The Tribunal held that the deduction of tax at source was not in the nature of the Income-tax which was required to be paid on profits and gains chargeable to tax under section 28 of the Act and thus was not disallowable under section 40(a)(ii) of the Act. The consequent interest paid under section 201(1A) of the Act upon late payment of tax deduction at source also could not be disallowed under section 40(a)(ii) of the Act. Therefore, the disallowance of interest paid on belated payment of tax deducted at source was deleted. (AY. 2014-15)
Welkin Telecom Infra (P.) Ltd. v. Dy. CIT (2022)96 ITR 475 (Kol) (Trib)
S. 40(a)(ii) : Amounts not deductible-Rates or tax-Deduction of tax at source is not in nature of Income-Tax-Interest paid upon late payment of deduction of tax at source cannot be disallowed. [S. 28, 37(1), 199, 201(1a)]