https://www.taxtmi.com/caselaws?id=248175 The ITAT Agra held that the second proviso to Section 40(a)(ia) has retrospective effect from 1 April 2005 and exempts disallowance where the recipient has included the payment in income, paid applicable taxes, and filed returns. The provision's objective is to disallow deductions only when the income remains untaxed due to non-deduction of TDS by the assessee. It is not intended as a penalty for non-deduction if the recipient has complied with tax obligations. The amendment is curative and declaratory, preventing unintended harsh consequences. The matter was remitted to the AO for fresh adjudication in line with this interpretation. The decision was in favor of the assessee. en-us Thu, 29 May 2014 00:00:00 +0530 Mon, 22 Jun 2026 10:17:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=248175 The ITAT Agra held that the second proviso to Section 40(a)(ia) has retrospective effect from 1 April 2005 and exempts disallowance where the recipient has included the payment in income, paid applicable taxes, and filed returns. The provision's objective is to disallow deductions only when the income remains untaxed due to non-deduction of TDS by the assessee. It is not intended as a penalty for non-deduction if the recipient has complied with tax obligations. The amendment is curative and declaratory, preventing unintended harsh consequences. The matter was remitted to the AO for fresh adjudication in line with this interpretation. The decision was in favor of the assessee. Case-Laws Income Tax Thu, 29 May 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=248175