Held, that under the second proviso to section 40(a)(ia) of the Act applicable from April 1, 2013, if an assessee fails to deduct tax at source, but is not deemed to be assessee in default under the first proviso to sub-section (1) to section 201, it is to be deemed that section 40(a)(ia) has been complied with. The proviso was retrospective in nature. Before the Commissioner (Appeals) the assessee provided a certificate from the chartered accountant to fulfil the condition laid down in the first proviso to section 201(1) of the Act. Therefore, no disallowance under section 40(a)(ia) of the Act is required to be made on account of non-deduction of tax. Relied on CIT v. Ansal Land Mark Township P. Ltd.(2015) 377 ITR 635 (Delhi)(HC) (AY.2013-14)
Meridian Telesoft Ltd. v. Asst. CIT (2023)108 ITR 37 (SN)(Ahd) (Trib)
S. 40(a)(ia) : Amounts not deductible-Deduction at source-Certificate from Chartered Accountant that payee has included amount in question in his return and paid tax thereon-Assessee is not in default-Disallowance is deleted.[S. 194A, 201(1)]