Case Law Details
Brief of the case:
ITAT Kolkatta has held In the case of Menally Sayaji Engineering Ltd. VS -CIT that if assessee failed to deduct TDS during the previous year on payments of management service fee and royalty debited to the profit and loss account and if in his Assessment Order Passed U/s. 143(3) AO fails to make disallowance for such expenses than such order passed by AO is erroneous and prejudicial to the interest of the revenue and revision proceedings under section 263 initiated by CIT under section 263 is valid. ITAT Further held that to take benefit of amended Section 40(a)(ia) tax has to be deducted only in the previous year, So if TDS is not deducted in Previous Year than even if TDS been deposited before Due date of Return Filing expenses will not be allowed.
Facts of the case:
The case was selected for the scrutiny and the assessment order u/s 143(3) was passed by AO allowing the amount of management fees and royalty payment.
Thereafter the assessee was issued notice u/s 263 of the act by the ld. CIT stating that the non-deduction of TDS u/s 40(a) was prejudicial and erroneous to the interests of revenue.
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