TMI Blog2023 (6) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... no disallowance can be made by invoking provisions of section 40(a)(ia). In the case of Dish T.V. India Ltd. [ 2017 (10) TMI 539 - ITAT MUMBAI ] held that where tax was deductable u/s. 194J but was actually deducted u/s. 194C, such a short deduction would not meet requirements of section 40(a)(ia) of the Act as assessee could not be held as defaulter when there was only shortfall in deduction of TDS - Decided against revenue. - ITA No. 73/Ahd/2018 - - - Dated:- 16-6-2023 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Tushar Hemani, Sr. A.R. And Shri Parimalsinh B. Parmar, A.R. For the Revenue : Shri Bholaram Devashi, Sr. D.R. ORDER PER : SIDDHARTHA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... While allowing the appeal of the assessee, the ld. CIT(A) observed as under:- As can be seen from above, it is not a case where the appellant did not deduct TDS as per provisions of Section 194C of the Act. The TDS as provided in Section 194C of the Act was duly deducted. It is also not a case where TDS deducted was not deposited into government account. There is no dispute about these facts. The only default of the appellant is that it did not deduct surcharge on TDS deducted on payments above Rs. 10 lakhs amounting to Rs. 69,98,644/- as provided in Section 194C of the Act. Thus it is a case of short deduction of tax. As said above, the total of such payments is Rs. 69,98,644/-. Hence the default on account of non-deduction of surcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 can be made by invoking the provisions of section 40(a)( ia) of the Act. Thus it is clear that no disallowance should be made u/s 40(a)(ia) of the Act for short deduction of tax. Following the judgment of hon'ble High Court, of Calcutta in CIT, Kolkata XI vs M/s. S.K. Tekriwal (Supra) hon'ble ITAT Ahmedabad in Cadila Pharmaceuticals vs Additional commissioner of Income Tax vide order dated 11.07.2014 in ITA Nos. 1146 1518/Ahd/2011 in A.Y.2006-07 have held as follows has held as follows:- 26.1. We have gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of tax. Therefore, respectfully following the judgement of Hon'ble Calcutta High Court in the case of CIT vs. S.K.Tekriwal, we do not find ny infirmity in the order of the Id.CIT(A), same is hereby upheld. Thus, this ground of Revenue's appeal is rejected. In my considered opinion ratio of the above judgments is squarely applicable to the facts of the present case. It would be travesty of justice to disallow entire payments of Rs, 69,98,644/- on account of nominal shortfall in IDS on account of non-deduction of surcharge. Accordingly, in view of discussion above and relying on the judgments of the hon'ble High Court of Calcutta in CIT, Kolkata XI vs M/s. S.K. Tekriwal (supra) and judgment of hon'ble IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer made disallowance u/s. 40(a)(ia) of the Act on the ground that assessee company had made short deduction of tax and thus was in violation of section 197(1), since for cases of short deduction correct course of action would be to invoke section 201, thus impugned disallowance u/s. 40(a)(ia) of the Act was to be deleted. In the case of Dish T.V. India Ltd. vs. ACIT 86 taxman.com 177 (Mumbai Tribunal) , the Mumbai ITAT held that where tax was deductable u/s. 194J but was actually deducted u/s. 194C, such a short deduction would not meet requirements of section 40(a)(ia) of the Act as assessee could not be held as defaulter when there was only shortfall in deduction of TDS. In the case of Three Star Granites vs. ACIT 49 taxman.com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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