Question ID : 166

Disallowance u/s40(a)(ia) - delayed payment of TDS

A job worker (company), for the year ended 31-3-05 received Rs.100cs receipts and pays 80cs sub-contract charges. TDS @ 1.02% Rs.81,600,- is paid by him only June 2005 (Due date u,s 200(1) beg 31-5-05). His Net profit is Rs.10cs and come-tax liability should be Rs.36,600,-. If the sub-contract payment of Rs.80cs is disallowed, his tax liability would be around Rs.35cs cludg 234B & 234C. How can he pay Rs.35cs havg earned only Rs.10cs.The Assessee may not survive to get the set-off the subsequent years for it will take more than 7 years for him to get the set-off full, conrg his earng of Rs.10cs per year. He may not survive even the first year, due to the fancial burden? His entire workg capital would be draed and his Bank loan would become NPA. What is the remedy? '

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