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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI C.N. PRASAD & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the common order dated 29.09.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2002-03 & 2003-04.
The only issue raised by the assessee in the various grounds of appeal is against the order of Ld. CIT(A) upholding the order of AO in which the AO had denied credit of tax deducted at source of Rs.14,08,733/-.
2 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) 3. The facts are that the assessee while filing the return of income claimed the credit for TDS of Rs.15,25,89,508/-. Thereafter, assessment was framed under section 143(3) in which credit in respect of TDS was granted only to the extent of Rs.11,92,15,936/- thereby short granting of TDS to the tune of Rs.3,33,73,572/-. Thereafter, the assessee filed rectification application dated 12.08.2005 under section 154 of the Act for rectification of aforesaid mistake and simultaneously filed appeal before the Ld. CIT(A) against this assessment order. The AO passed order under section 154 granting the credit of TDS of Rs.3,09,19,610/- and thus the short credit was given to the tune of Rs.24,53,962/-.
The Ld. CIT(A) in the meantime disposed of the appeal filed by the assessee and directed the AO not to recover the said TDS from the assessee by relying on the decision of Hon’ble Bombay High Court in the case of Yashpal Sahni vs. Rekha Hajarnavis, ACIT & Ors. (2007) 293 ITR 539 (Bom.) wherein the AO was directed not to recover the amount of TDS from the assessee and the Ld. CIT(A) order was not challenged by the Revenue before the Tribunal. The assessee has also filed another appeal before the Ld. CIT(A) against the rectification order passed under section 154 of the Act and the appellate authority again directed the AO not to recover the TDS from the assessee.
In the proceedings giving effect to appellate order passed by Ld. CIT(A) ,the assessee submitted that out of short credit granted of Rs.24,53,962/- the assessee had received payment from the deductor M/S MTZ Industries Ltd. amounting to Rs.2,31,465/- in lieu of TDS certificates and accordingly
3 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) requested the AO to grant credit of TDS of balance amount of Rs.22,22,497/-. The assessee also submitted that out of the said TDS amount of Rs.22,22,497/-, the assessee has already filed TDS certificates qua Rs.8,13,764/- with the Department vide letter dated 21.07.2004 and the TDS certificates in respect of Rs.14,08,735/- have not been received by the assessee. However, the AO in the order dated 12.09.2014 giving effect to Ld. CIT(A) order did not grant the credit of TDS of Rs.22,22,497/- without stating any reason. The assessee again filed appeal before the Ld. CIT(A) against the order dated 12.09.2014 which was disposed of on 29.09.2017 wherein the Ld. CIT(A) directed the AO to allow TDS credit of Rs.8,13,764/- but denied the credit in respect of that amount of Rs.14,08,733/- for which the certificate was not furnished before the AO.
After hearing both the parties and perusing the material on record, we observe that in this case the only issue is with regard to non granting of TDS credit of Rs.14,08,733/- qua which the TDS certificate could not be furnished by the assessee as the same were not given to the assessee, however, the assessee has filed the details of the of the deductors such as PAN numbers, TAN numbers who have deducted the TDS. We also observe that in the first round, the Ld. CIT(A) after following the order of Hon’ble Bombay High Court in the case of Yashpal Sahni vs. Rekha Hajarnavis, ACIT & Ors. (supra) has directed the AO not to recover the said TDS credit or to allow the TDS credit to the assessee, however, in the second round the Ld. CIT(A) denied the credit citing the reasons that the assessee has not furnished
4 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) the TDS certificates before the AO. In the present case before us this is not the case of the Department that TDS has not been deducted at source on behalf of the assessee but the only contention of the Department is that the certificate was not filed before the AO. The assessee has already filed the details of deduction of TDS along with PAN, TAN and details of deductors. Therefore, we are not in agreement with the conclusion drawn by the Ld. CIT(A) that TDS certificate has not been filed before the AO and therefore no credit could be granted. The case of the assessee is squarely covered by the decision of Hon’ble Bombay High Court in the case of Yashpal Sahni vs. Rekha Hajarnavis, ACIT & Ors. (supra) wherein it has been held that it is sufficient that tax has been deducted at source and then Revenue can not recover the TDS amount with interest from the petitioner once again. We, therefore, respectfully following the decision of the Hon’ble Bombay High Court set aside the order of Ld. CIT(A) and direct the AO to allow the credit of Rs.14,08,733/- to the assessee. In the result, the appeal of the assessee is allowed.
ITA No.7458/M/2017 7. The only issue raised by the assessee is against the order of Ld. CIT(A) in upholding the order of AO in not granting the interest under section 244A of the Act on TDS amount of Rs.1,31,76,602/- for the period from May 2007 to June 2014.
The facts in brief are that the assessee filed the return of income claiming the TDS credit of Rs.15,50,57,605/- during the year. Thereafter, the assessee vide letter dated 19.06.2014 claimed additional TDS credit of Rs.1,31,76,602/- for the year
5 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) under consideration. The said TDS came to light in the assessment year 2004-05 when it was found that TDS certificates of Rs.1,31,76,602/- were related to A.Y. 2003-04 and accordingly claimed by the assessee in the current year. In A.Y. 2004-05 the assessee claimed TDS credit of Rs.17,82,73,822/-. However, in the assessment order framed the assessee was granted a short credit of Rs.3,81,53,522/-.
In the appellate order, the Ld. CIT(A) directed the AO to grant the credit of TDS after verifying the claim of the assessee. Before the AO, the assessee submitted that out of the total TDS certificate of Rs.3,81,53,522/- certificate to the extent of Rs.15,68,714/- pertinent to A.Y. 2007-08 and balance related to the two assessment years i.e. 2003-04 & 2003-04. The TDS pertaining to A.Y. 2003-04 was Rs.1,31,76,602/-. However, while computing the interest under section 244A the aforesaid credit of Rs.1,31,76,602/- has been taken as granted only from 20.06.2014 and thus the assessee was not granted interest for the period from May 2007 to June 2014.
In the appellate proceedings before the Ld. CIT(A), the Ld. CIT(A) dismissed the issue on the ground that interest under section 244A that the interest under section 244A was not allowable to the assessee by virtue of provisions of section 244A(2) of the Act. The relevant extract of the order is as under: "5..... Apparently, the AO has invoked the provisions of sec. 244A(2) of the I.T. Act, 1961 since the claim for this amount was made by the assessee in the return of the assessment year 2004-05 and not in that for the A. Y. 2003-04. The assessee has not made any submission before me to show that the provisions of sec. 244A(2) of the I. T. Act, 1961 is not applicable to it. No fault can, therefore, be found with the order of the AO on the issue of computation of interest u/s 244A of the I. T. Act, 1961."
6 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) 11. Now the Ld. A.R. before us argued that the provisions of section 244A(ii) are not applicable to the assessee. The Ld. A.R. submitted that the additional TDS credit of Rs.1,31,76,602/- was already claimed by the assessee in the return of income for A.Y. 2004-05 based on the TDS certificate received. The Ld. A.R. submitted that there is no dispute regarding the fact that TDS deposited with the government treasury on or before 29.10.2004 being the date of filing the return of income for A.Y. 2004-05 as the TDS certificate was enclosed with the said return of income. The Ld. A.R. contended that the only dispute was with respect to the year in which the credit was to be given. The Ld. A.R. submitted that the assessee is entitled to and has claimed interest accordingly under section 244A from 01.05.2007 since the refund granted in the intimation issued under section 143(1) did not exceed 10% of the tax liability and therefore there is no question of applicability of section 244A(ii) of the Act. The Ld. A.R. in defence of his argument relied on the decision of CIT(A) vs. Larson and Turbo Ltd. (2011) 330 ITR 340 (Bombay) and National Horticulture Board vs. UOI & Ors. (2002) 253 ITR 12 P&H. Finally, the Ld. A.R. submitted that there is no dispute that assessee is eligible for interest under section 144A of the Act in respect of additional TDS credit from 01.05.2007 to 20.06.2014 since the refunds were lying with the department during the said period. Finally, the Ld. A.R. prayed before the Bench that AO may kindly be directed to re-compute the interest under section 244A of the Act.
The Ld. D.R., on the other hand, relied heavily on the order of authorities below by submitting that the assessee has made
7 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) delayed claim by filing application dated 19.06.2014 claiming the additional TDS of Rs.1,31,76,602/- and therefore the interest was rightly denied by the AO from May 2014 to June 2014.
We have heard the rival submissions of both the parties and perused the material on record and found that in this case the additional claim of the assessee of Rs.1,31,76,602/- was made before the AO by way of application dated 19.06.2014 which was wrongly claimed in the A.Y. 2004-05 and now the only issue before us is whether the said claim of the assessee is eligible for interest under section 244A of the Act or not. In the case of CIT vs. Larson and Turbo (supra) the Hon’ble Bombay High Court has held as under: "Section 244A(2) provides that in the event the proceeding resulting in refund has been delayed for reasons attributable to the assessee, the period of delay so attributable shall be excluded from the period for which the interest is payable. In the present case, section 244A(2) is clearly not attracted. The proceeding resulting in the refund was not delayed for reasons attributable to the assessee. Though the TDS Certificates were not submitted with the return and were filed during the course of the assessment proceedings, the Tribunal has noted that the tax was in fact deducted at source at the right time. In the circumstances, the Tribunal is correct in holding that since the benefit of TDS has been allowed to the assessee, interest under section 244A could not be denied only on the ground that the TDS certificates were not furnished with the return of income. Tax was deducted and deposited in the exchequer in time. Section 244A(2) is not attracted. The appeal, therefore, does not raise any substantial question of law and is dismissed." (emphasis supplied)
After respectfully following the ratio laid down by the jurisdictional High court and the facts of the case at hand , we are of the considered view that the interest is to be allowed to the assessee from 1st May, 2007 to 20th June 2014 as the funds were with the department. Accordingly the order of CIT(A) is set
8 ITA Nos.7457 & 7458/M/2017 M/s. Bajaj Holdings & Investment Ltd., (Formerly known as Bajaj Auto Ltd.) aside and AO is directed to recompute the interest as stated above. Accordingly, the appeal is allowed.
In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on 11.09.2019.
Sd/- Sd/- (C.N. Prasad) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dated: 11.09.2019. * Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [ By Order
Dy/Asstt. Registrar, ITAT, Mumbai.