J AND J ASSOCIATES vs. THE INCOME TAX OFFICER

WP(C)/26869/2022HC KeralaKLHC01056828202222 August 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages

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What did the High Court hold?

The High Court disposed of the writ petition by directing that upon a proper application being made by the petitioner, the Income Tax department will provide a link for uploading the necessary documents to facilitate the transfer of TDS credit from the managing partner to the firm's account. This is subject to the petitioner complying with all procedural formalities as per Rule 37BA(2) of the Income Tax Rules. The Court also ordered that any proceedings initiated against the petitioner for recovery of amounts due under the order of assessment (Ext.P1) shall be kept in abeyance for a period of two months to allow the petitioner to avail the option under Rule 37BA(2). The Court did not decide on the merits of the assessment itself but facilitated the procedural step for TDS credit transfer.

What were the facts?

The petitioner, J and J Associates, is a firm aggrieved by the fact that Tax Deducted at Source (TDS) made in the name of its managing partner, Mr. V.K. Viju, has not been credited to the firm's account. The petitioner explains that some works were initially executed in the managing partner's name, and the government department that made payments deducted TDS and remitted it to the managing partner's credit. The Income Tax Officer (Ward - 2(1), Kochi) and the Assistant Commissioner of Income Tax (Circle -2(2), Kochi) are the respondents. The assessment year(s) are not explicitly stated. The order under challenge is an order of assessment (Ext.P1) for recovery of amounts due.

What were the issues?

1. Whether the petitioner can seek transfer of TDS credit from the managing partner's account to the firm's account, and if so, what is the procedure? (Question of law and fact, concerning the Income Tax Rules). Assessee's contention: The petitioner seeks to have the TDS credit transferred to the firm's account. They rely on the possibility of such a transfer. Revenue's contention: The learned Standing Counsel for the department pointed out Rule 37BA of the Income Tax Rules, stating that credit can be transferred if the procedure contemplated in sub-rule (2) of Rule 37BA is complied with. They further submitted that on request, a link can be provided for enabling compliance with this procedure.

Which sections of the Income-tax Act were involved?

Rule 37BA

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

W.P(C) .26869/22 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 22ND DAY OF AUGUST 2022 / 31ST SRAVANA, 1944 WP(C) NO. 26869 OF 2022 PETITIONER/S: J AND J ASSOCIATES VANACHIRAKKAL HOUSE, THENGODE P.O, ERNAKULAM, REPRESENTED BY ITS MANAGING PARTNER, PIN - 682021 BY ADV M.S.AMAL DHARSAN RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD - 2(1), KOCHI, PIN - 682016 2 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE -2(2), KOCHI, PIN – 682016 SRI. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) .26869/22 2

JUDGMENT Petitioner is aggrieved by the fact that certain TDS deducted in the name of the managing partner of the petitioner firm has not been given credit to in the name of the firm. It is submitted that initially, some of the works undertaken by the petitioner firm were executed in the name of the managing partner Mr.V.K. Viju and while making payments, the Government department, for which the work was done, had deducted tax and paid it to the credit of the managing partner.

When this matter is taken up for consideration today, the learned Standing Counsel for the department points out the provisions of Rule 37BA of the Income Tax Rules and states that on the procedure contemplated therein in sub-rule (2) of Rule 37BA being complied with, the credit can be transferred. He submits that on a request being made, a link can be provided for enabling compliance with the procedure contemplated by sub-rule(2) of Rule 37BA of the Income Tax Rules.

Taking note of the above submission, this writ petition will stand disposed of directing that on a proper application being made, the Income Tax department will provide a link for uploading the documents necessary for transfer of credit of TDS from the managing partner of the petitioner firm to the account of the firm, subject to compliance with all procedural formalities. Proceedings, if any, initiated against the petitioner for recovery of amounts due under Ext.P1 order of assessment shall be kept in abeyance for a period of two

W.P(C) .26869/22 3 months to enable the petitioner to avail the option under Rule 37BA(2) of the Income Tax Rules. The writ petition is disposed of as above. GOPINATH P. JUDGE okb/ //// P.S. to Judge

W.P(C) .26869/22 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 26869/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ITR V FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2007-08 Exhibit P2 TRUE COPY OF THE ITR V FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2010-11 Exhibit P3 TRUE COPY OF THE ITR V FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2011-12 Exhibit P4 TRUE COPY OF THE ITR V FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2013-14 Exhibit P5 TRUE COPY OF THE ITR V FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2015-16 Exhibit P6 TRUE COPY OF THE JUDGMENT DATED 01/07/2022 IN WPC 6806/2022 Exhibit P7 TRUE COPY OF THE REPRESENTATION DATED 01/08/2022 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT

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