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Facts
The assessee company omitted to claim TDS credit of Rs.11,62,136/- and Rs.37,97,437/- for AY 2017-18 and 2018-19 respectively in their income returns. The Assessing Officer rejected rectification petitions filed by the assessee to claim these TDS credits. The assessee then filed appeals before the Ld CIT(A), which were also dismissed.
Held
The Tribunal noted that the assessee filed rectification petitions beyond the two-year time limit prescribed under Section 155(14) of the Act. However, considering the COVID-19 pandemic and the extension of statutory time limits by the Supreme Court, the Tribunal decided to treat the petitions as filed within the permissible time.
Key Issues
Whether the assessee is entitled to claim TDS credit when the claim was made beyond the prescribed time limit, considering the COVID-19 pandemic extensions.
Sections Cited
Sec. 155(14), Sec. 199, Rule 37BA, Sec. 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “G” Bench, Mumbai.
Before: Shri B.R. Baskaran (AM) & Shri Sandeep Singh Karhail (JM)
Per B.R. Baskaran (AM) :-
Both the appeals filed by the assessee are directed against the orders passed by Ld CIT(A), NFAC, Delhi and they relate to the assessment years 2017-18 and 2018-19. The only grievance of the assessee in both these appeals relate to rejection of claim for deduction of TDS amount deducted from the income of the assessee.
We heard the parties and perused the record. The assessee company is engaged in the business of sale and service of motor vehicles and spare parts. In the returns of income, the assessee omitted to claim TDS credit of Rs.11,62,136/- and Rs.37,97,437/- respectively in AY 2017-18 and 2018-19. In the original assessment orders, above TDS credits were not allowed. Hence the assessee moved rectification petitions in both the years, but the AO rejected them. Aggrieved, the assessee filed appeals before Ld CIT(A) for
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both the years, but could not succeed. Hence the assessee has filed these appeals.
It is the submission of the assessee that the TDS amounts are shown in Form 26AS, but the same was not allowed credit, only for the reason that the assessee did not claim it in the return of income filed for both the years under consideration. It was submitted that the relevant TDS certificates were received by the assessee subsequently. Accordingly, it was submitted that the TDS amount represents the tax paid on behalf of the assessee and the same should be directed to be allowed credit against tax due from the assessee.
We notice that the assessment of AY 2017-18 was completed u/s 143(3) of the Act on 30-12-2019. The return of income filed for AY 2018-19 was processed u/s 143(1) of the Act on 02-10-2019. We notice that the provisions of Sec.155(14) of the Act provides time limit for making amendments for allowing TDS credit. Under sec.155(14) of the Act, the assessee can claim further credit of TDS within two years from the end of the assessment year in which such income is assessable on production of TDS certificates. Further, it is provided that the assessee should have disclosed the relevant income. We notice that the assessee filed rectification petitions u/s 154 of the Act 12-04-2022/22-04-2022 only in both the years, i.e., beyond the period of two years prescribed in sec.155(14) of the Act. The AO rejected the claim of the assessee on the reasoning that the additional claim was not made by filing revised returns of income. In the appellate proceedings, the Ld CIT(A) held that the claim for TDS credit was made in both the years beyond the time limit prescribed u/s 155(14) of the Act and accordingly rejected the appeals of the assessee in both the years.
We notice that the provisions of sec.199 of the Income tax Act and Rule 37BA of the Income tax Rules govern the procedure of giving credit of tax
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deducted at source. Under sec.199 of the Act, any deduction made in accordance with the TDS provisions and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. Under Rule 37BA of the Income tax Rules, the TDS credit shall be given on the basis of information relating to deduction of tax furnished by the deductor to the income tax authority. From the reading of sec.199 of the Act and Rule 37BA of the Income tax Rules it follows that, if the deductor of tax has reported the deduction of tax at source from the income of the assessee and further, if the assessee had declared the relevant income in its computation of total income, thenthe TDS credit has to be given to the assessee.
We noticed that section 155(14) of the Act has prescribed a procedure and time limit for making the claim. The time limit is two years from the end of the assessment year for making further claim of TDS credit on the basis of TDS certificates. We notice that the provisions of sec.155(14) was introduced by Finance Act, 2002 w.e.f. 1.6.2002, when the system of granting TDS credit on the strength of TDS certificates was in vogue. Thereafter, the Income tax Act has introduced Form 26AS from 30.3.2005 and it was substituted w.e.f 1.6.2020. Under the present scenario, all the details relating to TDS, Advance tax and other tax payments are duly reflected in Form 26AS.Under the present scenario, there should not be a problem for the assessing officer in granting TDS credit on the basis of Annual Information received by him.
Be that as it may, as per the provisions of sec.155(14) of the Act, the time limit for seeking amendment would expire on 31.3.2020 and 31-3-2021 respective for assessment years 2017-18 and 2018-19. Before the expiry of time limit for AY 2017-18 and 2018-19, Covid-19 pandemic has started. The Hon’ble Supreme Court in its Suo motu petition has extended the statutory time limits from time to time. In its final order reported in 441 ITR 722 (SC), the Hon’ble Supreme Court prescribed time limits in paragraph 5 of its order,
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as per which the limitation period of 90 days was prescribed from 1.3.2022. In the instant cases, the assessee has filed petitions on 12.4.2022/22-04- 2022. Though the assessee has filed petitions u/s 154 of the Act, since the said petitions seek to amend the intimation/assessment order, they should be construed as having been filed u/s 155(14) of the Act. Accordingly, the petitions filed for both the years should be construed as having been filed within the time limit prescribed in sec.155(14) of the Act.
Accordingly, we set aside the orders passed by Ld CIT(A) in both the years under consideration and restore this issue to the file of the AO with the direction to process the applications filed by the assessee afresh in accordance with sec. 155(14) of the Act, treating rectification petitions filed by the assessee as the petition filed u/s 155(14) of the Act within the prescribed time.
In the result, both the appeals of the assessee are treated as allowed for statistical purposes.
Order pronounced in the open court on 28th May, 2024.
Sd/- Sd/- (Sandeep Singh Karhail) (B.R. Baskaran) Judicial Member Judicial Member Mumbai.; Dated : 28/05/2024 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai. 6. Guard File. BY ORDER, //True Copy//
(Assistant Registrar) PS ITAT, Mumbai