2013 (11) TMI 738

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....nt has preferred the following questions of law for consideration in this appeal:- "(1) Whether on the facts and circumstances of the case, the ITAT has erred in law in not appreciating the provisions of explanation as inserted by Finance Act, 2010 w.e.f. 01.06.1976 in sub-section (2) of Section 9. (2) Whether on the facts and circumstances of the case, the ITAT erred in law in putting reliance on C.B.D.T. Circular No.786/2000 dated 07.02.2000 whereas no cognizance has been taken of Board's Circular No.7/2009 dated 22.10.2009, which clarifies the ambiguous interpretation of provision of law and is clarificatory in nature and therefore, is applicable retrospectively and effectively covers the case of the assessee. (3) Whether on the facts....

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....t. The ITAT confirmed the order of CIT (A) and dismissed the appeal. Shri Dhananjay Awasthi submits that liability to deduct tax arises out of Section 195 of the Act. The disallowance was made by A.O. under Section 40 (a) (i) for non-deduction of tax at source under Section 195. The liability has to be determined in accordance with the provisions of law and not of the circular. Even if earlier circulars did not make it obligatory on the part of assessee to deduct TDS since by Circular No.7 of 2009 all earlier circulars were withdrawn, the assessee would be liable as the withdrawal of the earlier circulars would be retrospective in nature and further that the assessment has to be made after withdrawal of the circular in accordance with law.....