2015 (6) TMI 854 - AT - Income Tax

Disallowance 40(a)(ia) - non-deduction of TDS - whether the appellant assessee could make a claim for deduction other than by filing a revised return? - Held that - From the decision of Hon ble Supreme Court in the case of Goetez (India) Ltd., 2006 (3) TMI 75 - SUPREME Court it is clear that the deduction can be made before AO by way of revised return and not otherwise but this does not apply to the powers of Income Tax Appellate Tribunal u/s. 254 of the Act as is clarified by Hon ble Apex Court in this very judgment. Hence, on the facts of the present case before us the assessee s claim is legally sustainable on facts of the case and now we direct the AO to allow the same but after verification of dates of payments of TDS. - Decided in favour of assessee.

Summary

Issues:
Disallowance under section 40(a)(ia) of the Income-tax Act for non-deduction of TDS.

Detailed Analysis:

Issue 1: Disallowance under section 40(a)(ia) of the Income-tax Act for non-deduction of TDS

1. The appeal arose from the order of CIT(A) confirming the AO's disallowance of a sum under section 40(a)(ia) for non-deduction of TDS.

2. The assessee offered an amount in the revised return but did not deduct TDS, leading to the disallowance. The AO rejected the representation regarding TDS deduction made before the completion of assessment.

3. The CIT(A) upheld the AO's decision citing the Supreme Court's ruling in Goetze (India) Limited case, emphasizing the need for claims to be made in the original return or revised return.

4. The assessee contended that the TDS was deducted in March 2006 but deposited on 24.04.2006 before the due date of filing the return.

5. The High Court's decision in CIT Vs. Virgin Creations supported the retrospective application of amendments in section 40(a)(ia) for TDS paid before the due date of filing the return.

6. Referring to the Goetze (India) Ltd. case, the Supreme Court clarified that deductions should be made through revised returns before the AO, not otherwise. However, the power of the Income Tax Appellate Tribunal under section 254 allows for consideration of legal issues based on facts presented.

7. Consequently, the Tribunal directed the AO to allow the deduction claimed by the assessee after verifying the TDS payment dates.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and the decisions made by the authorities involved.