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“short deduction of TDS”

DisallowancesSection 40(a)(ia)Section 40(a)(ia)177 judgments

The decision most relied on for short deduction of TDS is CIT v. Ansal Landmark Township (P.) Ltd. (61 Taxmann.com 45), cited in 177 judgments on BharatTax.

Leading authorities on short deduction of TDS

CIT v. Ansal Landmark Township (P.) Ltd.
61 Taxmann.com 45 · 2015 · High Court
177
citing judgments

Disallowance under section 40(a)(ia) cannot be made when the assessee has deducted tax at a lesser rate, as opposed to no deduction. The second proviso to section 40(a)(ia) is applicable retrospectively, mitigating disallowance where tax is deposited by the recipient.

CIT v. Nicholas Piramal India Ltd.
292 ITR 636 · 2007 · High Court
153
citing judgments

The deduction of tax at source under section 192 is not to be considered short if the employer makes a bona fide estimate of the taxable salary income of the employee.

CIT v. S.K. Tekriwal
361 ITR 432 · 2014 · High Court
150
citing judgments

Section 40(a)(ia) of the Income Tax Act does not apply to disallow expenses when there is a short deduction of tax at source. This includes situations where TDS is deducted at a lower rate than required or under an incorrect section.

DIT v. Jacabs Civil Incorporated/ Mitsubhishi Corporation
330 ITR 578 · 2011 · High Court
115
citing judgments

Interest under Section 234B is generally not leviable on non-residents whose income is subject to tax deduction at source under Section 195, provided the non-resident assessee did not induce short or non-deduction of TDS by the payer.

Ferro Alloys Corporation Ltd. v. CIT
196 ITR 406 · 1992 · High Court
37
citing judgments

Interest levied for delayed payment or short deduction of TDS is not an allowable business expenditure.

State Bank of India v. Assistant Commissioner of Income-tax
144 Taxmann.com 131 · 2022 · Supreme Court
35
citing judgments

An assessee is required to deduct tax at source on reimbursements, even if the assessee acted under a bona fide belief that such reimbursements were exempt.

DCIT v. Chandabhoy & Jassobhoy
49 SOT 448 · 2012 · ITAT
24
citing judgments

Section 40(a)(ia) is not applicable where tax has been deducted at source, even if at a lower rate than required, due to a difference in opinion regarding the nature of the payment.

(RE: CIT v. SK Tekriwal
90 DTR 26 · 2013 · High Court
20
citing judgments

Disallowance under Section 40(a)(ia) of the Income Tax Act for short deduction of TDS is not permissible if tax has been deducted, even if under a bona fide wrong impression of the correct TDS provision.

Judgments citing short deduction of TDS

ACIT, Circle-2(1), Visakhapatnam vs. Vizag Seaport Pvt. Ltd., Visakhapatnam

In the result, appeal of the Revenue is dismissed

ITA 383/VIZ/2017[2012-2013]Status: DisposedITAT Visakhapatnam12 Apr 2024AY 2012-2013

Bench: Shri Duvvuru Rl Reddy, Hon‟Ble & Shri S Balakrishnan, Hon‟Ble(Through Hybrid Hearing) आयकरअपीलसं./ I.T.A. No. 383/Viz/2017 (धनधाारणिर्ा/ Assessment Year : 2012-13) The Assistant Commissioner Of Vs. M/S. Vizag Seaport Pvt Ltd., Income Tax, Administrative Block, Circle-5(1), S4 Gallery, Port Area, Visakhapatnam. Visakhapatnam – 530035. (अपीलाथी/ Appellant) (प्रत्यथी/ Respondent) [Pan :Aabcv2484K] अपीलाथी की ओर से/ Assessee By : Sri Fenil A Bhatt, Ar प्रत्याथी की ओर से/ Revenue By : Dr. Satyasai Rath, Cit-Dr सुनिाई की तारीख/ Date Of Hearing : 15/02/2024 घोर्णा की तारीख/Date Of : /04/2024 Pronouncement O R D E R Pers. Balakrishnan:

For Appellant: Sri Fenil A Bhatt, ARFor Respondent: Dr. Satyasai Rath, CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 194CSection 194JSection 36(1)(iii)Section 40

Having said so, now the next question is whether the provisions of section 40(a)(ia) of the Act can be invoked for short deduction of TDS made by the assessee. On this issue, the Ld. DR submitted that the second proviso to section ... assessee as well as the Ld. DR, we find that most of the judicial pronouncements have held that when there is a short deduction of TDS, the correct course of action is to invoke the provisions of section 201 of the Act and disallowance U/s. 40(a)(ia) should

Chetan Pravin Chitalia, Mumbai vs. Assistant Commissioner of Income Tax Circle 18(1), Mumbai

In the result, appeal by the assessee is partly allowed

ITA 2468/MUM/2023[2014-15]Status: DisposedITAT Mumbai27 Oct 2023AY 2014-15

Bench: Shri Vikas Awasthy& Shri Prashant Maharshi आअसं.2468/मुं/2023 (िन.व. 2014-15) Chetan Pravin Chitaliya, 14, Ramwadi, Kalbadevi, Mumbai – 400 002 Pan: Aabpc-1904-E ...... अपीलाथ"/Appellant बनाम Vs. Asst.Commissioner Of Income Tax, Circle- 18(1), 202, 2Nd Floor, Earnest House, Ncpa Marg, Nariman Point, Mumbai – 400 021. ..... "ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri Jitendra Singh, Advocate "ितवादी "ारा/Respondent By : Shri Prabhat Kumar Gupta सुनवाई क" ितिथ/ Date Of Hearing : 19/10/2023 घोषणा क" ितिथ/ Date Of Pronouncement : 27/10/2023 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Passed By Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[In Short ‘The Cit(A)’] Dated 02/05/2023, For The Assessment Year 2014- 15. 2. This Appeal Is Time Barred By 11 Days. The Assessee Has Filed An Application Praying For Condonation Of Delay, Citing Reasons For The Delay In Filing Of Appeal. We Have Perused The Said Application. We Are Satisfied That The Delay In Filing Of Appeal Is For The Bonafide Reasons Stated In The 2 Application. The Delay Of 11 Days In Filing Of Appeal Is Condoned & The Appeal Is Admitted For Adjudication On Merits.

For Appellant: Shri Jitendra Singh, AdvocateFor Respondent: Shri Prabhat Kumar Gupta
Section 14ASection 194C

behalf of the assessee submitted that the CIT(A) in an ex-parte proceedings has upheld the addition/disallowance made in respect of : (i) Short deduction of TDS; and (ii) Disallwoance u/s. 14A of the Income Tax Act, 1961 [in short ‘the Act’] r.w.r. 8D of the Income Tax Rules ... aforesaid parties. The ld. Counsel for the assessee submitted that it is a well settled law that no disallowance can be made for short deduction of TDS. In support of his contentions he placed reliance on the decision in the case of CIT vs. S.K.Tekriwal