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TMI Blog2016 (1) TMI 1448X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s. 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act. Therefore, the disallowance made by the assessing officer cannot be sustained. Addition on account of disallowance of payments made to CHAs u/s. 40(a)(ia) of the IT Act, 1961 stands deleted. - A short deduction of tax at source, even if any, cannot be visited with the disallowance under section 40(a)(ia) - Decided in favour of assessee. - Pramod Kumar AM and Kul Bharat JM V.K. Chakravarty for the appellant M.J. Ranpura for the respondent ORDER Pramod Kumar AM: 1. By way of this appeal, the Assessing Officer has challenged corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carried the matter in appeal before the ld. CIT(A). It was, inter alia, contended by the assessee that the disallowance under section 40(a)(ia) cannot be resorted to in the case of short deduction of tax at source, even if any and, therefore, the impugned disallowance is unsustainable in law. Reliance was placed on Hon ble High Court of Calcutta in the case of CIT vs. S.K. Tekriwal, 260 CTR 73. Accepting these arguments, learned CIT(A) deleted the impugned disallowance and justified his stand as follows :- 7. While holding that the payments made to CHAs are liable for tax deduction at source u/s. 194J of the IT Act, 1961, the issue at hand is whether the assessing officer is justified to disallow the entire payment made to CHAs at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payment falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s. 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act. 8. Apart from the above citation, the authorised representative has cited the following judgements to buttress his arguments that the disallowance u/s. 40(a)(ia) is not warranted when the tax deduction at sources was incorrectly me under a different section which resulted in the shortfall. Hon ble ITAT Delhi E Bench in the case of Glaxo Smithkline Consumer Healthcare Ltd. vs. ITO 12 SOT 221 (Delhi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case in the light of the applicable legal position. We are not inclined to disturb the very well reasoned conclusions arrived at by the ld. CIT(A) as he has explained at length a binding judicial precedent for the proposition that a short deduction of tax at source, even if any, cannot be visited with the disallowance under section 40(a)(ia) of the Act. Therefore, the disallowance was unsustainable in law and the ld. CIT(A) was quite justified in deleting the impugned disallowance. We approve and uphold the erudite and well reasoned stand taken by the ld. CIT(A) and decline to interfere in the matter. 5. In the result, the appeal is dismissed. Order pronounced in the open Court on the 19th day of January, 2016. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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