INCOME TAX ACT, 1961

Section 40(a)(ia)

Business disallowance under section 40(a)(ia) - Non-deduction of tax at source - Assessee pleading receipients to have declared related payment in their returns - Non-furnishing of CA certificate because of on-going Covid pandemic

Assessee claimed deduction of remuneration paid to artists. AO made disallowance under section 40(a)(ia) on acount of non-deduction of tax at source. Assessee pleaded that as receipients had declared related payments in their returns of income, therefore, no disallowance could be made in view of second proviso to section 40(a)(ia). AO rejected this on the ground that assessee merely submitted confirmation letter from deductees without having produced CA certificate in which it was certified by CA that deductees has filed return of income, after including the amount received from assessee and paid taxes. Assessee contended that assessee was not properly guided by earlier counsel and after assessee approached the present counsel, proper advise was given by present counsel but because of on going Covid pandemic required documents, CA certificates, etc., could not be brought on record. Held: Considering the facts of assessee's case and on-going situation of Covid pandemic in the country, it was proper to provide one more opportunity to the assessee to make out his case by producing the required evidence along with required CA certificate. Accordingly, matter was remanded to AO.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2005-06 & 2006-07

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