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2022 (11) TMI 776 - AT - Income TaxTDS u/s 194A - addition u/s.40(a)(ia) - Non deduction of TDS - assessee in default - scope of second proviso to section 40(a)(ia) - failure of the assessee to deduct tax at source on interest paid by it to Muthoot Mini Finance Corporation Ltd. - HELD THAT:- Legislature has given statutory recognition to the judgment in Hindustan Coca Cola Beverage [2007 (8) TMI 12 - SUPREME COURT] amply demonstrates that the law declared by the Hon‟ble Supreme Court prevails even during the period 01-04-2012 to 30-06-2012 before the insertion of the proviso to section 201(1). Once a person is not deemed to be an assessee in default for failure to deduct tax at source or payment of tax after deduction, the logical consequence is that the provisions of section 40(a)(ia) do not get magnetized. Be that as it may, the relevant point to be accentuated in this regard is that the second proviso to section 40(a)(ia), considering failure of the assessee to deduct tax at source as not an assessee in default under the first proviso to section 201(1), unlike the first proviso to section 201(1), has been inserted w.e.f. 01-04-2013, which further strengthens the case of the assessee. The second point of view espoused by the AO as well as the ld. CIT(A) is that the assessee did not comply with the requirement of section 201(1) inasmuch as the certificate from the Chartered Accountant in Form 26A was not furnished. Admittedly, the assessee did not furnish it before the AO. For the first time, the assessee submitted a certificate from Muthoot Mini Finance Corporation Ltd. before the ld. CIT(A) that the income received from the assessee was included in the total income. Such certificate was not in Form 26A. However, during the course of the first appellate proceedings itself, the assessee furnished proper annexure to the certificate in Form 26A. CIT(A), on a remand report from the AO, has refused to take cognizance of it. In my opinion, the necessary requirement got fully satisfied once the certificate in the requisite form was obtained by the assessee and placed before the ld. CIT(A) and also the AO (during the course of remand proceedings). There is no qualitative difference between the first three certificates filed by the assessee before the CIT(A) for the first time for which the disallowance has been deleted and the fourth one, which was also filed before him for the first time for which the disallowance has been sustained. Ex consequenti, hold that the necessary condition has been satisfied and hence the assessee cannot be treated as an assessee in default. We ergo, delete the disallowance u/s.40(a)(ia) sustained in the first appeal. Appeal is allowed.
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