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TMI Blog2018 (9) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the amendment vide Finance Act 2017 w.e.f. 1/04/2018 whereby sub-Section (1A) of Section 58 has been amended for the purpose of making a provision for disallowance U/s 40(a)(ia) of the Act. Therefore, in view of the above facts and circumstances of the case, when the amendment is applicable from 01/4/2018, no disallowance can be made U/s 40(a)(ia) of the Act against the income of the assessee assessed under the head “Income from other sources”, hence, we direct to delete the disallowance made U/s 40(a)(ia) of the Act. - Decided in favour of assessee - ITA No. 473/JP/2018 - - - Dated:- 13-9-2018 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Sanjiv Jain (CA) For the Revenue : Shri Jai Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total construction expenses of ₹ 9,33,802/- on which no TDS was deducted. Accordingly, the Assessing Officer invoked the provisions of Section 40(a)(ia) of the Act and disallowed the said amount of ₹ 2.50 lacs. 4. The assessee challenged the action of the Assessing Officer before the ld. CIT(A) and contended that the assessee society being a religious institution does not carry out any trade of manufacturing activity. The income of the assessee was assessed under the head income from other sources and therefore, no disallowance U/s 40(a)(ia) of the Act is called for. The ld. CIT(A) did not accept the contention of the assessee and confirmed the disallowance made by the Assessing Officer. 5. Before us, the ld AR of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Tribunal dated 24/05/2018 in the case of Pediatric Infectious Diseases Academy Vs ITO in ITA No. 2355/Kol/2017. 6. On the other hand, the ld DR has submitted that once the registration U/s 12A of the Act has been rejected by the competent authority then the assessee cannot claim that these activities are religious and charitable in nature. The income of the assessee society has to be computed on commercial principles and therefore, the provisions of Section 40(a)(ia) of the Act are applicable so far as the assessee has failed to deduct TDS in respect of the payment made to the contractor. He has relied upon the orders of the authorities below. 7. We have considered the rival submissions as well as the relevant material on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral public advancement. It is duly registered under the West Bengal Society Registration Act, 1961 as well as under section 12A of the Income Tax Act, 1961. During the year under consideration, it had published journal from the funds received from sponsorship fees and the journals so published were issued to the members free of cost. The surplus from the activity of publishing journal was offered to tax by the assessee under the head 'income from other sources and when the disallowance was sought to be made by the A.O. u/s 40(a)(ia) for non-deduction of tax at source from the payment of printing charges, it was claimed by the assessee that the said provision could be invoked only why computing income under the head 'profits and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and the assessee was not carried on the business, section 40(a)(ia) had no application. Moreover, the insertion of Explanation 3 to Section 11 by the Finance Act, 2018 making inter alia the provisions of Section 40(a) (ia) applicable in case of charitable or religious trust or institution with effect from 1st April, 2019 further shows that section 40(a)(ia) hitherto was not applicable in computing income of entities registration u/s 12A of the Act. I, therefore, hold that the disallowance made by the A.O. under section 40(a)(ia) and confirmed by the Ld. CIT(A) is not sustainable and deleting the same, I allow this appeal of the assessee. When the income of the assessee has been assessed under the head Income from other sources and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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