Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI ABY T VARKEY & SHRI OM PRAKASH KANT
TDS credits involved in both these appeals ts involved in both these appeals, same were heard same were heard together and disposed off together and disposed off by way of this consolidated order for this consolidated order for convenience.
The Parties agreed to take up The Parties agreed to take up, firstly the appeal for AY 2021 the appeal for AY 2021- 22 for adjudication. The ground 22 for adjudication. The grounds raised in said appeal are raised in said appeal are reproduced as under: oduced as under:
On the facts and circumstances of the case: On the facts and circumstances of the case:
1. The learned CIT(A) erred in confirming the action of the 1. The learned CIT(A) erred in confirming the action of the 1. The learned CIT(A) erred in confirming the action of the Assessing officer (CPC) restricting credit for the TDS to Rs. Assessing officer (CPC) restricting credit for the TDS to Rs. Assessing officer (CPC) restricting credit for the TDS to Rs. 1,63,196 as against credit of Rs. 1,78,032 1,63,196 as against credit of Rs. 1,78,032 claimed in the claimed in the return of income in respect to rent income from property at income in respect to rent income from property at income in respect to rent income from property at Navprabhat Chambers thereby not granting credit for TDS of Navprabhat Chambers thereby not granting credit for TDS of Navprabhat Chambers thereby not granting credit for TDS of Rs. 14,836.
2. The learned CIT(A) erred in confirming the action of the 2. The learned CIT(A) erred in confirming the action of the 2. The learned CIT(A) erred in confirming the action of the Assessing officer (CPC) of not granting credit of Rs. 64,458 Assessing officer (CPC) of not granting credit of Rs. 64,458 Assessing officer (CPC) of not granting credit of Rs. 64,458 being tax deducted at source u/s 206AA in respect to deducted at source u/s 206AA in respect to deducted at source u/s 206AA in respect to dividend income from Tata Steel Ltd. dividend income from Tata Steel Ltd.
3. The learned CIT(A) erred in not appreciating that the 3. The learned CIT(A) erred in not appreciating that the 3. The learned CIT(A) erred in not appreciating that the appellant was entitled to credit of TDS as per the provisions appellant was entitled to credit of TDS as per the provisions appellant was entitled to credit of TDS as per the provisions of section 199 of the Income Tax Act, 1961. of section 199 of the Income Tax Act, 1961.
4. The learne 4. The learned CIT(A) erred in dismissing the appeal without d CIT(A) erred in dismissing the appeal without appreciating that the tax on the rent and dividend had appreciating that the tax on the rent and dividend had appreciating that the tax on the rent and dividend had already been deducted at source and that the already been deducted at source and that the already been deducted at source and that the appellant
Sanjeev Rajendra Pandit 3 & 3005/M/22 cannot be called upon to pay the tax on such income in view cannot be called upon to pay the tax on such income in view cannot be called upon to pay the tax on such income in view of the provisions of Section 205 of th of the provisions of Section 205 of the Act.
Relief Sought: Relief Sought:
Your appellant prays that: Your appellant prays that:
The learned Assessing officer be directed to grant full TDS 1. The learned Assessing officer be directed to grant full TDS 1. The learned Assessing officer be directed to grant full TDS credit of Rs. 3,93,891 as claimed by the appellant in the Rs. 3,93,891 as claimed by the appellant in the Rs. 3,93,891 as claimed by the appellant in the return.
2. Your appellant craves leave to add, to amend or delete the 2. Your appellant craves leave to add, to amend or delete the 2. Your appellant craves leave to add, to amend or delete the above ground on above ground on or before the final date of hearing. or before the final date of hearing.
The learned AO be directed not to recover the demand in The learned AO be directed not to recover the demand in The learned AO be directed not to recover the demand in respect of TDS deducted. respect of TDS deducted.
Briefly stated, facts of the case are that the assesse is an Briefly stated, facts of the case are that the assesse is an Briefly stated, facts of the case are that the assesse is an individual and filed his return of income on 28.01.2022 declaring and filed his return of income on 28.01.2022 declaring and filed his return of income on 28.01.2022 declaring total income of ₹87,26,230/ 87,26,230/-. In the return of income filed, the . In the return of income filed, the assessee claimed credit of tax deducted at source (TDS) of assessee claimed credit of tax deducted at source (TDS) of assessee claimed credit of tax deducted at source (TDS) of ₹3,93,891/- which included TDS credit of which included TDS credit of ₹1,78,032/ 1,78,032/- in respect of rental income from property at Navbharat Chambers and TDS of rental income from property at Navbharat Chambers and TDS of rental income from property at Navbharat Chambers and TDS of ₹64,458/- in respect of dividend income disbursed by M/s Tata respect of dividend income disbursed by M/s Tata respect of dividend income disbursed by M/s Tata Steel Ltd. In processing order passed u/s 143(1) of the Income-tax Steel Ltd. In processing order passed u/s 143(1) of the Income Steel Ltd. In processing order passed u/s 143(1) of the Income Act, 1961 (in short ‘the Act’) dated 28.03.2022, the Assessing Act, 1961 (in short ‘the Act’) dated 28.03.2022, the Assessing Act, 1961 (in short ‘the Act’) dated 28.03.2022, the Assessing Officer of Central Processing Centre, Bangalore restricted the TDS Officer of Central Processing Centre, Bangalore restricted the TDS Officer of Central Processing Centre, Bangalore restricted the TDS credit to ₹1,63,196/ /- in respect of TDS on rental income from in respect of TDS on rental income from property at Navbharat Chambers property at Navbharat Chambers as against credit of as against credit of ₹1,78,032/-
Sanjeev Rajendra Pandit 4 & 3005/M/22 claimed in the return of income. The Ld. Assessing Officer also did claimed in the return of income. The Ld. Assessing Officer also did claimed in the return of income. The Ld. Assessing Officer also did not allow credit of the TDS of ₹64,458/- in respect of not allow credit of the TDS of in respect of “dividend” income offered to tax under the head ‘income from other sources. income offered to tax under the head ‘income from other sources. income offered to tax under the head ‘income from other sources.
3.1 Aggrieved with the denial of credit of TDS of Aggrieved with the denial of credit of TDS of Aggrieved with the denial of credit of TDS of ₹92,792/-, the assessee filed appeal appeal before the Ld. CIT(A), however, could not before the Ld. CIT(A), however, could not succeed.
Aggrieved with the order of the Ld. CIT(A), the Aggrieved with the order of the Ld. CIT(A), the Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by way of raising grounds as reproduced appeal before the Tribunal by way of raising grounds as reproduced appeal before the Tribunal by way of raising grounds as reproduced above.
Before us, the assessee has filed intimation for payment of Before us, the assessee has filed intimation for payment of Before us, the assessee has filed intimation for payment of dividend issued by Tata Steel Ltd along with case laws relied upon dividend issued by Tata Steel Ltd along with case laws relied upon dividend issued by Tata Steel Ltd along with case laws relied upon by the assessee.
We have heard r We have heard rival submission of the parties on the issue ival submission of the parties on the issue-in- dispute and perused the relevant material on record. In the grounds dispute and perused the relevant material on record. In the grounds dispute and perused the relevant material on record. In the grounds raised
, the assessee is aggrieved with restricting of the TDS credit raised, the assessee is aggrieved with restricting of the TDS credit raised, the assessee is aggrieved with restricting of the TDS credit by the Assessing Officer/Ld. CIT(A) in respect of the income form by the Assessing Officer/Ld. CIT(A) in respect of the income form by the Assessing Officer/Ld. CIT(A) in respect of the income form house property and income from dividend. In respect of income property and income from dividend. In respect of income property and income from dividend. In respect of income from house property, the assessee has provided breakup of receipt from house property, the assessee has provided breakup of receipt from house property, the assessee has provided breakup of receipt of rental income from Navbharat Property as under: of rental income from Navbharat Property as under: Month Month of of which which the the Amount of rent received Financial yea Financial year in which rental income pertains (₹) rent is received rent is received April 20 to November
20. April 20 to November 20 12,58,056 FY 2020-21 December 20 & January December 20 & January 3,14,514 FY 2021-22 21
Sanjeev Rajendra Pandit 5 & 3005/M/22 February 21 & March 21 February 21 & March 21 3,14,514 FY 2022-23 6.1 The contention of the assessee that for the rental income The contention of the assessee that for the rental income The contention of the assessee that for the rental income of ₹3,14,515/- in respect of in respect of month of February and March month of February and March, which was received by the assessee in the month of April, 2022, the tax was received by the assessee in the month of April, 2022, received by the assessee in the month of April, 2022, deduction at source by the deductor in April 2022, which is at source by the deductor in April 2022, which is at source by the deductor in April 2022, which is reflected in subsequent year in subsequent year in Form No. 26AS for the assessment in Form No. 26AS for the assessment year 2023-24. The contention of the assessee is that though tax in 24. The contention of the assessee is that though tax in 24. The contention of the assessee is that though tax in respect of this part of rental income has been deducted and respect of this part of rental income has been deducted and respect of this part of rental income has been deducted and deposited in subsequent assessment year, d in subsequent assessment year, the assessee following he assessee following accrual system has declared the corresponding income in the year accrual system has declared the corresponding income in the year accrual system has declared the corresponding income in the year under consideration and therefore, credit of TDS to be allowed to under consideration and therefore, credit of TDS to be allowed to under consideration and therefore, credit of TDS to be allowed to the assessee the the assessee assessee against income declared against income declared in the year under against income declared in in the year under the year under consideration.
6.1.1 Similarly, Similarly, details of income from dividend has been from dividend has been provided before the Ld. CIT(A) as under: before the Ld. CIT(A) as under: Sr. No. Folio No. Folio No. Gross dividend income TDS @ 20% TDS @ 20% 1. S1S0061657 S1S0061657 ₹10,290 ₹2,058 2,058 2. S1S0036608 S1S0036608 ₹3,04,820 60,964 60,964 3. S1S0035964 S1S0035964 ₹7,180 1,436 1,436 Total 3,22,290 ₹64,458 64,458 6.2 In respect of dividend income due to non In respect of dividend income due to non-providing of PAN to roviding of PAN to the deductor, the deductor has deducted tax @ 20% u/s 206AS he deductor has deducted tax @ 20% u/s 206AS he deductor has deducted tax @ 20% u/s 206AS amounting to ₹64,458/ . The contention of the assessee is that due 64,458/-. The contention of the assessee the Assessing Officer to non-providing of the PAN in Form No. 26AS ding of the PAN in Form No. 26AS, the Assessing Officer
Sanjeev Rajendra Pandit 6 & 3005/M/22 has not allowed credit of TDS has not allowed credit of TDS, though same was deducted by the though same was deducted by the deductor M/s Tata Steel Ltd. as per the table above. deductor M/s Tata Steel Ltd. as per the table above. deductor M/s Tata Steel Ltd. as per the table above.
6.3 Before us, the Ld. Counsel of the assessee has filed a letter Before us, the Ld. Counsel of the assessee has filed a letter Before us, the Ld. Counsel of the assessee has filed a letter from the deductor M/s Tata Steel Ltd. from the deductor M/s Tata Steel Ltd. and provided details of tax provided details of tax deducted at source on the payment of deducted at source on the payment of dividend to the assessee. dividend to the assessee.
6.4 We find that the Ld. CIT(A) has We find that the Ld. CIT(A) has, on both the issues reproduced both the issues reproduced the facts of the case of the assessee as well as the relevant the facts of the case of the assessee as well as the relevant the facts of the case of the assessee as well as the relevant provisions of the Act and Income provisions of the Act and Income-tax Rules, 1962 (in short ‘the tax Rules, 1962 (in short ‘the Rules’). The relevant part of the sa Rules’). The relevant part of the same is reproduced as under: me is reproduced as under:
“5.5 Section 199 of the Income Tax Act, 1961 deals with Section 199 of the Income Tax Act, 1961 deals with Section 199 of the Income Tax Act, 1961 deals with the credit of tax deducted. As per sub section (1), if any the credit of tax deducted. As per sub section (1), if any the credit of tax deducted. As per sub section (1), if any deduction is made as per the chapter XVII and paid to the deduction is made as per the chapter XVII and paid to the deduction is made as per the chapter XVII and paid to the Central Government, same shall be considered as payment Central Government, same shall be considered as payment Central Government, same shall be considered as payment of tax on behalf of the person from whose income the of tax on behalf of the person from whose income the of tax on behalf of the person from whose income the deduction was made. Sub section (3) further explains that deduction was made. Sub section (3) further explains that deduction was made. Sub section (3) further explains that CBDT may frame Rules in facilitating credit to be given in CBDT may frame Rules in facilitating credit to be given in CBDT may frame Rules in facilitating credit to be given in respect of Tax respect of Tax deducted. CBDT has framed Rule 37BA u/s deducted. CBDT has framed Rule 37BA u/s 199(3). As per clause (4) of Ru 199(3). As per clause (4) of Rule 37BA, the credit of tax le 37BA, the credit of tax deducted and paid to the Central Government shall be deducted and paid to the Central Government shall be deducted and paid to the Central Government shall be allowed on the basis of the information relating to deduction allowed on the basis of the information relating to deduction allowed on the basis of the information relating to deduction of tax furnished by the deductor to the income of tax furnished by the deductor to the income-tax authority tax authority or the person authorised by such authority and the or the person authorised by such authority and the or the person authorised by such authority and the information in the return of income in respect of the claim for formation in the return of income in respect of the claim for formation in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk the credit, subject to verification in accordance with the risk the credit, subject to verification in accordance with the risk management strategy formulated by the Board from time to management strategy formulated by the Board from time to management strategy formulated by the Board from time to Sanjeev Rajendra Pandit 7 & 3005/M/22 time. As per section 203 of the Income Tax Act, every person time. As per section 203 of the Income Tax Act, every person time. As per section 203 of the Income Tax Act, every person deducting th deducting the tax shall issue a certificate to the effect that e tax shall issue a certificate to the effect that tax has been deducted specifying the amount of tax so tax has been deducted specifying the amount of tax so tax has been deducted specifying the amount of tax so deducted, rate at which tax has been deducted and other deducted, rate at which tax has been deducted and other deducted, rate at which tax has been deducted and other particulars that may be prescribed. Rule 31 framed under particulars that may be prescribed. Rule 31 framed under particulars that may be prescribed. Rule 31 framed under section 203, ordains that certificate section 203, ordains that certificate should be issued in should be issued in Form 16 in case of deduction u/s 192 annually or in Form Form 16 in case of deduction u/s 192 annually or in Form Form 16 in case of deduction u/s 192 annually or in Form 16A in case of deduction of tax under any other section 16A in case of deduction of tax under any other section 16A in case of deduction of tax under any other section quarterly. Thus, from above it is evident that each deductor quarterly. Thus, from above it is evident that each deductor quarterly. Thus, from above it is evident that each deductor will issue Form 16/16A to every payee individually. It is to will issue Form 16/16A to every payee individually. It is to will issue Form 16/16A to every payee individually. It is to be noted that the conclusive proof regarding deduction of e noted that the conclusive proof regarding deduction of e noted that the conclusive proof regarding deduction of tax available with the assessee is Form 16/16A. Form tax available with the assessee is Form 16/16A. Form tax available with the assessee is Form 16/16A. Form 26AS compiled by the Department is based on the data 26AS compiled by the Department is based on the data 26AS compiled by the Department is based on the data uploaded by the deductors and then reconciled with uploaded by the deductors and then reconciled with uploaded by the deductors and then reconciled with challans by the Department. in the instant challans by the Department. in the instant case, at the time case, at the time of processing ng proof of tax deduction of the impugned sum of processing ng proof of tax deduction of the impugned sum of processing ng proof of tax deduction of the impugned sum was available before the A by way of Form 16A or 26AS as was available before the A by way of Form 16A or 26AS as was available before the A by way of Form 16A or 26AS as admittedly the deduction was made in the subsequent admittedly the deduction was made in the subsequent admittedly the deduction was made in the subsequent financial year in respect of payment of rent. With resped to financial year in respect of payment of rent. With resped to financial year in respect of payment of rent. With resped to the TDS of Rs. 64,458/ of Rs. 64,458/- against dividend credit of Rs. against dividend credit of Rs. 3,22,290/- from 32,229 shares of Tata Steel Lt from 32,229 shares of Tata Steel Ltd as well the as well the appellant has not appellant has not submitted any proof of production of form submitted any proof of production of form 16A before the AO evidencing deduction of TDS. 16A before the AO evidencing deduction of TDS.”
6.5 The Ld. CIT(A) has also referred to The Ld. CIT(A) has also referred to the decision of the Hon’ble the decision of the Hon’ble Delhi High Court on the issue of allowing tax credit. The relevant Delhi High Court on the issue of allowing tax credit. The relevant Delhi High Court on the issue of allowing tax credit. The relevant part of the order of the Ld. CIT(A) is also reproduced as under: part of the order of the Ld. CIT(A) is also reproduced as under: part of the order of the Ld. CIT(A) is also reproduced as under:
Sanjeev Rajendra Pandit 8 & 3005/M/22 “5.6 It is aloes relevant to mention here another aspect of It is aloes relevant to mention here another aspect of It is aloes relevant to mention here another aspect of credit of TDS when deduction has credit of TDS when deduction has actually been made but ually been made but credit is not available to the deductee. Pursuant to the credit is not available to the deductee. Pursuant to the credit is not available to the deductee. Pursuant to the landmark judgement of Hon'ble Delhi High Court, the landmark judgement of Hon'ble Delhi High Court, the landmark judgement of Hon'ble Delhi High Court, the Central Board of Direct Taxes (CBDT) issued Instruction No. Central Board of Direct Taxes (CBDT) issued Instruction No. Central Board of Direct Taxes (CBDT) issued Instruction No. 5 dated July 8,2013 wherein vides paragraph 3 it has 5 dated July 8,2013 wherein vides paragraph 3 it has 5 dated July 8,2013 wherein vides paragraph 3 it has directed the A directed the Assessing Officers that whenever an assessee ssessing Officers that whenever an assessee approaches AOs with requisite details and particulars in approaches AOs with requisite details and particulars in approaches AOs with requisite details and particulars in the form of TDS certificate as evidence against any the form of TDS certificate as evidence against any the form of TDS certificate as evidence against any mismatched TDS amount, the said officer shall, after due mismatched TDS amount, the said officer shall, after due mismatched TDS amount, the said officer shall, after due verification, allow the credit of the same to verification, allow the credit of the same to the assessee. the assessee. The relevant paragraph is reproduced for ready reference The relevant paragraph is reproduced for ready reference The relevant paragraph is reproduced for ready reference - "3. In view of the order of the Hon'ble Delhi High Court "3. In view of the order of the Hon'ble Delhi High Court "3. In view of the order of the Hon'ble Delhi High Court (reference: paragraph 50 of the order); it has been decided (reference: paragraph 50 of the order); it has been decided (reference: paragraph 50 of the order); it has been decided by the Board that when an assessee approaches the by the Board that when an assessee approaches the by the Board that when an assessee approaches the Assessing Office Assessing Officer with requisite details and particulars in r with requisite details and particulars in the form of TDS certificate as an evidence against any the form of TDS certificate as an evidence against any the form of TDS certificate as an evidence against any mismatched amount, the said Assessing Officer will verify mismatched amount, the said Assessing Officer will verify mismatched amount, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS whether or not the deductor has made payment of the TDS whether or not the deductor has made payment of the TDS in the Government Account and if the paymen in the Government Account and if the payment has been t has been made, credit of the same should be given to the assessee. made, credit of the same should be given to the assessee. made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and However, the Assessing Officer is at liberty to ascertain and However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the verify the true and correct position about the TDS with the verify the true and correct position about the TDS with the relevant AO (TDS). relevant AO (TDS). The AO may also, if deemed necessary, The AO may also, if deemed necessary, issue a notice to the deductor to compel him to file correction notice to the deductor to compel him to file correction notice to the deductor to compel him to file correction statement as per the procedure laid down." The appellant's statement as per the procedure laid down." The appellant's statement as per the procedure laid down." The appellant's case in present appeal qua rental payment is not concerned case in present appeal qua rental payment is not concerned case in present appeal qua rental payment is not concerned with the subject matter of the circular as the former is about with the subject matter of the circular as the former is about with the subject matter of the circular as the former is about
Sanjeev Rajendra Pandit 9 & 3005/M/22 seeking credit wher seeking credit where tax was to be deducted subsequently. e tax was to be deducted subsequently. As far as TDS on dividend already deducted but not finding As far as TDS on dividend already deducted but not finding As far as TDS on dividend already deducted but not finding mention in 26AS due to lack of PAN data, the appellant has mention in 26AS due to lack of PAN data, the appellant has mention in 26AS due to lack of PAN data, the appellant has all the liberty to make good use of the circular by providing all the liberty to make good use of the circular by providing all the liberty to make good use of the circular by providing requisite details of TDS certificate requisite details of TDS certificate in form 16A before the AO in form 16A before the AO to claim credit of the correct amount of TDS. to claim credit of the correct amount of TDS.”
6.6 After referring the provisions of the law as well as judicial After referring the provisions of the law as well as judicial After referring the provisions of the law as well as judicial precedent on the issue, the Ld. CIT(A) concluded that for claiming precedent on the issue, the Ld. CIT(A) concluded that for claiming precedent on the issue, the Ld. CIT(A) concluded that for claiming to comply, firstly, the benefit of the TDS, the assessee was required the benefit of the TDS, the assessee was required to comply certificate, secondly, to show that income subjected produce TDS certificate, , to show that income subjected to TDS is disclosed in return of income of the assessment year a in return of income of the assessment year a in return of income of the assessment year as assessable. The relevant finding of the Ld. CIT(A) is reproduced as assessable. The relevant finding of the Ld. CIT(A) is reproduced as assessable. The relevant finding of the Ld. CIT(A) is reproduced as under:
“5.7 The deduction of tax at source does not necessarily, or 5.7 The deduction of tax at source does not necessarily, or 5.7 The deduction of tax at source does not necessarily, or is not required to, match alongside the corresponding is not required to, match alongside the corresponding is not required to, match alongside the corresponding income, recognition of which by the recipient could be either income, recognition of which by the recipient could be either income, recognition of which by the recipient could be either on accrual or on receipt basis. The accrual of the tax liability on accrual or on receipt basis. The accrual of the tax liability on accrual or on receipt basis. The accrual of the tax liability on income would on income would arise only on the same being/becoming arise only on the same being/becoming assessable. There is thus an inherent mismatch, in terms of assessable. There is thus an inherent mismatch, in terms of assessable. There is thus an inherent mismatch, in terms of time, between the payment of tax (per TDS) and the accrual time, between the payment of tax (per TDS) and the accrual time, between the payment of tax (per TDS) and the accrual of tax liability against the corresponding income qua the of tax liability against the corresponding income qua the of tax liability against the corresponding income qua the relevant provisions of law. It is in vie relevant provisions of law. It is in view of and to address w of and to address this mismatch in time, so that the tax stands deducted this mismatch in time, so that the tax stands deducted this mismatch in time, so that the tax stands deducted while the corresponding income, though accrued has yet to while the corresponding income, though accrued has yet to while the corresponding income, though accrued has yet to be received or though received, as by way of an advance, is be received or though received, as by way of an advance, is be received or though received, as by way of an advance, is yet to accrue, that the law yet to accrue, that the law-per section 199 r/w ss. 190 & per section 199 r/w ss. 190 &
Sanjeev Rajendra Pandit 10 & 3005/M/22 191 and Rule 37BA] clarifies that the credit for the TDS nd Rule 37BA] clarifies that the credit for the TDS nd Rule 37BA] clarifies that the credit for the TDS shall be available for the year for which the corresponding shall be available for the year for which the corresponding shall be available for the year for which the corresponding income is assessable. It wold be evident from plain reading income is assessable. It wold be evident from plain reading income is assessable. It wold be evident from plain reading of section 199 of the Act and Rule 37BA of Income Tax of section 199 of the Act and Rule 37BA of Income Tax of section 199 of the Act and Rule 37BA of Income Tax rules, 1962 that credit is to rules, 1962 that credit is to be given to the assessee for the be given to the assessee for the amount so deducted in the assessment made under this Act amount so deducted in the assessment made under this Act amount so deducted in the assessment made under this Act for the assessment year for which Such income is for the assessment year for which Such income is for the assessment year for which Such income is assessable. So important conditions for getting benefit of assessable. So important conditions for getting benefit of assessable. So important conditions for getting benefit of TDS as per section 199 of the Act are TDS as per section 199 of the Act are (a) the assessee sh (a) the assessee should produce the certificate for the ould produce the certificate for the amount of tax deducted at source amount of tax deducted at source; (b) show that income subjected to TDS is disclosed in the (b) show that income subjected to TDS is disclosed in the (b) show that income subjected to TDS is disclosed in the return of the assessment year as 'assessable'. return of the assessment year as 'assessable'.
Thus, both the above Thus, both the above-mentioned conditions are to be mentioned conditions are to be satisfied. It is, therefore, satisfied. It is, therefore, clear that the assessee will not be clear that the assessee will not be entitled to have benefit or credit for the amount though entitled to have benefit or credit for the amount though entitled to have benefit or credit for the amount though mentioned in the certificate for the assessment year if mentioned in the certificate for the assessment year if mentioned in the certificate for the assessment year if income relatable to the amount is not shown and is not income relatable to the amount is not shown and is not income relatable to the amount is not shown and is not assessable in that assessment year. If instead of e assessable in that assessment year. If instead of e assessable in that assessment year. If instead of entire income referable to amount of tax deducted, only a portion income referable to amount of tax deducted, only a portion income referable to amount of tax deducted, only a portion of income is found assessable the benefit has to be allowed of income is found assessable the benefit has to be allowed of income is found assessable the benefit has to be allowed only on the portion shown. If balance income, on account of only on the portion shown. If balance income, on account of only on the portion shown. If balance income, on account of system of accounting followed by the assessee or for some system of accounting followed by the assessee or for some system of accounting followed by the assessee or for some other reason other reason is found to be assessable in future, then the is found to be assessable in future, then the credit for the balance TDS can be allowed only in future credit for the balance TDS can be allowed only in future credit for the balance TDS can be allowed only in future when income is assessable. Credit allowed on pro rata when income is assessable. Credit allowed on pro rata when income is assessable. Credit allowed on pro rata basis in the year in which the certificate is issued and also basis in the year in which the certificate is issued and also basis in the year in which the certificate is issued and also Sanjeev Rajendra Pandit 11 & 3005/M/22 in future where balance or in future where balance or such income is found to be e is found to be assessable is as per the mandate of provision of section assessable is as per the mandate of provision of section assessable is as per the mandate of provision of section 199 of the Act. Any amount which has not been assessed in 199 of the Act. Any amount which has not been assessed in 199 of the Act. Any amount which has not been assessed in any year but referred in the TDS certificate, cannot be any year but referred in the TDS certificate, cannot be any year but referred in the TDS certificate, cannot be claimed under section 199 of the Act. claimed under section 199 of the Act.
5.8 Section 199 of the Act has 5.8 Section 199 of the Act has two objectives two objectives - one to declare the TDS as payment of tax on behalf of the person declare the TDS as payment of tax on behalf of the person declare the TDS as payment of tax on behalf of the person on whose behalf the deduction was made and to give credit on whose behalf the deduction was made and to give credit on whose behalf the deduction was made and to give credit for the amount so deducted on the production of the for the amount so deducted on the production of the for the amount so deducted on the production of the certificate in the assessment made for the assessment year certificate in the assessment made for the assessment year certificate in the assessment made for the assessment year for which such income is assessable. The second objective which such income is assessable. The second objective which such income is assessable. The second objective mentioned in section 199 is only to answer the question as mentioned in section 199 is only to answer the question as mentioned in section 199 is only to answer the question as to the year in which the credit for TDS shall be given. It to the year in which the credit for TDS shall be given. It to the year in which the credit for TDS shall be given. It links up the credit with assessment year in which such links up the credit with assessment year in which such links up the credit with assessment year in which such income is assessable. In othe income is assessable. In other words, the Assessing Officer r words, the Assessing Officer is bound to give credit in the year in which the income is is bound to give credit in the year in which the income is is bound to give credit in the year in which the income is offered to tax. This section 199 does not empower the offered to tax. This section 199 does not empower the offered to tax. This section 199 does not empower the Assessing Officer to determine the year of assessability of Assessing Officer to determine the year of assessability of Assessing Officer to determine the year of assessability of the income itself but it only mandates the year in w the income itself but it only mandates the year in w the income itself but it only mandates the year in which the credit is to be given on the basis of the certificate furnished. credit is to be given on the basis of the certificate furnished. credit is to be given on the basis of the certificate furnished. In other words, when the assessee produces the certificates In other words, when the assessee produces the certificates In other words, when the assessee produces the certificates of TDS, the Assessing Officer is req DS, the Assessing Officer is required to verify whether uired to verify whether the assessee has offered the income pertained to the the assessee has offered the income pertained to the the assessee has offered the income pertained to the certificate before giving credit. If he finds that the income of te before giving credit. If he finds that the income of te before giving credit. If he finds that the income of the certificate is not shown, the Assessing Officer has not the certificate is not shown, the Assessing Officer has not the certificate is not shown, the Assessing Officer has not only to give the credit for TDS in that assessment year and only to give the credit for TDS in that assessment year and only to give the credit for TDS in that assessment year and has to defer the credit being given to the year in which the has to defer the credit being given to the year in which the has to defer the credit being given to the year in which the income to be assess to be assessed. It does not have any mandate to ed. It does not have any mandate to Sanjeev Rajendra Pandit 12 & 3005/M/22 allow credit even where TDS is not deducted but to be allow credit even where TDS is not deducted but to be allow credit even where TDS is not deducted but to be deducted in future. deducted in future.” 6.7 We find that though the Ld. CIT(A) has referred to the We find that though the Ld. CIT(A) has referred to the We find that though the Ld. CIT(A) has referred to the provisions of the law and Rules thereon, however, he did not provisions of the law and Rules thereon, however, he did not provisions of the law and Rules thereon, however, he did not considered the request of considered the request of the assessee for allowing credit that the assessee for allowing credit that either in the year under consideration or in the subsequent assessment in the year under consideration or in the subsequent assessment in the year under consideration or in the subsequent assessment year. We are of the opinion that the deductor has been authorized year. We are of the opinion that the deductor has been authorized year. We are of the opinion that the deductor has been authorized by the Department to deduct tax at source on the income of the by the Department to deduct tax at source on the income of the by the Department to deduct tax at source on the income of the assessee and deposit assessee and deposit into Government account. The credit of same . The credit of same has to be allowed to to the assessee as per the provisions of the law the assessee as per the provisions of the law and the Rules made thereunder and the Department cannot simply and the Rules made thereunder and the Department cannot simply and the Rules made thereunder and the Department cannot simply deny that no credit shall be granted because in the year in which deny that no credit shall be granted because in the year in which deny that no credit shall be granted because in the year in which assessee offered income assessee offered income, tax has not been deducted and not tax has not been deducted and not appearing Form No. 26AS appearing Form No. 26AS, whereas in subsequent assessment year whereas in subsequent assessment year TDS is appearing in Form No. 26AS TDS is appearing in Form No. 26AS, but corresponding income is but corresponding income is not reflecting there. The Department cannot not reflecting there. The Department cannot swallow swallow tax paid by the assessee and deny credit credit of tax deducted, which pertains to the of tax deducted, which pertains to the assessee. In the instant case, the assessee has offered the income . In the instant case, the assessee has offered the income . In the instant case, the assessee has offered the income following the accrual system following the accrual system. As far as rental income is concerned as rental income is concerned, if tax has been deducted and deposited in subsequent year, the if tax has been deducted and deposited in subsequent year, the if tax has been deducted and deposited in subsequent year, the assessee should be assessee should be allowed credit of same in the year under in the year under consideration of tax which has been deducted subsequently. consideration of tax which has been deducted subsequent consideration of tax which has been deducted subsequent However, the assessee However, the assessee could not be allowed the benefit of the interest d the benefit of the interest on refund which arise if any on account of credit of tax which arise if any on account of credit of tax which arise if any on account of credit of tax deducted
Sanjeev Rajendra Pandit 13 & 3005/M/22 and deposit in the sub and deposit in the subsequent assessment year. We accordingly set We accordingly set aside the finding of the Ld. CIT(A) on the issue aside the finding of the Ld. CIT(A) on the issue-in-dispute and direct dispute and direct the Ld. Assessing Officer to verify the amount of tax deducted and the Ld. Assessing Officer to verify the amount of tax deducted and the Ld. Assessing Officer to verify the amount of tax deducted and deposited in respect of income from rental property which has been deposited in respect of income from rental property which has been deposited in respect of income from rental property which has been shown by the assessee in the year under consideration and allow y the assessee in the year under consideration and allow y the assessee in the year under consideration and allow the credit as directed above. As far as TDS credit in respect of the credit as directed above. As far as TDS credit in respect of the credit as directed above. As far as TDS credit in respect of divided income is concerned the assessee is directed to furnish TDS divided income is concerned the assessee is directed to furnish TDS divided income is concerned the assessee is directed to furnish TDS certificate issued by the deductor and the Ld. Assessing Officer is certificate issued by the deductor and the Ld. Assessing Officer i certificate issued by the deductor and the Ld. Assessing Officer i directed to allow the credit of the said TDS after due verification. directed to allow the credit of the said TDS after due verification directed to allow the credit of the said TDS after due verification The Assessing Officer cannot simply decline g Officer cannot simply decline the credit of TDS the credit of TDS and he is bound to verify TDS certificate issue in accordance with he is bound to verify TDS certificate issue in accordance with he is bound to verify TDS certificate issue in accordance with provisions of law. Further, the Assessing Officer is also directed to provisions of law. Further, the Assessing Officer is provisions of law. Further, the Assessing Officer is verify if any relief has already been gran verify if any relief has already been granted in the rectification ted in the rectification application filed by the assessee application filed by the assessee. If so then further benefit of TDS . If so then further benefit of TDS credit may not be allowed credit may not be allowed. In view of the our direction our direction above, the grounds of appeal of the assessee a grounds of appeal of the assessee are accordingly allowed for re accordingly allowed for statistical purposes.
7. The grounds raised by the assessee in assessment year 2020 The grounds raised by the assessee in assessment year 2020 The grounds raised by the assessee in assessment year 2020- 21 in is reproduced as under: 21 in ITA No. 3004 is reproduced as under:
On the facts and circumstances of the case : On the facts and circumstances of the case :
1. The learned CIT(A) erred in confirming the action of The learned CIT(A) erred in confirming the action of the The learned CIT(A) erred in confirming the action of Assessing officer (CPC) restricting credit for the TDS to Rs. Assessing officer (CPC) restricting credit for the TDS to Rs. Assessing officer (CPC) restricting credit for the TDS to Rs. 2,83,928 as against credit of Rs. 3,13,600 2,83,928 as against credit of Rs. 3,13,600 claimed in the claimed in the Sanjeev Rajendra Pandit 14 & 3005/M/22 return of income in respect to rent income from property at return of income in respect to rent income from property at return of income in respect to rent income from property at Navprabhat Chambers thereby not granting credit for TDS Navprabhat Chambers thereby not granting credit for TDS Navprabhat Chambers thereby not granting credit for TDS of Rs. 29,672. of Rs. 29,672.
2. The learned CIT(A) erred in not appreciating that the The learned CIT(A) erred in not appreciating that the The learned CIT(A) erred in not appreciating that the appellant was entitled to credit of TDS as per the provisions appellant was entitled to credit of TDS as per the provisions appellant was entitled to credit of TDS as per the provisions of section 199 of the Income Tax Act, 1961. of section 199 of the Income Tax Act, 1961.
Relief Sought: Relief Sought:
Your appellant prays that: Your appellant prays that:
The learned Assessing officer be directed to grant The learned Assessing officer be directed to grant The learned Assessing officer be directed to grant full TDS credit of Rs. 3,13,600 as claimed by the appellant in the credit of Rs. 3,13,600 as claimed by the appellant in the credit of Rs. 3,13,600 as claimed by the appellant in the return.
Your appellant craves leave to add, to amend or delete the Your appellant craves leave to add, to amend or delete the Your appellant craves leave to add, to amend or delete the above ground on or before the final date of hearing. above ground on or before the final date of hearing. above ground on or before the final date of hearing.
The learned AO be directed not to recover the demand in The learned AO be directed not to recover the demand in The learned AO be directed not to recover the demand in respect of TD respect of TDS deducted.
We find that issue involved in ground No.1 is identical to TDS We find that issue involved in ground No.1 is identical to TDS We find that issue involved in ground No.1 is identical to TDS credit in respect of rental property which we have adjudicated in credit in respect of rental property which we have adjudicated in credit in respect of rental property which we have adjudicated in assessment year 2021 assessment year 2021-22. Therefore, following our finding in 22. Therefore, following our finding in assessment year 2021 assessment year 2021-22 this ground of the appeal i 22 this ground of the appeal is also restored to the file of the Assessing Office for deciding after due verification to the file of the Assessing Office for deciding after due verification to the file of the Assessing Office for deciding after due verification and allow the credit accordingly. The grounds raised by the and allow the credit accordingly. The grounds raised by the and allow the credit accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes.
Sanjeev Rajendra Pandit 15 & 3005/M/22
In the result, both these appeals are allowed In the result, both these appeals are allowed In the result, both these appeals are allowed for statistical purposes.
Order pronounced in the open Court/under Rule 34(4) of Order pronounced in the open Court/under Rule 34(4) of Order pronounced in the open Court/under Rule 34(4) of the ITAT Rules, 1963 on the ITAT Rules, 1963 on 24/01/2023. Sd/- Sd/- - (ABY T VARKEY ABY T VARKEY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 24/01/2023 Rahul Sharma, Sr. P.S.