Case Law Details
Hi-Lite Builders Pvt Ltd Vs DCIT (ITAT Cochin)
ITAT Cochin held that amendment to section 40(a)(ia) of the Income Tax Act made by the Finance Act 2020 is retrospective in nature. Accordingly, TDS deposited on or before the due date of filing return u/s 139(1) is allowable.
Facts- The case of the assessee was selected for scrutiny and assessment was completed u/s. 143(3) assessing an income of Rs.1,03,48,780. Subsequently, the CIT, Kozhikode, set aside the order of assessment u/s. 263 with a direction to make fresh assessment on the ground that the tax deducted at source by the assessee during the period from 1.10.2008 to 28.2.2009 was credited to the Govt. account during May, 2009 to July, 2009 only and the AO did not make any disallowance u/s. 40(a)(ia). The AO subsequently passed an order u/s. 143(3) read with section 263 disallowing a sum of Rs.7,49,20,296 u/s. 40(a)(ia).
Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A). CIT(A) upheld the disallowance. Accordingly, being aggrieved, the present appeal is filed.
Conclusion- The Hon’ble Supreme Court has clearly laid down the ratio that the amendment to section 40(a)(ia) with respect allowability of the expenses on which tax is deducted incurred during the year that is remitted to Government account on or before the due date for filing the return of income u/s.139(1) being curative in nature is retrospective. In assessee’s case the tax deducted during the period from 1.10.2008 to 28.2.2009 was credited to the Govt. account during May, 2009 to July, 2009 i.e. before the due date for filing the return of income u/s.139(1). Therefore respectfully following the ratio laid down by the Apex Court, we hold that no disallowance is warranted in assessee’s case for the impugned amount and the disallowance made by the AO is deleted.
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Author Bio
We are having GSTIN. We are doing business and our bankers transfer the excess amount in our current account to fixed deposit. We earn interest on this fixed deposit. TDS is also deducted. My query is whether Rule 42 of CGST is applicable. An early reply in this regard is highly solicited.
Thanks in advance.
TKW