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| The Tax Publishers2019 TaxPub(DT) 1010 (Del-HC) : (2019) 261 TAXMAN 0262 INCOME TAX ACT, 1961
Section 40(a)(ia)
Second proviso to section 40(a)(ia) being declaratory and curative in nature had retrospective effect from 1-4-2005, therefore, was applicable during the assessment under consideration also i.e. assessment year 2011-12.
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Business disallowance under section 40(a)(ia) - Failure to deposit TDS within due date under section 139(1) - Applicability of second proviso to section 40(a)(ia) - Whether retrospective in nature
AO made disallowance under section 40(a)(ia) on account of assessee's failure to deposit TDS within due date under section 139(1). Assessee's case was that recipients had duly declared impugned payments in their return of income and accordingly, no disallowance could be made in view of second proviso to section 40(a)(ia). AO rejected this on the ground that second proviso to section 40(a)(ia) been made applicable with effect from 1-4-2013 and is not retrospective and, therefore, not applicable for the year under consideration. Held: Insertion of second proviso to section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1-4-2005, being the date from which sub-clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004. In view of this, disallowance was deleted.
Relied:CIT-1 v. Ansal Land Mark Township (P) Ltd. ITA Nos.160-161/2015, dated 26-8-2015, 2015 TaxPub(DT) 3482 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
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