Used 'He' in place of “Client”, 'you' in place of “CA Practitioner”
You need not disallow the same amount twice in the Computation of Income. In the year of payment, the amount stood in the Balance Sheet since he forgot to transfer it to the appropriate expense account. TDS should've been deducted, but wasn't. He'd be charging it to the P & L a/c this year. It can't be allowed since it is a prior-period item. Since you have declared it to be a prior-period expense and aren't going to claim it, where is the question of disallowance u/s 40a(ia) for non-deduction of TDS? The idea behind Section 40a(ia) is to create a disincentive for the assessees who shy away from their TDS responsibilities. But for ad is incentive to take effect, there has to be an incentive first. Since you are foregoing claiming the amount on account of it being a prior-period expense, you never had an incentive to begin with! It does not seem you can claim this expense by revising the return either, because he hadn't deducted TDS on it last year. If he deducts it now, that won't alter the nature of the expense being prior-period.