The ratio may be a case specific and may not sustain longer.
Further, if deduction rate is same in two sections, wrong mentioning of section may not result in disllowance u/s 40(a)(ia). Similar outcome could be there if the deduction is done at higher rate than one applicable under relevant section for example, if particular payment is covered by section 194c @ 1% or 2% and the asessee has deducted tax u/s 194J @ 10%.
IT : Deduction of TDS under wrong provision of law will not save assessee from disallowance u/s 40(a)(ia)
• The expression "tax deductible at source under Chapter XVII-B" occurring in section 40(a)(ia) has to be understood as tax deductible under the appropriate provision of Chapter XVII-B. Therefore, if tax is deductible under section 194J but is deducted under section 194C, the requirements of section 40(a)(ia) are not satisfied. A deduction under the wrong provision of law will not save the assessee from disallowance u/s 40(a)(ia).
[2015] 60 taxmann.com 69 (Kerala)
HIGH COURT OF KERALA
Commissioner of Income-tax-1, Kochi
v.
P V S Memorial Hospital Ltd.
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