Without treating assessee as “assessee in default” u/s 201(1), no disallowance can be made u/s 40(a)(ia) for non deduction of tax at source
ABCAUS Case Law Citation:
ABCAUS 2752 (2019) (01) ITAT
Important Case Laws Cited/relied upon by the parties
CIT vs. Ansal Land Mark Township P Ltd reported in 377 ITR 635
Pr. CIT vs. Tirupati Construction
Shri Bhanwar Lal Choudhary vs. ACIT
Vishu International Ltd v. DCIT
The assessee was aggrieved by the order of the CIT (A) in confirming the addition made by the Assessing Officer (AO) u/s 40(a)(ia) of the Income Tax Act, 1961 (the Act) for non deduction of TDS on various payments.
Before the Tribunal, the assessee made a legal argument that he had not been treated as an assessee in default u/s 201(1) of the Act for the said payments and in accordance with the second proviso to section 40(a)(ia) of the Act, no disallowance u/s 40(a)(ia) can be made.
Alternatively, the assessee also relied upon the subsequent amendment to section 40(a)(ia) of the Act wherein the disallowance can be of only 30% of the amounts paid without making TDS
The Tribunal observed that the Hon’ble High Court had held that since the payees have filed the returns and offered the sum to tax, the assessee could not be treated as an assessee in default and no disallowance could be made u/s 40(a)(ia) of the Act.
It was noted that the Hon’ble Delhi High Court had held the amendment to section 40(a)(ia) to be retrospective in nature and following the said decision, the Coordinate Bench of the Tribunal had held that without treating the assessee as an “assessee in default” u/s 201(1), provisions of section 40(a)(ia) cannot be invoked.
Accordingly, the Tribunal deleted the disallowance made u/s 40(a)(ia) of the Act.
Invitation For Empanelment Of Practising Chartered Accountants / Chartered Accountant Firms Forest Development Corporation of Maharashtra Limited (FDCM Limited), Nagpur,…
Press Registrar General of India (PGRI) invites application for empanelment of Chartered Accountants. The Press Registrar General of India manages…
CBDT notifies revised Form No. 169 for making application for registration as a valuer under section 514 and authorised income…
Curtailing time to file reply to notice u/s 148A(b) from statutorily available 30 days to 15 days seriously prejudiced assessee’s…
At the stage of registration u/s 12AB, the CIT(E) not empowered to adjudicate applicability of provisio to section 2(15) of…
Flower bed area could not be included in the definition of “built up area” to calculate eligible limit of 1000…