M/s. SOCOMEC India Pvt. Ltd vs. Dy. CIT, TDS Circle, Gurgaon

Parties Involved

Facts Summary

The assessee, M/s. SOCOMEC India Pvt. Ltd, is a company engaged in the business of manufacturing Switch gears and UPS systems. The assessee had made certain provisions for expenses by not crediting to the concerned account of the payees or by identifying the names of the payees. However, these expenses were debited in the profit and loss account. The assessee voluntarily disallowed 30% of those expenses under Section 40(a)(ia) of the Income-tax Act, 1961 in the return of income. The bills were received from the vendors after the end of the accounting period, and the deduction of tax at source and remittance to the Central Government account was made in the subsequent assessment year. Despite various Tribunal decisions favoring the assessee, the Assessing Officer treated the assessee as an ‘assessee in default’ and collected tax under Section 201(1) and consequential interest under Section 201(1A) of the Act.…

Legal Issues

• 1. Whether the ld CIT(A) was justified in treating the assessee as an ‘assessee in default’ and levying interest under Section 201(1A) for voluntary disallowance under Section 40(a)(ia).

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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