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| The Tax Publishers2020 TaxPub(DT) 5216 (All-Trib) INCOME TAX ACT, 1961
Section 40(a)(ia), Second proviso
Second proviso to section 40(a)(ia) was curative in nature and, therefore, would have retrospective effect, though same was inserted by Finance Act, 2012. Accordingly, second proviso was applicable during the concerned year and receipients of concerned payments having paid tax thereon, no disallowance could be made under section 40(a)(ia).
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Business disallowance under section 40(a)(ia) - Non-deduction of tax at source - Assessee took plea of second proviso to section 4)(a)(ia) - AO denied retrospective applicability of second proviso
AO disallowed interest paid to NBFC under section 40(a)(ia) for want of TDS. Assessee pleaded that respective payees having included concerned receipts in their return of income, no disallowance could be made as per second proviso to section 40(a)(ia). AO rejected this on the ground that second proviso was not applicable duing the year under consideration. Held: Second proviso to section 40(a)(ia) was curative in nature and, therefore, would have retrospective effect though same was inserted by Finance Act, 2012. Accordingly, second proviso was applicable during the concerned year and receipients of concerned payments having paid tax thereon, no disallowance could be made under section 40(a)(ia).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, ALLAHABAD BENCH
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