Can expense be allowed if tax is deducted in next year

Nilesh K (CA, CFE, FAFD) (97 Points)

21 October 2011  

Hi

Pls help me sort out this

If a company has not deducted tax on an expense/payment claiming that no TDS is applicable, in year 1 and later on in year 2 it has changed its view & wants to pay the tax liability for expense of year 1, do the company need to file in a revised return for year 1, claiming the said expense as disallowable for year 1?

Also how should the same be disclosed in the tax audit for year 2 in the following cases

  1. the tax auditor had allowed the expense in year 1 & the same was also claimed accordingly in the return filed by the company.
  2. the tax auditor had disallowed the expense in year 1 & but in the return the expense was claimed as allowable
  3. the tax auditor had disallowed the expense in year 1 & the same was also disallowed accordingly in the return filed by the company.