R S INDUSTECH PRIVATE LIMITED,GANDHIDHAM vs. ITO WARD-2, GANDHIDHAM, GANDHIDHAM

ITA 843/RJT/2026Status: DisposedITAT Rajkot08 October 2026AY 2018-197 pages
AI SummaryAllowed

What were the facts?

The assessee, RS Industech Private Limited, filed an appeal against the order of the National Faceless Appeal Centre (NFAC) Delhi/Commissioner of Income-tax (Appeals) for Assessment Year (AY) 2018-19. The NFAC/CIT(A) had upheld the Assessing Officer's (AO) rejection of the assessee's claim for a deduction of Rs. 10,48,139/- under Section 40(a)(ia) of the Income-tax Act, 1961. The AO had passed an assessment order under Section 143(3) on 14.02.2020. The assessee had made this claim for additional deduction via a letter during the assessment proceedings, arguing that since the Tax Deducted at Source (TDS) was paid in March 2018, the deduction was mandatory under the proviso to Section 40(a)(ia). The AO rejected this claim, and the CIT(A) confirmed the AO's action.

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal. The Tribunal noted that during AY 2017-18, expenses amounting to Rs. 38,27,130/- were incurred, on which TDS of Rs. 93,719/- was deducted but not paid by the due date under Section 139(1). Consequently, 30% of the amount paid or credited on which TDS was not paid was disallowed in AY 2017-18. The Tribunal observed that this TDS was paid on 21.03.2018 and 22.03.2018, which falls within FY 2017-18. As per the proviso to Section 40(a)(ia), 30% of such disallowed expenses are allowed as a deduction in the year in which the TDS is deposited. Therefore, the disallowance of Rs. 10,48,139/- made in AY 2017-18 should be allowed as a deduction in AY 2018-19. The Tribunal relied on the decision in Termo Penpol Ltd. v. ACIT (59 taxmann.com 90) (Cochin Trib.) which held that deduction should be allowed in the year tax is actually paid. The Tribunal directed the AO to allow the claim.

What were the issues?

1. Whether the Assessing Officer can entertain a fresh claim for deduction, not made in the original Return of Income, through a written submission without filing a revised return under Section 139(5) of the Income-tax Act, 1961, as per the ruling in Goetze (India) Ltd. v. CIT [2006] 284 ITR 323 (SC)? (Question of law and fact, concerning Section 139(5) and Section 40(a)(ia)). Assessee's Contention: The assessee argued that the additional claim of Rs. 10,48,139/- should be allowed under the proviso to Section 40(a)(ia) because the TDS, which was deducted in AY 2017-18 but not deposited on time, was paid in March 2018 (FY 2017-18), making it allowable in AY 2018-19. They also relied on CBDT Circular No. 14 of 1955 and Article 265 of the Constitution of India, and contended that the Appellate Tribunal could entertain the issue and direct the AO to grant relief. Revenue's Contention: The Revenue primarily reiterated the stand taken by the Assessing Officer, which was that a fresh claim for deduction cannot be entertained by the AO without a revised return, citing the Supreme Court's decision in Goetze (India) Ltd. The CIT(A) also noted that the assessee had not provided a reconciliation between TDS paid and disallowed expenses, and departmental circulars cannot override statutory provisions.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 139(5),Section 143(3),Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Appellant: Shri Kalpesh Doshi, Ld. AR
For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 27/07/2026Pronounced: 08/10/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2018-19, is directed against the order under section 250 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘NFAC/Ld.CIT(A)’], dated 06.03.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Act, dated 14.02.2020. 2. The grounds of appeal raised by the assesse

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 40(a)(ia)

All 7,267 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →