Deduction u/s 194C instead of u/s 194J renders shortfall liable for disallowance u/s 40(a)(ia)

Brief Facts of the Case: The assessee, a hospital, entered into an agreement with M/S Lakeshore Hospital and Research Centre Limited (herein after “M/s Lakeshore”) by which, the latter had undertaken to perform various professional services in the assessee’s hospital. During the year under consideration, the assessee paid a sum of Rs. 69,06,644/- to M/s Lakeshore. On the payments made, the assessee deducted tax at the rate of 2% under Section 194C of the Income Tax Act 1961 (herein after “Act”). However, assessment was completed on the basis that tax deductible was at 5% as prescribe...