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2015 (2) TMI 890 - AT - Income TaxDisallowance u/s 40(a)(ia) - due date for the subject assessment year was 15/11/2007 and the latest TDS was remitted on 24/10/2007 - whether the case of the assessee was covered by the amended provisions of section 40(a)(ia), which have a retrospective effect? - Held that - As held in the case of CIT vs. Rajinder Kumar 2013 (7) TMI 454 - DELHI HIGH COURT the impugned amendment to section 40(a)(ia) permits remittance of TDS to the Central Government account on or before the due date of filing return of income u/s. 139(1) of the Act is retrospective in nature. Same view has been taken by the jurisdictional High Court in the case of CIT vs. PEC Electricals Pvt. Ltd., 2015 (2) TMI 889 - ANDHRA PRADESH HIGH COURT . The assessee in present case paid the TDS to the Central Government account before filing the return of income and the same is to be allowed as held by the above judgements. No infirmity in the action of the CIT(A) in directing the Assessing Officer to delete the addition made u/s 40(a)(ia) - Decided in favour of assessee.
Issues involved:
Disallowance made under section 40(a)(ia) of the IT Act for assessment year 2007-08. Analysis: Issue 1: Disallowance under section 40(a)(ia) of the IT Act The appeal filed by the Revenue was against the order of the CIT(A)-V, Hyderabad regarding the disallowance of &8377; 65,89,810 under section 40(a)(ia) of the IT Act. The Assessing Officer had disallowed this amount due to a delay in making payment of tax deducted at source. However, the assessee contended that TDS was deducted at applicable rates and remitted to the exchequer before the due date of furnishing the return of income for the assessment year. The assessee argued that the case fell under the amended provisions of section 40(a)(ia) with retrospective effect. The CIT(A) referred to relevant decisions and held that since the TDS was remitted before the due date of filing the return of income, no disallowance could be made under section 40(a)(ia) of the Act. The CIT(A) directed the Assessing Officer to delete the addition made under section 40(a)(ia). Issue 2: Judicial precedents and retrospective effect The ITAT Hyderabad, after hearing both parties and considering the orders of the authorities below, referred to judgments by the Delhi High Court and the jurisdictional High Court regarding the retrospective nature of the amendment to section 40(a)(ia). The High Courts held that remittance of TDS to the Central Government account before the due date of filing the return of income under section 139(1) should be allowed. In line with these judgments, the ITAT upheld the decision of the CIT(A) to delete the addition made under section 40(a)(ia) in the present case. The ITAT dismissed the appeal of the Revenue, affirming the CIT(A)'s order. In conclusion, the ITAT upheld the CIT(A)'s decision to delete the disallowance made under section 40(a)(ia) of the IT Act for the assessment year 2007-08. The appeal of the Revenue was dismissed, and the order was pronounced in the open court on 28 August 2013.
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