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Delay Excused: ITAT Rules on Non-Taxable Salary, Overturns Rs. 1,44,000 Disallowance Due to Notification Mix-Up. The ITAT condoned a 46-day delay in filing an appeal, accepting the assessee's unfamiliarity with email notifications. The Tribunal ruled in favor of the ...
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Delay Excused: ITAT Rules on Non-Taxable Salary, Overturns Rs. 1,44,000 Disallowance Due to Notification Mix-Up.
The ITAT condoned a 46-day delay in filing an appeal, accepting the assessee's unfamiliarity with email notifications. The Tribunal ruled in favor of the assessee, overturning the disallowance of Rs. 1,44,000 under section 40(a)(ia) of the Income-tax Act, as the payment was a non-taxable salary, not requiring TDS under section 194J.
Issues: 1. Condonation of delay in filing appeal. 2. Disallowance u/s 40(a)(ia) of the Income-tax Act, 1961.
Condonation of Delay: The appeal was filed by the assessee against the order of the National Faceless Appeal Centre, Delhi, which was time-barred by 46 days. The assessee sought condonation of delay, stating that they were not aware of the order due to lack of familiarity with technology advancements regarding notice delivery through emails. The Tribunal accepted the reason provided by the assessee and decided to condone the delay, emphasizing that the delay did not benefit the assessee in any way. The appeal was admitted for adjudication in the interest of justice.
Disallowance u/s 40(a)(ia): The main grievance of the assessee was against the disallowance of Rs. 1,44,000 under section 40(a)(ia) of the Act for alleged non-deduction of tax at source under section 194J on accountancy charges debited in the profit and loss account. The assessee contended that the amount paid as a monthly salary to the accountant was not subject to tax deduction at source. The Tribunal noted that the salary paid to the accountant was below the taxable limit and was not for professional or technical services, thus no tax deduction was required under section 194J. Consequently, the disallowance of Rs. 1,44,000 was set aside, and the appeal of the assessee was allowed.
In conclusion, the Tribunal allowed the appeal of the assessee, ruling in favor of the assessee on the issue of disallowance under section 40(a)(ia) of the Income-tax Act, 1961. The judgment was pronounced in Kolkata on 3rd October 2024.
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