Case Note & Summary
The case involves three appeals filed by the Revenue under Section 260-A of the Income Tax Act, 1961, against the common order of the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Bangalore, dated 30/04/2013. The appeals pertain to assessment years 2007-08 and 2008-09. The respondent-assessee, M/s Skyline Advertising Pvt. Ltd., had deducted tax at source (TDS) but paid it after the end of the previous year, though before the due date for filing the return under Section 139(1). The Assessing Officer disallowed the expenditure under Section 40(a)(ia) for non-payment of TDS within the previous year. The Commissioner of Income Tax (Appeals) confirmed the disallowance. The ITAT, however, deleted the disallowance relying on the proviso to Section 40(a)(ia) which allows deduction if TDS is deducted and paid before the due date under Section 139(1). The Revenue appealed to the High Court, contending that the proviso applies only if TDS is paid within the previous year. The High Court dismissed the appeals, holding that the proviso clearly permits deduction if TDS is paid before the due date for filing the return under Section 139(1), and no substantial question of law arises.
Headnote
A) Income Tax - Disallowance under Section 40(a)(ia) - TDS deducted and paid before due date under Section 139(1) - The issue was whether disallowance under Section 40(a)(ia) can be made when the assessee deducted tax at source but paid it after the end of the previous year but before the due date for filing the return under Section 139(1). The court held that the proviso to Section 40(a)(ia) allows deduction if TDS is deducted and paid before the due date under Section 139(1). The ITAT's order deleting the disallowance was upheld. (Paras 1-5)
Issue of Consideration
Whether the ITAT was correct in deleting the disallowance made under Section 40(a)(ia) of the Income Tax Act, 1961, when the assessee had deducted tax at source but paid it after the end of the previous year but before the due date for filing the return under Section 139(1)?
Final Decision
Appeals dismissed. No substantial question of law. ITAT order upheld.
Law Points
- Section 40(a)(ia) of Income Tax Act
- 1961
- disallowance for non-deduction of TDS
- proviso allowing deduction if TDS deducted and paid before due date under Section 139(1)
- substantial question of law
- appeal under Section 260-A
