TMI Blog2012 (7) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... ng his powers conferred u/s 263 of the Income Tax Act, 1961 ( the Act for short). The CIT issued a notice to the assessee on the ground that the assessee has deducted an amount of ₹ 32,29,987/- and paid to the Government account after due date specified u/s 200(1) of the Act. The assessee has paid the TDS deducted amount to the Government account belatedly and hence the belated payment of ₹ 32,29,987/- is not allowable in the assessment year 2007-08 and called for the explanation from the assessee. It was submitted by the learned counsel at the time of hearing that the very issue of notice by the CIT exercising power u/s 263 of the Act was void ab initio on the ground that the notice was issued by the CIT on 05-12-2011. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee for the assessment year 2007-08. As per the provisions of section 40(a)(ia) of the Act, the TDS deducted amount is to be paid to the Government account within the time prescribed by section 200(1) of the Act. The very same issue has come before the Hon ble Calcutta High Court in the case of Virgin Creations (supra), wherein the Hon ble High Court has considered the issue as under : It is argued by Mr. Nizamuddin that this court needs to take decision as to whether section 40(A)(ia) is having retrospective operation or not. The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2005 and April 28, 2006 and the same were paid by the assessee in Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, Mumbai Special Bench in the case of Bharti Shipyard Ltd. V. DCIT (132 ITD 53) had held against the assessee on this issue, the decision of the Hon ble Calcutta High Court is in favour of the assessee. Therefore, we have to follow the judgment of the Hon ble Calcutta High Court rather than the decision of the Tribunal, Mumbai Special Bench. Accordingly, we hold that the Commissioner of Income-tax (Appeals) is justified in deleting the disallowance made by the Assessing Officer under sec. 40(a)(ia). In view of the above, it cannot be said that the order passed by the AO is erroneous. We, therefore, cancel the order passed by the learned CIT under section 263 of the Act. This ground of appeal by the assessee is allowed. 5. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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