Tribunal allows appeal, cross objection; upholds deduction of expenses. Compliance with legal provisions emphasized.

The Tribunal condoned the delay in filing the appeal and cross objection, admitting them for hearing. Regarding the allowance of deduction of expenses under sec.40(a)(ia) of the Income-tax Act, the Tribunal upheld the Commissioner's decision to delete the disallowance made by the Assessing Officer. Despite conflicting decisions, the Tribunal followed the Hon'ble Calcutta High Court's judgment, dismissing both the appeal by the Revenue and the cross objection by the assessee. The case emphasized compliance with legal provisions and adherence to higher court precedents in tax matters.

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Issues:
1. Delay in filing appeal and cross objection.
2. Allowance of deduction of expenses under sec.40(a)(ia) of the Income-tax Act, 1961.

Issue 1: Delay in filing appeal and cross objection:
The appeal filed by the Revenue and the cross objection filed by the assessee were directed against the order of the Commissioner of Income-tax (Appeals)-XII at Chennai dated 8.11.2011, related to the assessment completed under sec.143(3) of the Income-tax Act, 1961 for the relevant assessment year 2008-09. There was a delay of three days in filing the appeal by the Revenue and a delay of two days in filing the cross objection by the assessee. The Tribunal found that the delay was to be condoned after reviewing the petitions filed by both sides. Consequently, the delay in filing the appeal and the cross objection was condoned, and they were admitted for hearing.

Issue 2: Allowance of deduction of expenses under sec.40(a)(ia) of the Income-tax Act, 1961:
The ground raised by the Revenue in the appeal was regarding the Commissioner of Income-tax (Appeals) allowing the deduction of expenses despite the assessee's non-compliance with the provisions of sec.40(a)(ia) of the Income-tax Act, 1961. The Revenue contended that the TDS collected in earlier months had not been paid within the stipulated time, which, according to them, necessitated disallowance under sec.40(a)(ia). However, the Tribunal referred to the decision of the Hon'ble Calcutta High Court in the case of CIT v. Virgin Creations, which held that the relevant amendment was retrospective, thus excluding TDS payments made before the due date of filing the return from the purview of sec.40(a)(ia). Despite a contrary decision by the Tribunal, Mumbai Special Bench in the case of Bharti Shipyard Ltd. v. DCIT, the Tribunal chose to follow the judgment of the Hon'ble Calcutta High Court. Consequently, the Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision to delete the disallowance made by the Assessing Officer under sec.40(a)(ia). As a result, the cross objection filed by the assessee was deemed academic, and both the appeal by the Revenue and the cross objection by the assessee were dismissed.

In conclusion, the Tribunal's judgment addressed the issues of delay in filing the appeal and cross objection, as well as the allowance of deduction of expenses under sec.40(a)(ia) of the Income-tax Act, 1961. The decision highlighted the importance of adhering to legal provisions and precedents set by higher courts in determining tax liabilities and deductions.

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