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Income Tax Appellate Tribunal, HYDERABAD ‘ B ‘ BENCH, HYDERABAD.
Before: SMT. P. MADHAVI DEVI & SHRI A. MOHAN ALANKAMONY
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘ B ‘ BENCH, HYDERABAD.
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (Through Virtual Hearing)
ITA No.235/Hyd/2020 (Asst. Year : 2015-16) M/s. GSRVPL – RVNIPL – JV, Hyderabad. ….Appellant. PAN AABAG 8487D
Vs.
Income Tax Officer, Ward 6(3), Hyderabad. …..Respondent.
Appellant By : Shri K. C.Devdas. Respondent By : Shri A.P. Babu (D.R.)
Date of Hearing : 19.07.2021. Date of Pronouncement : 26.07.2021.
O R D E R Per Smt. P. Madhavi Devi, J.M. :
This is assessee's appeal for the Assessment Year 2015-16 against
the order of Commissioner of Income Tax (Appeals)-6, Hyderabad
dt.17.10.2019.
2 ITA No.235/Hyd/2020
At the outset, it is noticed that there is a delay of 70 days in filing
of this appeal and the assessee has filed an application requesting
condonation of delay stating as under :
3 ITA No.235/Hyd/2020
4 ITA No.235/Hyd/2020
5 ITA No.235/Hyd/2020
Being satisfied with the reasons given by the assessee, we condone
the delay of 70 days and proceed to adjudicate the appeal as under.
The brief facts of the case are that the assessee is an Association
of Persons (AOP) and filed its Return of Income for Assessment Year
2015-16 on 26.09.2015 admitting NIL income. The return was initially
processed u/s.143(1) of the Income Tax Act, 1961 ('the Act').
Subsequently, it was selected for complete scrutiny through CASS for
verification of –
i) interest expenses;
ii) certificate for nil or lower rate of TDS;
iii) contract receipts/Fees Mismatch;
iv) sales turnover mismatch;
6 ITA No.235/Hyd/2020 v) low income and high loans / advance / investments;
vi) refund claim; and
vii) Tax Credit mismatch.
Accordingly, a Notice u/s.143(2) was issued to the assessee on
19.09.2016 and Notice u/s.142(1) was also issued. In response
thereto, the assessee filed details and after verification of the details,
the Assessing Officer accepted the returned income of the assessee.
Thereafter, the Assessing Officer found that the assessee had
claimed TDS of Rs.27,53,591 as refund which includes TDS of
Rs.25,33,614 on mobilization of advance of Rs.12,66,80,683 and TDS
of Rs.2,19,977 on contract receipts of Rs.1,09,98,855. He observed
that the entire TDS credit is claimed in this year in violation of
provisions of section 199 of the Income Tax Act, 1961 ('the Act') r.w.
rule 37BA(3) of I.T. Rules, 1962. Therefore, he was of the opinion that
there is a mistake apparent from record. Hence a Notice u/s. 154 of
the Act dt.20.02.2019 was issued to the assessee and thereafter, since
the assessee did not appear before the Assessing Officer, he passed
the rectification order disallowing the TDS credit claimed by the
assessee. Aggrieved by the order passed u/s. 154 of the Act, the
7 ITA No.235/Hyd/2020 assessee preferred an appeal before the CIT(A) which was dismissed
by the CIT(A). The assessee is in second appeal before the Tribunal by
raising the following grounds :-
“ 1. The order of the Learned Commissioner of Income Tax -Appeals-6, Hyderabad ['the Ld. CIT (A)] in confirming the order of the Income Tax Officer, Ward 6(3) is unsustainable both in law and on facts.
The Ld.CIT(A) failed to appreciate that the issue which is subject matter of 154 order is a debatable issue and does not constitute a mistake apparent from record. Therefore erred in confirming the demand of Rs 29,78,570 being TDS refund withdrawn under section 154 of the Act.
Without prejudice to the above grounds, the Ld.CIT (A) having rejected the Appellant's withdrawal of appeal petition ought to have provided opportunity to present its case on merits. Therefore, the order passed by the CIT(A) without providing opportunity is against principles of natural justice and bad in law.
Any other ground(s) that may be urged at the time of hearing.”
At the time of hearing, the learned counsel for the assessee filed
written submissions stating that the mobilization advance received by
the assessee has been returned / refunded in the subsequent year and
8 ITA No.235/Hyd/2020 therefore the disallowance of TDS in its entirety in the relevant
assessment year is not justified. He submitted that even with regard
to the income offered during the relevant assessment year, no TDS
credit was given by the assessee and thus sought remand of the issue
to the file of the Assessing Officer. When these facts were brought to
the knowledge of the Tribunal, we directed the learned counsel for the
assessee and also the learned DR to go through the material available
on record and come to an understanding as to the issue which needs
verification by the Assessing Officer. Accordingly both, the learned
counsel for the assessee and the learned DR of ‘A’ Bench together
have filed the Memorandum stating as under :-
“ 1. The subject appeal filed by the Appellant M/s.GSRVPL- RVNIPL-JV was heard by the Hon'ble Bench on 12.07.2021.
During the course of hearing, the Hon'ble Bench directed both the Parties to the appeal to file a joint note on eligibility of credit for TDS on advance paid by TATA - Aldesa (JV) ("Tata") under the Income Tax Act 1961.
The DR and the assesee's AR have agreed that Rule 37BA(3) is squarely applicable in this case.
It is requested that the Hon'ble Tribunal may consider setting aside the file to the AO to verify the claim of the
9 ITA No.235/Hyd/2020 assessee and give credit for TDS as per 37BA(3) considering the following points by the Assessing Officer :
a) The TDS credit should be given in the year in which the revenue receipts are offered for taxes out of the mobilization advance or any other advance received by the assessee.
b) It is also noticed that the AO has not given credit for TDS in respect of contract receipts offered during the subject AY.
c) The TDS credit given in any particular Assessment Year shall not be more than the amount calculated at applicable rate of TDS (in this particular case @ 2% for AOP/Firm and applicable Cess, if any) on revenue receipts offered in that particular Assessment Year. However, in case if the assessee has returned part of the any advance received to the payer on which TDS was already done by the payer, refund of TDS may be given in the year of such refund subjected to the examination of the evidences such as bank statements by the Assessing Officer. This TDS credit may be in addition to the TDS credit admissible on the Revenue Receipts in that particular Assessment Year.
d) It is the claim of the Appellant of that all the Mobilization advance, Material advance, Adhoc Advance received during the subject AY were recovered during subsequent AYs by Tata and part of the mobilization advance was refunded by the assessee to Tata. Further, the assessee's AR has stated that the material advance was also refunded to Tata, though the same was mistakenly represented as recoveries from RA bills in the confirmation letter given by Tata. The Departmental Representative opines that the assessee's claim need to be verified by the AO independently.
10 ITA No.235/Hyd/2020 5. In view of the above, it is requested that the Hon'ble Tribunal may consider setting aside the file to the AO to verify the claim of the assessee and give credit for TDS on the above three advances in the year when such advance is recovered from the gross contract receipts that is offered to tax or refunded back to Tata in accordance with Rule 37BA(3) of the Income Tax Rules 1962.”
Taking the above Memorandum into consideration, we deem it fit and
proper to remand the matter to the file of Assessing Officer with a
direction to verify the points mentioned in the above Memorandum
and pass the consequential order in accordance with law. Needles to
mention that the assessee shall be given a fair opportunity of hearing.
In the result, the assessee's appeal is allowed for statistical
purposes.
Order pronounced in the open court on 26th July, 2021.
Sd/- Sd/- (A. MOHAN ALANKAMONY) (SMT. P. MADHAVI DEVI) Accountant Member Judicial Member
Hyderabad, Dt.26.07.2021.
* Reddy gp
11 ITA No.235/Hyd/2020 Copy to : 1. M/s. GSRVPL – RVNIPL – JV, 103, D.No.6-3-1187, Srinivasa Towers, Begumpet, Hyderabad-500 016 2. ITO, Ward 6(3), Hyderabad. 3. Pr. C I T-6, Hyderabad. 4. CIT(Appeals)-6, Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File.
By Order Sr. Pvt. Secretary, ITAT, Hyderabad.