S. 40(a)(ia) : Amounts not deductible-Deduction at source-Tax deposited before filing of return-No disallowance can be made- Amendment made by the Finance Act, 2010 being curative in nature required to be given retrospective operation i.e., from the date of insertion of the said provision. [S. 139(1)]
The assessee had made payment on account of sub-contracting, expenses, transporters, machine hiring charges etc.. Out of the payments to sub-contractors, the Assessing Officer found that tax deducted at source (TDS) was deposited beyond due dates prescribed under chapter XVII-B but before the due date of furnishing of return of income. The Assessing Officer disallowed on various accounts under section 40(a)(ia) of the Act. On appeal CIT(A) as the amount was deposited within the due date of filing of the return of income no disallowance could be made for delayed deposit of tax . Tribunal affirmed the order of CIT(A). On appeal by revenue, dismissing the appeal the Court held that the disallowance could not have mad under section 40(a)(ia) of the Act in view of the retrospective nature of the proviso to the said section. CIT v. Calcutta Export Company (2018) 404 ITR 654/255 Taxman 293/302 CTR 201 (SC) followed (ITA No. 667 of 2018 dt. 29-7-2022) (AY. 2005-06).
PCIT v. Crescent Construction Co. (Bom.)(HC) www.itatonline.org

[Coram : Hon’ble Shri Justice Dhiraj Singh Thakur and Hon’ble Shri Justice Abhay Ahuja]