DCIT(TDS)-2(1), MUMBAI, MUMBAI vs. PFIZER LIMITED, MUMBAI

ITA 2882/MUM/2026Status: DisposedITAT Mumbai20 August 2026AY 2019-209 pages
AI SummaryDismissed

What were the facts?

The assessee created year-end provisions for various expenses without deducting TDS, as invoices were not received and liabilities were not crystallized. The assessee later reversed these provisions and deducted TDS upon actual payment. The Assessing Officer treated the assessee as an assessee in default for non-deduction of TDS at the time of provision creation.

What did the Tribunal hold?

The Tribunal held that the mere creation of year-end provisions, in the absence of an identifiable payee and a crystallized liability, does not trigger an obligation to deduct tax at source. Consequently, the assessee cannot be treated as an assessee in default for such provisions.

What were the issues?

Whether TDS is deductible at the time of creating year-end provisions when the liability is not crystallized and the payee is not identifiable. Whether a demand under Section 201(1) can be raised if the expenditure was already disallowed under Section 40(a)(ia).

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(1A),Section 194C,Section 194H,Section 194I,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI G. M. DOSS

Pronounced: 20.08.2026

PER G.M. DOSS, ACCOUNTANT MEMBER :

This appeal has been preferred by the Revenue against the order dated 09.01.2026 passed by the learned Addl./Joint Commissioner of Income-tax (Appeals) [hereinafter referred to as “the learned JCIT(A)”] for the assessment year 2019-20, whereby the demand raised by the Assessing Officer under sections 201(1) and 201(1A) of the Income-tax Act, 1961 (“the Act”) on account of alleged failure on the part of the assessee to deduct tax at source on year-end provisions created towards various expenses was del

The order continues below.

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