Tuesday, 17 April 2012

S. 40(a)(ia): Non-jurisdictional High Court prevails over Special Bench

Rajamahendri Shipping & Oil Field Services Ltd vs. ACIT (ITAT Vizag)


For AY 2005-06, the AO disallowed Rs. 47.26 lakhs u/s 40(a)(ia) on the ground that the TDS had not been paid in time. The assessee claimed that the amendment to s. 40(a)(ia) by the Finance Act 2010 w.e.f. 1.4.2010 to provide that no disallowance could be made if the TDS was paid on or before the due date specified in s. 139(1) was retrospective in nature as held in CIT vs. Virgin Creations and that the contrary ruling of the Special Bench in Bharti Shipyard Ltd vs. DCIT 132 ITD 53 (Mum) could not be followed. HELD by the Tribunal:

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