https://www.taxtmi.com/article/detailed?id=1443 Disallowance for failure to deduct tax is unjustified where the payee's income is not taxable in India. In the cited ITAT case the Tribunal found services rendered and paid outside India with no establishment in India, concluding no Indian income arose or that the receipts were business profits not taxable absent a permanent establishment, and therefore upheld deletion of the disallowance. The author recommends omitting the disallowance rule or creating a specific exemption to avoid undue administrative burden and harsh penalties. en-us Wed, 28 Sep 2011 17:39:21 +0530 Wed, 28 Sep 2011 17:39:21 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=1443 Disallowance for failure to deduct tax is unjustified where the payee's income is not taxable in India. In the cited ITAT case the Tribunal found services rendered and paid outside India with no establishment in India, concluding no Indian income arose or that the receipts were business profits not taxable absent a permanent establishment, and therefore upheld deletion of the disallowance. The author recommends omitting the disallowance rule or creating a specific exemption to avoid undue administrative burden and harsh penalties. Articles Income Tax Wed, 28 Sep 2011 17:39:21 +0530 https://www.taxtmi.com/article/detailed?id=1443