TaxTMI 
TaxTMI 
2016 (4) TMI 518
X X X X Extracts X X X X
X X X X Extracts X X X X
.... rent paid of Rs. 131280 and hence the unjustified addition is to be set right by your Honor. 2. That in view of factual and legal position unless the assessee appellant is declared defaulter u/s 201(1 A) of the Act, disallowance of expenses done without making TDS u/s 40(a)(ia) of the Act, could not be made. Therefore the disallowances to be deleted. 3. That as per submissions made to the learned assessing authority and again the factual and legal submissions made to the learned CIT (Appeals II), Jaipur and further submissions to be made at the time of hearing of the appeal, it will be far clear that facts and legal position are in favor the assessee appellant, since it has been held by various ITAT and Hon. High court that the new s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n his total income. The appellant has submitted a copy of the acknowledgment of the return of income of the appellant which shows that refund was due. The second proviso to Sec 40(a)(ia) has been introduced by the Finance Act, 2012 and is effective from 1/4/2013. Therefore, it is not applicable to this assessment year. Also, the proviso to Sec 201(1) has been introduced by the Finance Act, 2012 and is effective from 1/7/2012. Therefore, it is not applicable to this assessment year. It is therefore, held that the Assessing Officer has correctly disallowed the rent paid u/s. 40(a)(ia) of the I.T. Act. The above grounds are dismissed." 4. Now the assessee is in appeal before us. The ld AR of the assessee has argued that the TDS was not dedu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....479 (Agra) has held that unless the assessee is not declared defaulter as per the first proviso to section 201(tA) which was introduced by the Finance Act 2012 then the second proviso to section 40(a)(ia) would not be applicable. It is a case where there is no loss occurred to the exchequer and hence the assessee would not be treated as assessee in default. Therefore if the assessee is not a defaulter under section 201(1 A) of the Act then the second proviso to section 40(a)(ia) would not be applicable. Section 40(a)(ia) was not a penal provision to punish the lapses of non-deduction of tax at source from payments for expenditure .particularly when the recipients had taken into account income embedded in the payments and paid due taxes ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this case it was held that where assessee made payments to a resident without deducting tax at source under section 194J and since payee had filed return and offered sum received from assessee to tax, impugned disallowance made under section 40(a)(ia) deserved to be deleted- Held, yes [Paras 13 and 14]. The facts of the case of the assessee -appellant are squarely covered by above stated decisions and therefore the disallowance made of Rs. 131280/- is totally illegal and unjustified and hence is to be deleted by your honor. Alternatively, since the assessee was prevented on account of sufficient and reasonable cause and under bonafide belief from deducting the tax & the department also did not suffer any revenue loss because the same was p....