The Tax Publishers2020 TaxPub(DT) 0575 (Bang-Trib)

INCOME TAX ACT, 1961

Section 40(a)(ia)

It could not be held that the word 'payable' occurring in section 40(a)(ia) refers to only those cases where amount is yet to be paid and does not cover the cases where amount is actually paid. If provision is interpreted in the manner suggested by the assessee, even when it is found that a person like assessee has violated provisions of Chapter XVII-B, he would still go scot free without suffering consequences of such monetary default in spite of specific provisions laying down these consequences. Accordingly, section 40(a)(ia) covers not only those case where amount is payable but also when it is paid.

Business disallownace under section 40(a)(ia) - Non-deduction of tax at source - Amount paid v. payable -

AO made disallowance under section 40(a)(ia) of payments already made or credited during the year, without deduction of tax at source. Assessee contended that section 40(a)(i)/40(a)(i)/40(a)(ia) was applicable only on amounts payable at the end of relevant year.Held: It could not be held that the word 'payable' occurring in section 40(a)(ia) refers to only those cases where amount is yet to be paid and does not cover the cases where amount is actually paid. If provision is interpreted in the manner suggested by the assessee, even when it is found that a person like assessee has violated provisions of Chapter XVII-B, he would still go scot free without suffering consequences of such monetary default in spite of specific provisions laying down these consequences. Accordingly, section 40(a)(ia) covers not only those case where amount is payable but also when it is paid.

Applied:Palam Gas Services v. CIT 92017) 394 ITR 300 (SC) : 2017 TaxPub(DT) 914 (SC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2007-08

INCOME TAX ACT, 1961

Section 10A

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