This compilation indexes twelve Income Tax Appellate Tribunal (ITAT) orders, all pronounced in August 2026, in which Section 40(a) of the Income-tax Act, 1961 was one of the sections engaged. The orders span benches at Ranchi, Pune, Mumbai, Bangalore, Ahmedabad, Hyderabad, Jabalpur, Delhi, and Kolkata, and cover a range of factual contexts including withholding-tax disallowances, payments to foreign parties, search assessments, and deduction claims. The compilation is intended for use by in-house tax teams, Big-4 associates, and law-firm researchers who need a quick-reference index of recent ITAT activity on this provision before retrieving full judgments from official portals.

Research index only. This page is a structured case-law reference, not legal or tax advice. Readers should retrieve and verify the full text of each judgment before relying on it for any purpose.

The statutory framework in one paragraph

Section 40(a) of the Income-tax Act, 1961 specifies amounts that, notwithstanding anything in Sections 30 to 38, shall not be deducted in computing income chargeable under the head "Profits and gains of business or profession." The most frequently litigated sub-clauses are Section 40(a)(i), which disallows payments chargeable to tax under the Act made to non-residents (including interest, royalty, fees for technical services, and other sums) where tax has not been deducted or, after deduction, has not been paid before the due date for filing the return; and Section 40(a)(ia), which applies an analogous disallowance to certain payments to residents. The provision operates in close conjunction with the TDS machinery under Chapters XVII-B and XVII-BB, meaning that the validity or otherwise of a disallowance under Section 40(a) often turns on whether a TDS obligation existed in the first place, whether it was discharged, and whether the payee has independently discharged its tax liability on the same income.

The 12 rulings

1. Usha Martin Limited ,Kolkata vs ACIT Cir-3 , Ranchi

Bench: Income Tax Appellate Tribunal - Ranchi
Date: 27 August 2026
Sections engaged: 143(1), 195, 40(a), 80, 801A, 9(1)
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal was filed by the assessee against the order of the CIT(A), Ranchi for Assessment Year 2009-10 (ITA No. 273/Ran/2017). Per the source preview, the contested grounds covered multiple heads including non-deduction of withholding tax of ₹1,22,02,492, interest disallowance of ₹1,75,10,000, transfer pricing adjustments of ₹10,87,70,489, and other items; the full reasoning of the bench is not available in the source preview.

2. Dy. Commissioner Of Income Tax vs Baramati Agro Limited , Pune

Bench: Income Tax Appellate Tribunal - Pune
Date: 25 August 2026
Sections engaged: 115J, 32, 40(a), 40A(3), 43B, 80, 801A, 80A
Outcome: Outcome not specified in source
Procedural / substantive ground: This was a Revenue appeal (ITA No. 395/PUN/2026) for Assessment Year 2021-22 against Baramati Agro Limited. Per the source preview, the dispute involved deduction claims relating to two undertakings — Shetphalgade and Kannad — with differences between book profits and amounts claimed under a deduction provision amounting to a combined difference of ₹6,43,80,455; the full reasoning and outcome of the bench are not available in the source preview.

3. International Specialty Products vs The Deputy Commissioner Of Income Tax

Bench: Income Tax Appellate Tribunal - Mumbai
Date: 25 August 2026
Sections engaged: 147, 195, 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: Per the source preview, the assessee's counsel argued before the Tribunal that the liability to deduct tax under Section 195 is the foundational issue upon which the entire disallowance under Section 40(a)(i) rests, and that since the appeal arising from the order under Sections 201(1) and 201(1A) was still pending before the First Appellate Authority, the present appeal ought to be restored to the CIT(A). The CIT(A) had confirmed a disallowance of ₹2,35,72,409 without independently adjudicating the various legal and factual grounds raised by the assessee.

4. Prakash Palgota ,Hubli vs DCIT Circle-1(1) & Tps, Hubli

Bench: Income Tax Appellate Tribunal - Bangalore
Date: 24 August 2026
Sections engaged: 115B, 143(3), 144B, 194A, 40(a), 69C
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal was filed before the Tribunal as ITA 2710/BANG/2025 for Assessment Year 2022-23. Per the source preview, the bench noted that the orders passed were bad in law and liable to be quashed; the detailed substantive reasoning underlying that observation is not available in the source preview.

5. Jupiter Comtex Private Limited,Vatva vs Asst. CIT Circle 2(1)(1), Vejalpur

Bench: Income Tax Appellate Tribunal - Ahmedabad
Date: 24 August 2026
Sections engaged: 195(2), 40(a), 5(2)(b), 9(1)(i)
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal (I.T.A. No. 1823/Ahd/2026) related to Assessment Year 2012-13. Per the source preview, the assessee's grounds contended that there was no liability to make TDS on payment of sales commission to a foreign agent rendering services outside India, and that the NFAC erred in not appreciating that the payee foreign agent had rendered services outside India for effecting sales, such that there was no justification to apply Section 40(a)(i) to make a disallowance of expenditure on commission.

6. Nippon Koei Co. Ltd.,Begumpet vs ADIT (International Taxation)- 2

Bench: Income Tax Appellate Tribunal - Hyderabad
Date: 21 August 2026
Sections engaged: 192, 254(2), 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: The proceeding before the Tribunal was a Miscellaneous Application (M.A. No. 65/Hyd/2026) arising out of ITA No. 670/Hyd/2023 for Assessment Year 2021-22. Per the source preview, the assessee sought recall of the Tribunal's earlier order dated 21.11.2025 on the ground that the impugned order contained a mistake apparent from the record within the meaning of Section 254(2) of the Income-tax Act; the substantive details of the alleged mistake are not available in the source preview.

7. DCIT(TDS)-2(1), Mumbai, Mumbai vs Pfizer Limited, Mumbai

Bench: Income Tax Appellate Tribunal - Mumbai
Date: 20 August 2026
Sections engaged: 201(1), 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: This was a Revenue appeal (ITA No. 2882/Mum/2026) for Assessment Year 2019-20 against an order of the JCIT(A) dated 09.01.2026. Per the source preview, the appeal arose against an order passed by the JCIT(A) in relation to a demand raised by the Assessing Officer under Section 201(1) on account of alleged failure to deduct tax; the full substantive reasoning of the bench is not available in the source preview.

8. Joshi Technologies International vs The Dy.CIT, Circle (Int.Taxn.)-1

Bench: Income Tax Appellate Tribunal - Ahmedabad
Date: 20 August 2026
Sections engaged: 143(3), 195, 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal (ITA No. 412/Ahd/2026) related to Assessment Year 2009-10. Per the source preview, the assessee is engaged in the business of oil exploration and production and had filed an original return of income on 30.09.2009 declaring total income of ₹16,50,75,438, with a revised return filed on 30.03.2011 declaring total income of ₹12,54,62,564; the assessment was originally completed under Section 143(3) pursuant to directions of the Dispute Resolution Panel dated 26.12.2013, and cross appeals were thereafter preferred before the Tribunal.

9. Sohaney Brothers,Seoni vs Income Tax Officer Ward, Seoni

Bench: Income Tax Appellate Tribunal - Jabalpur
Date: 20 August 2026
Sections engaged: 147, 201(1), 234A, 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal (ITA No. 132/JAB/2025) related to Assessment Year 2009-10. Per the source preview, the assessee's grounds contended that an addition of ₹12,72,060 made by the Assessing Officer under Section 40(a)(ia) was unsustainable because the payees had paid taxes on the payments made by the assessee, and that the second proviso to Section 40(a)(ia) applied; the grounds further alleged that Form 26A submitted during assessment proceedings was not considered by the Assessing Officer or the CIT(A).

10. Delhi State Industrial & vs Deputy Commissioner Of Income-Tax

Bench: Income Tax Appellate Tribunal - Delhi
Date: 17 August 2026
Sections engaged: 10(46), 143(1), 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: This was a batch of four assessee appeals (ITA Nos. 8870 to 8873/Del/2025) for Assessment Years 2018-19 and 2020-21 to 2022-23, arising against CIT(A)/NFAC orders passed on 30.10.2025 and 29.10.2025. Per the source preview, the appeals involved proceedings before the Tribunal relating to orders challenged by Delhi State Industrial & Infrastructure Development Corporation Limited; the full substantive reasoning of the bench is not available in the source preview.

11. Victory Sales Private Limited,Mumbai vs DCIT-Cent-Cir 8(3), Mumbai

Bench: Income Tax Appellate Tribunal - Mumbai
Date: 14 August 2026
Sections engaged: 131, 132(4), 133A, 142, 144, 145(3), 153A, 250, 37(1), 40(a), 40A(3), 68
Outcome: Outcome not specified in source
Procedural / substantive ground: This was a batch matter involving multiple ITAs for Victory Sales Private Limited and a connected entity across Assessment Years 2010-11 to 2016-17 (ITA Nos. 1704–1710/Mum/2025) and additional ITA numbers for Assessment Years 2010-11 to 2014-15 (ITA Nos. 5162, 5163, 5167, 5168, 5171/Mum/2024). Per the source preview, the proceedings involved a wide range of provisions including search and survey-related sections; the full substantive reasoning of the bench is not available in the source preview.

12. Siddharth Land & Building Pvt vs ITO, Ward 7(1), Kolkata,, Kolkata

Bench: Income Tax Appellate Tribunal - Kolkata
Date: 12 August 2026
Sections engaged: 14A, 40(a)
Outcome: Outcome not specified in source
Procedural / substantive ground: The appeal (ITA No. 1487/KOL/2026) was filed by the assessee against the order of the Addl/JCIT(A)-2, Lucknow for AY 2012-13 dated 18.03.2026. Per the source preview, the assessee had filed a return of income for AY 2012-13 on 28.09.2012 declaring total income of ₹2,66,310, and during assessment proceedings the Assessing Officer made an addition of ₹98,403 as disallowance under Section 14A read with Rule 8D; Section 40(a) was also engaged in the proceedings.

Patterns across these 12 rulings

Section 195 / TDS obligation as a threshold question for Section 40(a)(i) disallowances. Multiple cases in this set — including the International Specialty Products matter and the Jupiter Comtex matter — show that tribunals are being asked to determine whether a TDS obligation under Section 195 existed at all before any disallowance under Section 40(a)(i) can be sustained. The argument that services were rendered outside India and thus outside the chargeability net appears as a recurring assessee position.
Payee-has-paid defence under the second proviso. The Sohaney Brothers matter illustrates the continued invocation of the second proviso to Section 40(a)(ia), under which a disallowance is argued to be unsustainable where the payee has independently discharged its tax liability on the income in question; Form 26A is cited as the evidentiary instrument in this context.
Procedural inter-linkage between TDS demand orders and disallowance appeals. The International Specialty Products matter reflects a recurring procedural tension: where an appeal against a Section 201(1)/201(1A) order on the underlying TDS default is still pending before the First Appellate Authority, the connected disallowance appeal before the Tribunal may be remanded rather than decided on merits, pending resolution of the foundational TDS liability question.
Multi-year batch filings. Several matters in this set — including Victory Sales Private Limited and Delhi State Industrial & — were filed as batches covering multiple assessment years simultaneously. This pattern is consistent with the broader trend of consolidated ITAT proceedings where identical or overlapping legal issues recur across years for the same assessee.
Miscellaneous Application route under Section 254(2). The Nippon Koei matter demonstrates that Section 40(a)-related proceedings are not always resolved at the first appellate stage; an assessee may return to the Tribunal via a Miscellaneous Application seeking recall of a Tribunal order on the ground of a mistake apparent from the record, keeping the dispute live beyond the original order.

How to use this compilation

This index is a starting point for identifying ITAT orders in which Section 40(a) was engaged during August 2026. For each case listed, researchers should retrieve the full text of the judgment from indiankanoon.org or the official ITAT portal before drawing any conclusion about the ratio, the precise holding, or the sections actually decided upon. The text previews available in this index are partial; in several cases the dispositive reasoning does not appear in the preview and the outcome direction is recorded as "Outcome not specified in source."

After retrieving a full judgment, researchers should verify whether the order has been appealed further to the High Court or Supreme Court, whether any stay has been granted against the ITAT order, and whether a connected departmental appeal is pending. Tribunals frequently remand matters to the CIT(A) or AO, which means an ITAT order may not be the final word on the substantive question. Cross-reference with CBDT circulars, instructions, and any relevant Finance Act amendments applicable to the assessment year in question before treating a ruling as representative of the current legal position.

Where an ITAT ruling turns on facts specific to the assessment year, the industry, or the nature of the payment (e.g. commission to a foreign agent, salary payments, payments in a search context), researchers should be cautious about applying the reasoning to a different factual matrix without independent analysis. The compilation above covers orders across a range of benches, and no inference should be drawn that any pattern noted above reflects a uniform or settled position across all ITAT benches.

Source

All cases listed above are drawn from the TaxNoticeAI structured legal corpus (16,101 Indian tax judgments, CBIC circulars, ITAT rulings, AAR rulings, GSTAT rulings), sourced from indiankanoon.org and official court portals.

Section 40(a) Disallowance: 12 Recent ITAT Rulings (2026)