Dismissing the appeal of the revenue the Court held that ; The second proviso to S. 40(a)(ia) of the Income-tax Act, 1961 introduced by the Finance Act, 2012 (which provides that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B but is not deemed to be an assessee-in-default under the first proviso to S. 201(1) , i. e., the payee has filed a return taking into account such sum for computing his income, has paid the tax due on such income declared and furnishes a certificate to this effect from an accountant, the assessee shall not be subject to disallowance in respect of such sum) has retrospective application. ( AY. 2009-10)
CIT v. Manoj Kumar Singh. (2018) 402 ITR 238/ 303 CTR 294/ 167 DTR 179 (All) (HC)
S.40(a)(ia):Amounts not deductible – Deduction at source – Proviso excepting assessee from disallowance where payee has declared payment in his return and paid tax thereon has retrospectively applicable, hence no disallowance can be made .[ S. 201(1) ]