ITAT allows appeal on TDS disallowance, citing timely payment before return filing deadline.

The ITAT allowed the appeal, holding that the disallowance of TDS under section 40(a)(ia) for late payment was unjustified as the TDS was paid before the due date for filing the return of income. The ITAT determined that the retrospective application of the amendment in section 40(a)(ia) meant that any TDS payment made before the due date for filing the return of income could not be disallowed. The appeal was allowed based on these grounds, with no further arguments presented.

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Issues Involved:
1. Disallowance of TDS under section 40(a)(ia) for late payment.
2. Interpretation of retrospective application of the amendment in section 40(a)(ia).
3. Applicability of the amendment to provisions of section 40(a)(ia) with respect to due date of filing return of income.

Issue 1: Disallowance of TDS under section 40(a)(ia) for late payment:
The Assessing Officer disallowed a deduction of Rs.2,62,394/- due to late payment of TDS on contractual and professional/technical payments. The CIT(A) upheld this disallowance, citing the retrospective effect of the amendment in section 40(a)(ia) from 01.04.2005. The appellant argued that TDS was deposited before the due date of filing the return, relying on a decision in a similar case. The ITAT considered the facts and held that the disallowance was unjustified as the TDS was paid before the due date.

Issue 2: Interpretation of retrospective application of the amendment in section 40(a)(ia):
The ITAT analyzed various decisions regarding the retrospective application of the amendment in section 40(a)(ia). While some decisions held the amendment to be prospective, the Calcutta High Court ruled that it was retrospective from 01.04.2005. Following the High Court's decision, the ITAT concluded that any payment of TDS made before the due date for filing the return of income cannot be disallowed under section 40(a)(ia). The ITAT emphasized that in the absence of contradictory decisions, they would not interfere with the CIT(A)'s findings.

Issue 3: Applicability of the amendment to provisions of section 40(a)(ia) with respect to due date of filing return of income:
The ITAT determined that the amendment to section 40(a)(ia) by the Finance Act, 2010, applied retrospectively from 01.04.2005. Consequently, any TDS payment made before the due date for filing the return of income under section 139(1) could not be disallowed. Since the appellant had deposited the TDS before the due date, the ITAT allowed the appeal on grounds 1 to 3. The general nature of ground 4 did not require separate adjudication and was dismissed. No other arguments were presented, and the appeal was ultimately allowed.

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