. 6000 would be allowed as a deduction if next year on the director’s remuneration tax is deducted i.e F.Y 2020-2021 at the time of payment and the amount is paid to the government.
Often an assessee is unable to deduct the whole or a portion of the tax on any such amount but is not considered an assessee in default under the first proviso to “Section 201” because –
- The return of income has been provided by such payee under “section 139”;
- The amount has been considered for calculating the “return of income” by the payee and
- The requisite tax on the income in the “return of income” has been paid as disclosed by him. Additionally, the payer needs to furnish a certificate from an accountant of such return of income, in the manner as may be prescribed
It can be concluded, as per the circumstances mentioned above the assessee has paid and deducted the tax on the respective amount. The date for the payment and deduction of taxes by the payer is equivalent to the date for furnishing the “return of income” by the payee. Under Section 40(a)(ia) 30 % of such expenditure on which “tax at source” was not deducted by the payer shall be disallowed because the date of the payee providing the “return of income” is the same date on which the payer has paid or deducted the “tax at source”.
“Disallowance of any sum paid to a resident at any time during the previous year without deduction of tax under section 40(a)(ia) [Circular No.10/2013, dated 16.12.2013]”.
The Judiciary has provided differing interpretations of “Section 40(a)(ia)” and the provisions entailed therein, particularly concerning non-deductible amount in ascertaining the income chargeable under the title of ‘Profits’. According to certain court decisions, the criteria for disallowance under “Section 40(a)(ia)” encompass the sum that remains payable at the commencement of a particular fiscal year only and cannot be used to disallow the amount that was paid during the previous year without deducting tax at source. The CBDT opines the requirements of “Section 40(a)(ia)” will not only include sum due for payment as of “31st March” of the previous year but will extend to amounts payable at any period within the year, as well.
The legislative terms are abundantly clear in clarifying the word “payable” will mean “amounts charged during the previous year” under “Section 40(a)(ia)”. The Circular further clarifies that if any High Court rules on a question in contradiction to the above stated “Departmental View,” the “Departmental View” would no longer be applicable in the region coming under the jurisdiction of the concerned “High Court”.
In responding to the question of whether disallowance under “Section 40(a)(ia) of the Income Tax Act, 1961” is limited to the amount “payable” and not the amount “already paid,” the bench of AM Khanwilkar and Dinesh Maheshwari, JJ observed that the term “payable” is indicative of transactions that attract the obligation for deducting tax at source and has not been included in the provision in question to clarify based on whether the payment has been rendered or not, any specific category of default. The Court stated that the word “payable” was used in “Section 40(a)(ia) of the Act” only to denote the form of payments made by the assessees to the payees and that the contention that the phrase “payable” be interpreted in contrast to the expression “paying” was without substance and could be dismissed, the court further opined.
Furthermore, the Court stated that “Section 40(a)(ia)” is not a stand-alone provision; however, it contains one of the additional consequences specified in Section 201 of the Act for failure to comply with the rules of Part B of Chapter XVII of the Act.”
The Court explained the rationale of the act, stating that “Section 194C” is placed under “Chapter XVII of the Act” under the subject “Collection and Recovery of Tax,” and that special provisions are made in the Act to ensure that the requirements of Section 194C are complied with, along with enumerating the consequences of default. “Section 200” expressly states that the individual deducting tax is required to deposit and file a declaration to that effect. The repercussions of failing to deduct or pay the tax are mentioned under “Section 201 of the Act”, which places the defaulting individual in the category of “the assessee in default in respect of the tax,” in addition to any other consequences that he or she may face. “Section 40 of the Act”, and specifically the provision sub-clause (ia) of clause (a), allows for one of such repercussions.
As a result, the court opined since the duty enumerated under “Section 194C” of the Act is the cornerstone of the remedy provided by “Section 40(a)(ia) of the Act”, recourse to the former is unavoidable in the understanding of the latter, the Court stated that the framework of these provisions indicates that the failure to observe the preconditions of “Part B of Chapter XVII” of the Act leads to the consequence mentioned under “Section 40(a)(ia)” of the act. Consequently, only the conditions of “Part B of Chapter XVII” of the Act, including “Sections 194C”, “200”, and “201”, could accurately describe the provisions entailed in “Section 40(a)(ia) of the Act”.
Tax Deducted At Source On Non-Resident Income (Section 195)
Any individual liable for paying any sum or interest chargeable under this Act (other than salary) to a “non-resident”, who is not a “corporation” or a “foreign entity”, shall deduct income tax at the rate in effect, on the date of crediting income to the payee’s accounts or on the date of money order, whichever is earlier, by issuing a draft or cheque, or by any other method. The word ‘interest’ has a broad scope that involves interest on the outstanding purchase price paid in any manner including any means of an irrevocable letter of credit. Interest is not included in the cost price and is assessable as interest. Failure to deduct tax on interest charged out of India prevents the assessee from claiming an interest deduction. The discounting charges on discounting Bills of Exchange are not included in Sec. 2 (28A), which defines interest.
X Business collected payment from a Singapore-based company net of the discounting charges upon subsidizing its export sales bills. Such expenditure was disallowed by the “Assessing Officer” under “Sec. 40 (a) (i)” for failing to subtract tax at source per “Sec. 195”. The obligation to deduct tax under “Sec. 195” is not raised in the process because discounting costs are not equivalent to interest payments, and therefore deduction of such expenses cannot be denied to X Company.
“Section 40 (a) (ia) of the Income Tax Act of 1961” emphasises that expenditures protected under certain specified TDS provisions charged to residents and debited to the “Profit & Loss Account” shall not be permitted as a deduction while calculating profits under “Profit and Gains of Business or Profession” if:-
- If the tax has not been “deducted at source”
- TDS but the same has not been remitted, or
- The expenditure will be permitted to be deducted in the year the tax is repatriated if the expenses debited and the tax deducted in the previous year is not according to the time specified under “section 200”.
Section 40 (a) (ia) entails the following payments:
- Interest charged under section 194A
- “Commission or brokerage u/s 194H”
- “Professional or technical charges u/s 194J”
- “Sub Contractors and Contractors u/s 194c”
According to the provisions of the TDS section mentioned above, when the account of a payee is credited/paid (whichever earlier) with an amount, deducting tax at the source is a prerequisite. The money when credited to the suspense account or some other account, it is to be regarded as an amount credited to the payee’s account and tax must be deducted at the source. Consequently, tax has to be deducted at source, even on provisions made in the account books on which provisions relating to TDS can be applied.
Cit v. Chandabhoy And Jassobhoy
The Revenue had filed an appeal against the order of the CIT (A)-III, Mumbai, dated October 20, 2009. The assessee is a partnership company of Chartered Accountants, and the A.O. claimed that payments rendered to certain consultants hired by the Chartered Accountants’ firm were in the form of fees for advisory services, and thus the requirements of “Section 194J” will apply. The Assessee reported that the consultants served as full-time staff for the company. They were not permitted to take on other jobs or duties on their own, and they were granted annual leave and all compensation other than a bonus, gratuity, and P.F.
- Whether the consultants were the workers of the company,
- Whether tax was withheld under “Section 192 of the Income Tax Act”, and
- Whether considering that these individuals had submitted their returns using Form 16 provided by the Assessee firm, their income does fell under Section 194J.
The A.O. decided that there is no employee-employer association and that tax was deductible by the Assessee under Section 194J. Since Assessee did not deduct tax, the amount alleged of 26,75,535/-was to be disallowed under “Section 40 (a) (ii)”. The matter was referred to the CIT (A), who, after reviewing the problem and the Assessee’s responses, removed the addition by saying as follows:-
The deduction of tax rendered by Appellant, despite being made under Section 192, was not questioned by AO, nor was the TDS deposited in government account been contested, nor has the authenticity of payment to IHC been called into question by AO. As a consequence it was deemed, the fees are now deductible under the Statute. These were disallowed owing to an interpretation of the clause in which the transaction is to be regarded, i.e. Section 192 or Section 194J. Without exception to the ruling in paras 3.6 and 3.6.1, it was thought that even though expenditures were found to be under Section 194J by A.O., the tax previously withheld by Appellant should have been regarded against due under Section 194J and a shortfall of TDS, if any, might have been arrived at. The resultant lack of TDS, along with any interest, may have been deemed a liability under the I.T. Act and payable by the Appellant. The disallowance of the whole expenditure of Rs. 26,75,535/-, the validity of which has not been called into question by the AO, is not reasonable.
The Assessee hired about 18 contractors with whom it entered into two-year contracts that were reversible at the discretion of each party, and they were paid set amounts with no profit sharing. These consultants were not permitted to accept any private tasks and worked full-time with the Assessee company. There is little disagreement the court opined about the tax deduction under Section 192, and the reality that these salaries were recognised as wage payments in their assessments. It is also undisputed that the overall sum paid for 18 consultants is just Rs. 26,75,535/-, suggesting that they are workers rather than skilled consultants. It is therefore not accurate that the Assessee has made no deductions. Since the assessee has deducted tax under Section 192, the court opined that the requirements of Section 40 (a) (ii) do not apply, since the stated provision may be applied only in the event of non-deduction of tax, not in the event of a reduced deduction of tax. In light of the arguments stated above, the court rejected the Revenue’s argument that the amounts charged to the employees should be disallowed under Section 194J. Revenue’s appeal is without substance based on the reality of the event. As a consequence, the CIT order’s was confirmed and the Revenue’s appeal was rejected.
The case was important in clarifying the point that a short deduction of TDS is not a criterion for disallowance if, for reasons of the difference of opinion, there is a shortfall on the account.
HCC Pati Joint Venture v. Cit
In the recent case of “HCC Pati Joint Venture”, the Mumbai bench of the “Income-Tax Appellate Tribunal” opined that regardless of whether an assessee is allowed to claim a refund of excess tax paid or have it settled under “the Income Tax Act, 1961” against tax liability. The Assessee is not entitled to return the TDS reduced from the payment made and adjust it with the taxes paid in excess, earlier.
The assessee outlined the following issues in this appeal: The assessee had accepted some payments made on different dates for subcontracting expenditures during the fiscal year in consideration. According to the tax audit study, the AO has determined that all such expenditures are allowable under “section 40 (a) (ii)” amounting to Rs.2,12,736/-. The AO also claimed that the assessee withheld tax on payments rendered to various parties for certain subcontracting costs but not deposited during the fiscal year or before the due date. The sum amount of these payments is Rs.73,95,380/-. The AO sent a legal notice to the assessee, asking that he show cause why these expenditures ought not to be disallowed under “Section 40 (a) (ii) of the Act”. The assessee informed the AO that there was an excess tax deposit of Rs.1,26,417/- during the fiscal year 2003-04 under IT A No. 5743/Mum/2009 3 (The assessment year 2005-06). A percentage of the additional sum was adjusted against the liability of the current year, accordingly.
After reviewing the submissions and details of the event, the AO determined that Rs.73,95,380/-had been received. However, a sum of Rs.32,87,534/-was paid to “the profit and loss account”. Although the terms of law authorise and disallow such charges alleged by the assessee, the balance deducted from “the profit and loss account” is limited to “Rs.32,87,534/”. Accordingly, the AO attached Rs. 2,12,736/-and Rs32,87,534/-to this account, totaling Rs.35,00,207/-. The assessee contested the disallowance of “Rs.32,87,534/” under “Section 40 (a) (ii) of the Act”.
The decision of the “AO’s” was upheld by the “CIT(A)” upon appeal after weighing the contrary points and the legal background. According to “Board Circular No.285 dated 21.10.1980”, there is no doubt that the Board explained and issued orders that the excess expenditure may be balanced against the current tax obligation, and any balance sum remaining could be repaid to the assessee. In the case of “BASF (India) Ltd and others v/s W Hasan CIT”, stated in “280 ITR 136 (Bom)”, the Hon. The Jurisdictional High Court held that the stated memorandum creates a disproportionate right in favour of the deductor for repayment of TDS. The court contended there is no dispute concerning the fact that the assessee has the right to a refund of the excess TDS amount. The court argued the problem is not a reimbursement of TDS overpayments or optimization of TDS overpayments against existing tax liability.
The question before the court is the denial of an application for expenditure because the assessee withheld the tax but did not deposit it with the authorities within the time limit specified by the law and section 40 (a) (ii). The irreplaceable fact is that a payment was made by the assessee to the subcontractor and taxes were levied, but did not deposit the same with the government presuming that the assessee had balanced the same against the surplus payment in years before.
The rules of “section 40 (a) (ii)” are akin to certain extra measures to ensure that the tax (TDS) is deducted and deposited on time. More than the required amount was paid by the assessee, and the deductor was granted an opportunity by the “CBDT to demand a refund or modify the surplus cost. The compensation and request of excess payment must be settled by the revenue authorities. However, in the guise of the aforementioned assertion, the court opined the assessee can not withhold the excess deposit of the “TDS” withdrawn by the assessee on the transaction during the following year.
The assessee is required to deposit “the TDS” per the Act’s requirements. Since the TDS deducted by the assessee is not the assessee’s tax duty, but the assessee is expected to report it to the government, non-deposit of the TDS deducted by the assessee is a clear breach of the Act’s laws. When TDS is not deducted from a bill, the charge is only permitted as an expense if the assessee meets the requirements as per “section 40 (a) (ii)”. As a consequence, regardless of whether the assessee is entitled to a reimbursement or to get it balanced against the tax liabilities under the terms of the Act, the assessee can not withdraw the TDS deducted, and if the assessee does so, irrespective, the requisite provisions of the Act are invoked.
The Mumbai tribunal’s decision, in this case, is significant in that it states that when TDS is deducted by the assessee on payments made by him, the same must be submitted to the government within the time frame specified. If the taxpayer fails to do so, “Section 40(a)(ia) of the Income Tax Act of 1961” will be attracted, and the request for disallowance of expenditure will be denied. However, the disallowance would not impact the Assessee’s right to claim the adjustment or refund against the current tax liability.
S.B Builders And Developers v. Assessee
The assessee-appellant is a partnership company involved in the construction and development of housing projects. The appeal in concern deals with the assessment year 2006-07, which stems from the assessment order issued by the Assessing Officer on December 31, 2008, under “Section 143(3) of the Income Tax Act”. The assessee had just one housing scheme at hand during the accounting year in concern, which was “Shivdarshan Co-op. Hsg. Society at Palm Beach Road, Navi Mumbai.” The assessee was unquestionable, entitled to the deduction under “Section 80-IB” concerning the housing project.
Profits from this venture were recorded in the profit and loss account at Rs.3,76,78,403 and were believed to be deductible under the above-stated section. The Assessing Officer approved the claim. However, he discovered that the assessee had failed to deduct tax on such payments relating to the cost of building, RCC consulting, architect’s services, commission, and professional fees totalling Rs.4,50,12,485 even though it was necessary to do so, and hence they cannot be permitted as a deduction as specified under “section 40(a) (ii)”. As a result, when calculating the profits from the company, he disallowed and applied back the above sum to the net profit as indicated in the “profit and loss account”, yielding a gross total income of Rs. 8,26,90,888. However, while enabling deduction under “section 80-IB(10)”, he only permitted Rs.3,76,78,403 and arrived at an income of Rs.4,50,12,485 against which tax was paid.
Against the assessment, an appeal was filed by the assessee with the “CIT(A)” claiming before the court that the “Assessing Officer” could have permitted deduction of the entire income of Rs.8,26,90,888 after rendering the disallowance “u/s.40(a)(ii)” since he had calculated the profits of the company (housing project) at the aforesaid figure. It was also argued that the disallowance rendered under section “40(a)(ii)” was incorrect.
The “CIT(A)” rejected the assessee’s argument that the disallowance was rendered in error. Concerning if the assessee will be entitled to the deduction “u/s.80-IB(10)” in respect of income measured after rendering the disallowance “u/s.40(a)(ii)”, he believed that this matter had not been expressly raised before him as a basis of the appeal, but had only been posed in the written submission before him. Having said that, he went on to determine the problem in paragraph 4 of the impugned order, holding that the disallowed expenditure cannot be called income produced by the industrial undertaking since there is no connection between the expenditure disallowed and the industrial undertaking. In other words, he ruled that, in terms of disallowed spending, the industrial undertaking is not the basis of the same, and that section 80-IB(10) should only refer to income “generated” from the industrial undertaking.
In this view of the matter, and after referring to various authorities, including Supreme Court judgments in “CIT vs. Sterling Foods (1999) 237 ITR 579 (SC)”, “Pandian Chemicals Ltd vs. CIT (2003) 262 ITR 278 (SC)”, and “Liberty India vs. CIT (2009) 317 ITR 218 (SC)”, he opined that the assessee was not eligible to the deduction “u/s.80-IB(10)” concerning the disallowed expenditure of Rs.4,50,12,485 and that the “Assessing Officer” was right in restricting the deduction to the profit of Rs.3,76,78,403 as shown in “the profit and loss account”. In the further appeal before the Tribunal, the assessee has raised concerns about the “CIT(A)” decision )’s of not to admit the additional ground raised by the assessee in writing before him regarding the non-allowance of the deduction “u/s 80-IB(10)” because of the sum disallowed “u/s.40(a)(ii)”, as well as the “CIT(A decision )’s” on the criteria. The ground against the non-admission of the claim “u/s.80-IB(10)” is empirical because, after initially stating that he will fail to entertain the claim in the lack of a specific additional ground of appeal, the “CIT(A)” has continued to determine the claim on merits.
The income tax appellate authority, Mumbai pointed out the profits of the housing development are to be calculated at Rs.8,26,90,888 after putting it under the purview of section 40(a)(ii) and disallowing payments totalling Rs. 4,50,12,485 from which tax has not been deducted on time due to the semantics of “section 80AB r/w section 29”. The Supreme Court stated this in the case of “Cambay Electrical (supra)”. The court also referred to the binding decisions of the “Hon’ble Bombay High Court”, namely: “CIT vs. Albright Morarji and Pandit ltd.”, “Grasim Industries Ltd. vs. ACIT”, and “Plastibends India Ltd. vs. Additional CIT and others”, on the relationship between “section 80AB” and the other provisions under the head “C – Deductions in respect of certain incomes” under “Chapter VI-A”.
The court has noted that section 80AB has an overriding impact in that it applies “notwithstanding everything found in that section,” the linkage being to any section under the above heading in “Chapter VI- A”, in terms of calculating the income available for the deduction. When the legislative background is such, backed by binding precedents, the court ruled that deviating from them was impermissible. One can only assume if “section 80AB”, as it currently exists and with the wording used therein, has proven satisfactory in coping with the specific controversy that has emerged in this situation, but the solution for the same lies somewhere else. The court took note of the first proviso to “section 92C of the Act”, which states that no deduction under “sections 10A”, “10AA”, “10B”, or under “Chapter VI-A”, shall be permitted in respect of the sum of income by which the assessee’s gross income is increased after income calculation under this subsection.
The clause allows for the calculation of an arm’s length price regarding an overseas purchase, and the result of the provision is that if an amendment is rendered under the grounds that the price paid is not at arm’s length, the extra value would not be excluded under the above provisions. Given the judgments of the “Hon’ble Supreme Court” and the “Bombay High Court” mentioned above, as well as the ratio defined therein, the court in the present case was unable to give effect to the said order. As a consequence, the court determined that the assessee was entitled to a deduction under “section 80IB” for earnings of Rs.8,26,90,888 calculated as income of the housing project for the year on appeal.
The case was important in clarifying the point that the income increased as a result of the disallowance under this clause is deductible under 80IB (if the enterprise is deductible under 80IB, i.e. profits and gains from specific commercial undertakings).
Explanation 1 of section 40(a)(ii): taxes charged on income earned outside india
Any amount paid outside India that is liable for tax exemption under “Sec. 90” or income tax deduction under “Sec. 91” is regarded to never have been allowable per “Sec. 40 of the Income-tax Act”. Nevertheless, taxpayers shall continue to be qualified for a tax deduction for income tax received outside India per Sec. 90 or Sec. 91. Furthermore, with effect from 1-6-2006, an Explanation 2 has been added that enumerates any amount charged outside India that is liable for tax relief per the incorporated “Sec. 90A” is to be disallowed as a deduction in the calculation of “income and benefits from business or profession.”
Certain fee, charges etc. are disallowed for state government undertakings [section 40(a)(iib)]
Undertakings of the “state government” are independent statutory bodies separate from the state and subject to “income tax”. Mentioned below are the implications of them offering dividends to state government:
- Dividends are not deductible expenses, and
- Under section 115-O dividend distribution tax is attracted by dividend
Therefore state governments instead of receiving their income in the form of undertakings preferred to receive them in a manner of royalties, privilege fees levied by them exclusively on undertakings of the state government. Payments made via such “levies’ ‘, also known as special levies on undertakings of the state government 1) do not attract DDT (dividend distribution tax) and 2) may be regarded as deduction while calculating their business profits by state government undertakings. Consequently, Revenue disputes such investments as non-genuine, a colourable mechanism for minimising income tax and profits and evading DDT as well. As the explanatory note to the Finance Bill, 2013 reads: “Conflicts have emerged in the income-tax calculation of certain State Government undertakings as to whether any amount received through privilege fee, licencing fee, royalty, or other fee imposed or assessed by the State Government solely on its undertakings is deductible or not to calculate the income of such undertakings…”
The Finance Act of 2013 revised “Section 40” by adding a new “sub-clause (iib) in section 40” (a) effected from 1st March 2014 onwards to safeguard the tax base of “State Government undertakings” via a vis “levy of duty”, “fee”, and prevent the state government from pilfering amounts from its undertakings. As per the new sub-clause (iib), no deduction is to be permitted to compute the income of undertakings of such kind under the “Profits and gains of business or profession” heading :
- Such “royalty”, “duty fee”, “privilege fee”, “service payment”, is exclusively imposed by the “state government” on an undertaking of the “state government undertaking”; or
- the amount obtained explicitly or implicitly by the state government from an undertaking of the state government.
A “state government undertaking” can be any of the following :
- a company formed by or under any legislation/ statute enacted by the “State Government”;
- a business in which the state government owns 50% or more of the paid-up share capital;
- a business in which the entity referenced to in (i) or (ii) is the proprietor of more than “50%” of the “paid-up equity share capital” (individually or collectively);
- an organisation or entity for which the State Government has the power, explicitly or implicitly, to appoint a majority of the directors or to influence decisions relating to management or policy, whether by having a say in the voting process, shareholding etc.
- a council, an agency, or some authority created by or under some state legislation, or the control of the State Government; ‘
Only if the following provisions are met would the disallowance be attracted :
- The amount is a fee or penalty rather than a tax or duty.
- Only State government undertakings are subject to the fee or tax. Disallowance is not attracted if the tax is “non-exclusive”. A “non-exclusive” tax does not apply to State Government undertakings.
- The state government is in charge of the levy. There will be no disallowance whether the tax is imposed by the Central Government or some other agency.
If the aforementioned requirements are fulfilled, the name granted to such exclusive levy or charge – be it royalty, licencing fee, duty etc. – is immaterial. DDT will continue to lack jurisdiction over such colourable allocation of revenues from State Government undertakings to the State Government. Taxable profits, on the other hand, are not eligible for a deduction to be claimed from. Since there is no corresponding amendment to “Section 115JB”, these “exclusive levies” in the form of royalties and other fees will continue being expenses for purposes of MAT (minimum alternate tax), and no contribution to book profits will be made. As a consequence, these levies will be ineffective for regular income tax purposes even though it is effective for purposes of MAT.
- “Income or gains tax [Sec. 40 (a) (ii)]”: Any amount charged on account of any tax on “Profit or Gains of any company or business”, or calculated as a percentage of or otherwise based on, any such gains or profits, shall not be deemed deductible ;
Non-deductible taxes :
- “Income tax”
- “Income tax on agriculture”
- Interest charged on income tax returns
- “Income tax” in foreign countries
- Section 40(a)(iii) – Any amount if paid outside India or to P NRI, chargeable under the head “Salaries” on which tax has not been deducted or charged from, under “Chapter XVII-B”.
- “Contributions to provident funds or other funds” “[Sec. 40(a) (iv)]”: Payments to a “provident fund” or any similar fund created for the profit of the assessee’s workers are not deductible until the assessee has taken the necessary measures to ensure that tax is deferred at source on every reimbursement collected from funds subject to the “Salaries” head. In terms of having an appropriate agreement for deduction of tax at source, the Act enumerates a clear clause in the “trust deed” itself for such tax deduction will be adequate conformity.
- “Tax charged by an employer on non-monetary perquisites given to workers [Sec. 40(a)(v)]”: When calculating the employer’s business income any tax paid directly by the employer on perquisites not provided in the form of monetary payment is not deductible
SECTION 40 A: IN CERTAIN CASES, EXPENSES OR FEES ARE NOT DEDUCTIBLE
Section 40 and the provisions it entails have an overriding effect over any other provisions of “the Income Tax Act” reading “notwithstanding anything to the contrary contained in any other provisions of the Act”. Therefore, any allowance or expenditure allowed under the business or profession category in any other provisions, will not be deductible if section 40A applies.
Payments made to relatives and associates [Section 40 A (2)]
When any expenditure is accrued by the assessee for which payment is made to a specific individual (relatives and neighbours of the assessee) and in light of the fair market value of goods the AO deems such expenditure unnecessary or unreasonable for which the payment is made or the rightful needs of the profession of the assessee or the benefits accruing to him from such business, as much of the expenditure as is considered unreasonable or extravagant, shall be disallowed as a deduction.
If payment is made by some mode other than an account-payee draft or cheque, 100 per cent of the expenditure will be disallowed [Section 40 A (3)(a) ].
No deduction shall be applied if the assessee incurs some expense by payment or a variation of payments, rendered to an individual in a day, in any manner other than through an account payee cheque, over “Rs. 20,000” (“Rs. 35,000” if the payment has been rendered for “plying”, “contracting”, or leasing goods). Where the bill for plying, contracting, or leasing commodities crosses “Rs. 35,000”, the payment should be rendered by account payee cheque or draft. “Credit card”, “debit card”,”net banking”, “IMPS (Immediate Payment Service)”, “UPI (Unified Payment Interface)”, “RTGS (Real Time Gross Settlement)”, “NEFT (National Electronic Funds Transfer)”, and “BHIM (Bharat Interface for Money)” “Aadhar Pay” are the authorised electronic modes [CBDT Notice No. 8/2020 dating 29.01.2020]. The rule extends to all types of spending involving charges for products or services that are deductible when calculating taxable profits.
The provision only extends where the payment is rendered to a particular individual on a particular day. The income tax department recently on 29th January 2020 announced that the cap on all cash spending on a single day has been lowered to Rs 10,000. The rules allow for such transfers to be rendered by an “account payee bank draft”, an “electronic clearing mechanism” via some electronic mode or a bank account as specified by rule 6ABBA.
An expenditure amounting to Rs. 40,000 incurred by A company, is made on a particular day to B Company in 4 cash payments. One payment is made in the afternoon at 12:30, one in the evening at 3:00, one at 7:00 and one at 11:45. In such a scenario the expenditure of 40,000 would be disallowed in its entirety since the aggregate of cash payments exceeds Rs. 10,000 that is made during a day.
Debt repayments or payments made against the purchase price of capital assets such as plant and pieces of equipment not for resale are not covered by the provisions of the act.[“Section 40A (4)”] “In suits where payment is made/tendered by a/c payee cheque or draft as specified by section 40A, the payee has immunity” ]
Where any payment is required to be made under section 40A(3) by an “account payee cheque” drawn on a bank or by an “account payee-draft”, the payment can be tendered by such draft or cheque, notwithstanding anything specified in any other statute currently in force or in any agreement; and where the payment is made, no individual shall be able to initiate a suit or challenge the payment arguing that the payment was not rendered or tendered in cash or any other manner.
Disallowance for gratuity [Section 40A (7)]
Liability which usually arises as per the employment term of an employee working under the assessee is termed “gratuity liability”. The liability generally accumulates from one year to the next. Due to the logistical issues, however, in calculating the deduction allowed on an accrual basis, Sec. 40A (7) provides that a deduction for gratuity shall be permitted only where the conditions mentioned below are satisfied:
- The quantity of gratuity was payable to the workers during the previous year (assuming no deduction was attracted under “clause (b)”; or
- When for the payment of a sum as a donation to an accepted gratuity fund, a provision has been enacted.
Under “Section 36(1)(v)”, a deduction is permissible for calculating the “profits and gains of a company or business” concerning any amount paid by a taxpayer (in the capacity of an employer) in the form of donations provided by him to an authorised “gratuity fund” generated under an irrevocable trust for the exclusive benefit of his workers. Furthermore, section 37(1) states that any expense other than those defined in Sections 30 to 36 that is spent entirely for the company’s benefit or practice must be permitted as a deduction in calculating taxable profits from the business. An examination of the two provisions listed above reveals that the legislature intended for the manager to be able to deduct gratuity either in the year in which the gratuity is paid or in the year in which the employer makes contributions to an authorised gratuity fund. This section specifies that any amount claimed by the assessee against the provision for gratuity must be paid by the assessee.
Contributions to non-statutory accounts are disallowed [Section 40A (9)]
Only the amount paid by the assessee in the capacity of an employer to an authorised “gratuity fund”, “registered provident fund”, or “official superannuation fund” (as specified by law) is allowed as a deduction per provisions of various sections. No deduction shall be permitted for any amount charged toward the creation or development of a bank, trust, or other agency for any other purpose not recognised or accepted.
This sub-section was enacted to combat the increasing trend among employers of claiming deductions from taxable income of the company for donations rendered ostensibly for the welfare of workers, but from which to the employees no genuine profit was transferred. As a result, no deduction would be permitted if the assessee pays some amount in his capacity as an employer for the establishment or foundation of, or donation to, any bank, trust, corporation, organisation of persons, collection of individuals, a society registered under the “Societies Registration Act, 1860”, or other organisation for any reason. The exclusion would not be withheld, however, if such amount is charged in support of funds covered under “sections 36(1)(iv)”, “36(1)(iva)”, and “36(1)(v)” or some other rule.
The specified time for making payment
The due amount must be paid on or before the last date for filing “the return of income” under “section 139 (1)” concerning the previous year in which the obligation to pay arose. If an accrued debt is paid beyond the due date, a deduction can be claimed in the year of payment.
The amounts mentioned below shall not be deducted in calculating the income of the business in the case of an LLP (Limited Liability Partnership) or any assessable firm as such.
- “Section 40 (b) (1) remuneration to non-working partners” – An incentive, fee, or other kinds of remuneration paid to any partner other than a working partner. ( the word “remuneration” refers to payments in the form of wage, incentive, or “commission”.)
- “Remuneration to a working partner not authorized by deed” – Remuneration or interest paid to a working partner that is either unauthorized or is conflicting with the terms of the deed of partnership ;
- “Remuneration to a working partner or interest in a partner approved by deed but relating to a previous date” – The new partnership deed may allow remuneration to any working party or interest to any partner for a term before the current partnership deed’s date. Authorisation of the current deed of partnership deed might have been warranted because the payment was unauthorised or in conflict with the previous “deed of partnership”. This form of remuneration or interest would also be banned. It’s worth noting, though, that the new partnership deed cannot authorise any payments for some time before the previous partnership deed’s expiration date. Thereafter, under a further limitation, enshrined under “section 40(b)(iii)” , all remuneration paid to the operating partners will be deducted from the company only as of the date of the partnership agreement, not before.
- “Interest to any party above 12% p.a.”– Any interest payment approved by the deed of partnership that falls after the date of such deed to the extent that the rate of interest exceeds “12% basic interest p.a”.
- “Payments to a working partner over the limits set” – Remuneration paid to a working partner, that is ratified by a deed of partnership, occurring after the date of the deed that exceeds the limits as mentioned below :
- “Rs. 1,50,000 or 90 %” of the “book profit”, whichever is higher on the first “Rs. 3 lakhs” of “book profit or loss”.
- On the balance of book profit 60% of the book profits.
Remuneration of Rs. 6,00,000 has been paid to the partners of a firm for the P.Y 2018-2019, as per the deed of partnership the firm has a book profit of Rs. 12 lakhs. What remuneration can be allowable as a deduction?
|On first Rs. 3 lakh of book profit [Rs 3,00,000 * 90%]On balance of Rs. 3 lakh of book profit [Rs. 3,00,000 *60%]||2,70,0001,80,000|
The excess amount of Rs. 1,50,000 (Rs. 6,00,000 – Rs. 4,50,000) as per Sec. 40(b)(v) would be disallowed.
Deduction on basis of actual payment [section 43b]
- Superseding other provisions of the “IT Act”
- The special expenses allowed under other sections
- Only in the past year when the expenditure is paid shall be allowed
- According to the respective accounting method regardless of the past year in which liability was accrued.
- “Duty” or “tax” Tax under any legislation.
- Contribution of employees to “Provident fund”, “superannuation fund”, “Gratuity fund” or “welfare fund”.
- “Commission” or “bonus” paid to an employee.
- Interest on loan borrowed from “Public Financial Institution”, “State Financial Corporation” or “State industrial investment corporation”.
- Interest on any loan or advance from “schedule bank” or a “co-operative bank” that is not a “primary agricultural credit society” or “primary co-operative agricultural and rural development bank”.
- Leave salary paid to a worker.
- For using railway asset the amount payable to the Indian Railways.
- Any amount payable on any borrowing loan /by the assessee as interest from a deposit-taking non-banking financial services provider or a systemically relevant non-deposit-taking non-banking financial company, according to the terms and conditions of the borrowing/loan arrangement.
When a deduction for any sum referred to in point 8 is permitted in calculating the income specified in “Section 28”, of the preceding year (the previous year should be relevant to the assessment year starting on the 1st day of April 2019, or any earlier assessment year) in which the assessee incurred the liability to pay such sum, the assessee is not entitled to any deduction under the above-mentioned section in calculating the income of the past year in which he paid the amount.
Deduction of any sum due for interest under point 8, is allowable if such interest has been paid in full, although any interest referenced to under that section that has been turned into a loan or saving shall not be considered to have been fully paid.
The Finance Act, 2019 specially incorporated
- The provisions of “Section 43” shall be inapplicable.
- For the Previous Year when the debt was incurred.
- If the Assessee in effect pays such sum.
- “u/s. 139(1)” before or on the due date of return.
- In addition, evidence of any such payment is provided together with ROI.
Mr Kabir’s account is maintained on an accrual basis by him. For business purposes, a loan has been taken by him from a scheduled bank. In P/Y 18-19 total interest liability is Rs. 20,000.
The payments mentioned below have been made Mr. Kabir on which deduction will be as follows:
|Payment Date||Amount(Rs.)||Deduction / P/Y of deduction|
|11/May/18||6,000||6,000 for PY 18-19|
|11/Nov/18||5,000||5,000 for PY 18-19|
|11/April/18||2,000||2,000 for PY 18-19|
|11/July/18||3,000||3,000 for PY 18-19|
|25/Aug/19||4,000||4,000 for PY 19-20|
Conclusively it can be stated, apart from TDS default, other defaults too can occur, such as non-deduction of securities transaction taxes, fringe benefits tax, asset tax for previous years and income tax, provident fund contribution without tax deduction. In such situations where the default occurs, as mentioned above, the assessee’s expense is disallowed. In brief, all payments made on which an amount is supposed to be deducted and credited to the government whence the same has not been paid or deducted already, are disallowed under the Act. In other terms, spending that is not entirely and solely for commercial reasons is not allowable. However, the allowance for expenditure can be claimed at a later stage after the amount is deposited or deducted.
Points to remember: a brief description of section 40 and 40a, 43b
Certain amounts mentioned below are not to be disallowed while calculating income under “Profit and Gains from a business or profession”:
- Interest, dividends, payments for technical facilities, and other amounts payable to a non-resident without the deduction of TDS and receipt of the same;
- Tax on income;
- Tax on wealth;
- Any expenditure irrespective of whether it is made outside India or to a non-resident and the tax has not been deducted or charged in India, that is taxable under the head of “Salaries” ;
- Any tax that is paid by the employer on behalf of the employee on non-monetary compensation.
- 40 A (2): Any payment rendered to a person related to the assessee is disallowed to the degree that the Assessing Officer determines it is excessive or unnecessary. Related persons include both individuals with substantial interest and relatives.
- 40 A (3): Payment that is made on an item of expenditure above Rs. 20,000 and not via account-payee cheque or draft, shall be disallowed in its entirety.
- Any amount paid by the assessee for instituting or contributing to any trust, “AOP”, “BOI” or other institutions, no deduction shall be allowed. Unless such contribution is made towards a “provident fund” that is approved or recognised as “gratuity fund”.
- “Section 43B”- if the below-mentioned amounts are not paid before the last date for filing for an “income tax return” :
- Money owed as a levy, obligation, cess for example “bonus” or a “commission” to employees.
- Interest on every “public finance institution’s” loan or borrowings, etc.
- Advances and loans on interest from a “scheduled bank”.
- Leave encashment.
- Benefaction to a mutual scheme, a superannuation or gratuity fund.
- The tax to be deducted U/s 194J on Rs. 2,00,000 is 10 %. However, no deduction was paid. Calculate the amount of disallowance to be charged?
- U/s 194J the tax to be deducted and charged is 10 % on Rs. 2,00,000. Rs. 2000 was deducted and paid. Calculate the amount of disallowance that will be charged?
- U/s 194J tax to be deducted is 10% on Rs. 1,00,000 i.e. Rs. 10,000. Tax deducted and paid was Rs. 8,000. Calculate the amount of disallowance in the above-stated scenario?
- What will be the remuneration allowable as a deduction, if a firm has paid Rs. 6,00,000 as remuneration to its partners for the F.Y 2017-2018, as per the deed of partnership. The firm has a book profit of Rs. 8,00.000.
- Sinha and Co. a firm in nature of a partnership, has two partners. Before the deduction of the items mentioned below the firm reports a net profit of Rs. 6,00,000 :-
- As per the deed of partnership a salary of 40,000 payable to each of the two working partners.
- Depreciation of machinery and plants amounted to Rs. 1,00,000.
- As per the deed of the partnership interest of 20%/annum. The eligible amount of capital for interest is Rs. 2,00,000.
- The book profit amount “U/s 40(b)” of the “IT Act, 1961”.
- For the A.Y 2018-2019 the amount of working partner salary that is allowable.
- On Rs. 2,00,000 no tax has been deducted and paid.
Therefore the total amount of disallowance will be (30% of Rs, 2,00,000) Rs. 60,000. The deduction will be allowed next year if it is paid by the due date.
- Tax paid and deducted is Rs. 2000. Implying on Rs. 20,000 tax has been paid and deducted but not on the remaining Rs. 1,80,000
Therefore the disallowance amount will be ( 30% of 1,80,000) Rs. 54,000. If the disallowance amount is paid after the last date, the deduction shall be allowed in the next year.
- The tax paid and deducted is Rs. 8,000 implying on Rs. 80,000 tax is deducted but on Rs. 20,000 tax is not.
Therefore the amount of disallowance to be paid is (30% of Rs. 20,000) i.e. Rs. 6000. If the same is paid after the last date, Rs. 3000 will be eligible for deduction in the next year.
Conclusively the three questions and their solutions justify the point, in the event of non-deduction or short-deduction, the amount disallowed under “40(a)(ia)” would be 30 per cent of the amount for which TDS was not deducted or was short-deducted (Proportional basis).
- As enumerated under “Section 40(b)(v)” the allowable remuneration will be as follows :
|(Rs. 3,00,000*90 %) on the first Rs. 3 laskh of book profit (Rs. 5,00,000* 60%) on the remaining balance of Rs. 5,00,000||2,70,000|
The surplus amount of Rs. (6,00,000 – 5,70,000) 30,000 as per “Section 40(b)(v)” will be disallowed.
- I) The cumulative profit in the present case, is given before the deduction of depreciation on P and M, the salary of the partners and interest on the capital of partners. The book profit, therefore, shall be as follows :
|Total profit (before deducting salary, depreciation and interest on capital)less: Depreciation under “Section 32)(the maximum allowable interest per capital) under “Section 40(b)” is 12% p.a (Rs. 6,00,000*12%)Book Profit|
ii) Therefore, the salary paid to the partners are = Rs. 40,000*2*12 = Rs. 9,60,000.
The minimum allowable working partner’s salary for the F.Y 2018-2019 as per “Section 40(a)(ia)” and the limits specified therein shall be –
|(Rs. 1,50,000 or 90% of Rs. 3,00,000, whichever is higher) on the firstRrs. 3,00,000 of book profit [60% on the book profit balance(Rs. 4,28,000 – Rs. 3,00,000)||2,70,000|
Therefore, for the F.Y 2018-2019 as per “Section 40, (b)(v)” the allowable working partners remuneration is Rs. 3,84,000.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join: