Late deposit of TDS cannot be the reason of disallowance uas per sec 40a(ia)

Last updated: 05 June 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Facts, in brief, as per relevant orders are that return declaring income of ``12,75,862/- on a/c of short term capital gains and nil business income filed on 30.09.2008 by the assessee, after being processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act), was taken up for scrutiny with the service of a notice u/s 143(2) of the Act issued on 15.09.2009. During the course of assessment proceedings, the Assessing Officer (A.O. in short) noticed that the assessee deposited TDS of `1,59,332/- deducted from an amount of ``16,22,846/- beyond the stipulated time. To a query by the AO, seeking to disallow the aforesaid amount in terms of provisions of sec. 40a(ia) of the Act, the assessee pleaded that proviso to section 40(a)(ia) of the Act inserted by Finance Act,2010 was applicable retrospectively w.e.f. 1.4.2005 and the assessee having deposited TDS before the due date of filing the return, no disallowance could be made. However, the AO did not accept the submissions of the assessee and disallowed the amount of `16,22,846/- in terms of extant provisions of section 40(a)(ia) of the Act.

Citation :
Income Tax Officer , Ward 16(1), Room no.224, C.R. Bui lding, New Delhi (Appellant) V/s. Taru Leading Edge (P) Ltd. , A-1/276,Second Floor, Safdurjung Enclave, New Delhi [PAN: AAACT 4608 C ] (Respondent)