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2014 (11) TMI 1197 - AT - Income TaxDisallowance u/s 40(a)(ia) for non deduction of TDS - Assessee paid interest on the deposits - as per assessee once the recipient entities are entitled for exemption u/s 10(23C) the assessee is not liable to deduct tax - HELD THAT:- The contention of the assessee that provisions of section 40(a)(ia) is applicable only in respect of the amounts remains to be paid as on the last day of the financial year is not accceptable. This Tribunal had an occasion to examine an identical set of facts in Shri Thomas George Muthoot & Ors [2015 (9) TMI 323 - ITAT COCHIN] Section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirement of the said provision exist. Judgments of the Calcutta High Court in Crescent Export Syndicate (supra) and the Gujarat High Court in Sikandarkhan N Tunvar (supra) are squarely applicable to the facts of the case. We do not see any infirmity in the orders of the lower authorities. Accordingly, the orders of the lower authorities are confirmed. - Decided against assessee. Payment was paid to the fund which was approved u/s 10(23C)(iv) - HELD THAT:- The recipient entities are required to file the returns of income even though they are approved u/s 10(23C) by the concerned Chief Commissioner wherever the income exceeds the taxable limit without giving effect to provisions of section 10(23C) of the Act. Therefore, for computation of total income, the recipient entity may exclude the income which is applied for charitable purpose as per the object of the fund / institution and the conditions imposed by the Chief Commissioner. Hence, it is a matter factually to be verified in each and every case and there cannot be a total exemption. In the case before us, only in respect of one recipient, viz. Kerala Building & Other Constructions Workers Welfare Board the assessee has filed copy of the approval received from the Chief Commissioner. In respect of other recipient funds / board the copies of the approval are not filed. Therefore, it needs to be verified. Accordingly, the orders of lower authorities are set aside only for the limited purpose of examining whether the recipient concerns / boards are approved u/s 10(23C)(iv) of the Act by the Chief Commissioner / DIT. Thereafter, the assessing officer shall find out whether the interest is taxable in the hands of the recipient funds / board or not and then decide the issue in accordance with law after giving reasonable opportunity of hearing to the assessee.
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