TMI Blog2012 (12) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied then such payment cannot be disallowed u/s. 40(a)(ia). Here in the present case the assessee has deducted tax u/s. 194C(2) and not u/s. 194I but there is no allegation that this TDS is not deposited with the Government account. Section 40(a)(ia) refers only to the duty to deduct tax and pay to government account there is nothing in the said section to treat the assessee as defaulter w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deduction of tax as is the import of section 40a(ia) of the Act. But the revenue s contention is that the payments are in the nature of machinery hire charges falling under the head rent and the previous provisions of section 194I of the Act are applicable. According to revenue, the assessee has deducted tax @ 1% u/s. 194C(2) of the Act as against the actual deduction to be made at 10% u/s. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been deducted. If both the conditions are satisfied then such payment can be disallowed u/s. 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bonafide wrong impression, under wrong provisions of TDS, the provisions of section 40(a)(ia) of the Act cannot be invoked. Here in the present case before us, the assessee has deducted tax u/s. 194C(2) of the Act and not u/s. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in sub-section (1) of section 139 . This section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s. 201 of the Act and no disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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