TaxTMI 
TaxTMI 
2021 (8) TMI 1211
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....ssessee did not deduct tax at source as was required by the provisions of Sec. 194A of the Income Tax Act, 1961 ["the Act"] The AO therefore added a sum of Rs. 5,75,710 to the total income of the assessee for non-deduction of tax at source by invoking the provisions of section 40(a)(ia) of the Act, which lays down that where tax is deductible on a payment and tax is not so deducted, then the sum in respect of which tax is not deducted at source, if it is claimed as expenditure in computing income from business, the same will not be allowed as a deduction, while computing the income from business. The AO accordingly made the impugned disallowance and addition to the total income u/s. 40(a)(ia) of the Act. 3. Before the CIT(Appeals), the ass....
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....ows:- "Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:" 5. The gist of the first proviso to Sec. 201(1) o....
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.... not be able to submit Form 26A and certificate of accountant under first proviso to sub section (1) of section 201 of the I.T. Act, 1961, which is an exception to the deduction of taxes at source. The said certificate was received after 31st December 2016. This contention of the appellant has been considered. It could be a reasonable proposition and also according to judicial decisions that if the recipient of interest in question has already considered the same for computing their income offered to tax then the disallowance u/s. 40(a)(ia) is not attracted. However, the appellant, admittedly, has not raised such a contention before the AO nor submitted any details/document in that context. During the appellate proceedings also, no such det....
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....dictional ITAT in its order dated 07-08-2015 in ITA No. 1078/Bang/2014 in the case of Glen Williams v/s. ACIT Circle - 1(1) has followed the decision of the Hon'ble Jurisdictional High Court. 8. Learned Counsel for the assessee reiterated the facts stated above and prayed for condonation of delay. The DR submitted that the assessee's stand has not been supported by the affidavit of Shri. G.R. Reddy, the erstwhile Counsel of the assessee. The learned Counsel for assessee submitted that the assessee's relationship with the erstwhile Counsel is strained and hence the assessee will be unable to get any affidavit. 9. I have given a careful consideration to the rival submissions. Ultimately the purpose of tax proceedings is to ensur....