2019 (1) TMI 1517

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.... 1,24,519/- for alleged non deduction of TDS on account of Contractual Payments to the Gunman paid applying the provisions of section 40(a) (ia) which are not applicable and as such the addition is illegal, arbitrary and unjustified. 2) That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs. 6,17,296/- for alleged Interest Payable as on 31st March 2013 by invoking provisions of section 43 B of the ACT, which are not applicable and as such the addition is illegal, arbitrary and unjustified. 3) That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the disallowance of deduction equal to the assessed income u/s 80 P (2) (a) (i) of t....

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....id down that in case of such entities, whose income is unconditionally exempt under section 10 of the Income-tax Act (the Act) and who are statutorily not required to file return of income as per section L39 of the Act, there would be no requirement for tax deduct ion at source (YDS) from the payments made to them since their income is anyway exempt under the Act. 2. Sect ion 10(26BBB) came into existence after the issue of the said Circular dated 16.07.2002. The said sect ion was inserted in the Income-tax Act vide Finance Act, 2003 (w.e.f. 01.04.2004; unconditionally exempting any income of a corporation established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen being the citizens of India....

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.... the period under consideration comes to Rs. 1,24,519/-, which had duly been paid to M/S Punjab Ex Servicemen Corporation, Chandigarh. The said payment was given without the deduction of TDS as the corporation i.e. M/S Punjab Ex Servicemen Corporation, Chandigarh had got Exemption U/S 10(26BBB] of the Income Tax Act, 1961 regarding deduction of Income Tax. SECTION 10(26BBB) OF THE INCOME-TAX ACT, 1961 - CORPORATION ESTABLISHED FOR WELFARE AND ECONOMIC UPLIFTMENT OF EXSERVICEMEN - REQUIREMENT OF TAX DEDUCTION AT SOURCE IN CASE OF CORPORATIONS WHOSE INCOME IS EXEMPT UNDER SECTION 10 (26BBB) EXEMPTION THERE OF CIRCULAR NO. 7 / 2015 [F.NO.275/50/2006-IT(B]], DATED 23-4-2015. The CBDT Circular No. 4/2002, dated 16-7-2002 provides that in case ....

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....ervicemen (being citizen of India) is exempt from tax under section 10 (26BBB). 10. Keeping in view the Circular issued by the CBDT the disallowance made by the Assessing Officer which was not based on the said Circular is hereby deleted. 11. The Ground No. 2 pertains to the disallowance of Rs. 617296/- under section43B. 12. During the course of assessment proceedings the assessee was seen to have claimed interest expenses of Rs. 1,56,50,627/- payable to SADB as on 31st March 2013. But the assessee had failed to discharge its entire liability of payable as on 31st March 2013 before due date of filing of return. Accordingly, the amount of Rs. 6,17,296/- (1,56,50,627 - 1,50,33,331/-) was disallowed by Assessing Officer invoking the provisi....