J&J ASSOCIATES, vs. THE INCOME TAX OFFICER,

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WP(C)/6806/2022HC KeralaKLHC01014707202201 July 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
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What did the High Court hold?

The High Court of Kerala disposed of the writ petition. The Court took note of the department's submission regarding Rule 37BA(2) of the Income Tax Rules. The Court directed that upon a proper application being made by the petitioner, the Income Tax department would 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 transfer is subject to the petitioner complying with all procedural formalities as per Rule 37BA(2). Additionally, any proceedings initiated against the petitioner for the recovery of amounts due under an assessment order (Ext.P1) were to be kept in abeyance for a period of two months. This period is intended to allow the petitioner to avail the option under Rule 37BA(2). The Court did not explicitly leave any issue undecided.

What were the facts?

The petitioner, M/s. &J Associates, a firm represented by its Managing Partner, filed a writ petition before the High Court of Kerala. The petitioner was aggrieved because Tax Deducted at Source (TDS) that was deducted in the name of its managing partner, Mr. V.K. Viju, had not been credited to the firm's account. The petitioner explained 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 assessment year(s) are not explicitly stated. The order under challenge is not a specific assessment order but rather the grievance of the petitioner regarding the non-transfer of TDS credit. The procedural history involves the filing of this writ petition.

What were the issues?

1. Whether the Income Tax Department can facilitate the transfer of TDS credit from the managing partner to the firm's account, given that the TDS was initially deducted in the partner's name for works executed by the firm. Assessee's contention: The petitioner firm seeks a mechanism to transfer the TDS credit. The works were executed by the firm, and the deduction was made in the managing partner's name. They are seeking a procedural remedy to rectify this situation. Revenue's contention: The learned Standing Counsel for the department referred to Rule 37BA of the Income Tax Rules, specifically sub-rule (2), which outlines the procedure for transferring TDS credit. The department indicated that on compliance with the procedure contemplated therein, the credit can be transferred. They further stated that a link can be provided for enabling compliance with Rule 37BA(2) upon a request being made.

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). 6806/22 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 1ST DAY OF JULY 2022 / 10TH ASHADHA, 1944 WP(C) NO. 6806 OF 2022 PETITIONER/S: M/S.&J ASSOCIATES, VANACHIRAKKAL HOUSE, THENGODE P.O., ERNAKULAM-682021, REPRESENTED BY ITS MANAGING PARTNER. BY ADV M.S.AMAL DHARSAN RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD 2(1), KOCHI-682016. 2 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(2), KOCHI-682016. OTHER PRESENT: SRI. CHRISTOPHER ABARAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C). 6806/22 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.

2.

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.

3.

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 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/1.7.22 //// P.S. to Judge

Appendix — schedule of exhibits
APPENDIX OF WP(C) 6806/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 21/02/2011 FOR THE ASSESSMENT YEAR 2009-10. Exhibit P2 TRUE COPY OF THE RECTIFICATION APPLICATION DATED 16/08/2011 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. Exhibit P3 TRUE COPY OF THE REMINDER LETTER DATED 28/12/2021 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT. Exhibit P4 TRUE COPY OF THE INTERIM ORDER DATED 01/11/2021 IN WPC NO.2442/2019.

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