ITAT Kolkata allows deduction for timely TDS payment under Income Tax Act

The Appellate Tribunal ITAT Kolkata allowed the appeal by the assessee against the order of CIT(A)-Durgapur regarding the disallowance of expenditure under section 40(a)(ia) of the Income Tax Act. The Tribunal ruled in favor of the assessee, stating that deduction for TDS paid before the due date of filing of return is permissible under the Act. As the assessee had timely deducted and deposited TDS, the claim of expenditure was allowed, and the appeal was decided in favor of the assessee on 06.08.2013.

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Issues involved: Appeal against disallowance of expenditure u/s 40(a)(ia) of the Income Tax Act, 1961 despite timely TDS deduction and deposit.

Summary:
The Appellate Tribunal ITAT Kolkata heard the appeal by Revenue against the order of CIT(A)-Durgapur regarding the disallowance of expenditure under section 40(a)(ia) of the Act. The assessment for A.Yr. 2008-09 was framed by I.T.O., Ward-1(3), Durgapur u/s 143(3) of the Income Tax Act, 1961. The only issue was the disallowance of the claim of expenditure despite timely TDS deduction and deposit before the due date of filing of return u/s 139(1) of the Act.

The Tribunal considered the facts and the decision of the Hon'ble Calcutta High Court in a similar case. It was noted that once TDS is deducted and paid to the Government Account before the due date of filing of return of income, the issue is in favor of the assessee. The High Court had previously held that the amendment in section 40(a)(ia) by Finance Act, 2010 is remedial and curative, allowing deduction for TDS paid before the due date of filing of return u/s 139(1) of the Act. As the assessee had deducted and deposited TDS before the due date, the Tribunal allowed the claim of the assessee, ruling in favor of the assessee.

Therefore, the appeal of the assessee was allowed, and the order was pronounced in the open court on 06.08.2013.

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