2012 (7) TMI 1112

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....ee before us questioning the notice issued by the CIT while exercising his powers conferred u/s 263 of the Income Tax Act, 1961 ('the Act' for short). The CIT issued a notice to the assessee on the ground that the assessee has deducted an amount of Rs. 32,29,987/- and paid to the Government account after due date specified u/s 200(1) of the Act. The assessee has paid the TDS deducted amount to the Government account belatedly and hence the belated payment of Rs. 32,29,987/- is not allowable in the assessment year 2007-08 and called for the explanation from the assessee. It was submitted by the learned counsel at the time of hearing that the very issue of notice by the CIT exercising power u/s 263 of the Act was void ab initio on the ground ....

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....- may be disallowed and added back to the total income of the assessee for the assessment year 2007-08. As per the provisions of section 40(a)(ia) of the Act, the TDS deducted amount is to be paid to the Government account within the time prescribed by section 200(1) of the Act. The very same issue has come before the Hon'ble Calcutta High Court in the case of Virgin Creations (supra), wherein the Hon'ble High Court has considered the issue as under : "It is argued by Mr. Nizamuddin that this court needs to take decision as to whether section 40(A)(ia) is having retrospective operation or not. The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2....