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2013 (11) TMI 738 - HC - Income TaxCircular binding upon AO – Applicability of Circular No.7 of 2009 dated 22.10.2009 – Disallowance u/s 40(a)(ia) of the Income tax act – Held that:- The assessment in question for the assessment year 2007-08 would be governed by Circular, which was operative at the relevant time. The assessee was not entitled to deduct TDS. The department could not have taken different stand in subsequent years or assessment year 2007-08, when the circulars were operative and were not withdrawn - Circulars in the relevant year was binding upon the department and assessee can challenge the affect of the Circular but that the A.O. did not have any right to ignore the circulars and to disallow non-deduction of tax at source under Section 195 and under Section 40 (a) (i) of the Act – Reliance has been placed on the judgment in Commissioner of Income Tax, Allahabad and another vs. M/s Model Exims Kanpur [2013 (9) TMI 742 - ALLAHABAD HIGH COURT] - Decided against the Revenue.
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