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The Hyderabad bench of ITAT in [2022] 26 ITR (Trib)-OL 88 held that section 40(a)(ia) is applicable only in those cases
where tax has not been deducted at all. In this case the assessee has deducted tax at lower rate.
On the contrary the Kerala High Court in [2016] 380 ITR 284 (Ker) held that deduction under a wrong provision of law will not save an assessee from section 40(a)(ia) which did not find mention in the Tribunal order which chose to go by the favourable decision from Calcutta High Court in CIT v. Tekriwal (S. K.) [2014] 361 ITR 432 (Cal). The Kerala High Court has chosen to stay apart from Calcutta view.
Looking at this varied view the bench should have referred the subject to the special bench and by overlooking the Kerala Court decision the decision suffers from vice of law and has become less than speaking order liable to be quashed.
The tax auditor may have to consider the effect of these different interpretations in his report observations.

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