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Before: SHRI J. SUDHAKAR REDDY & SMT SUCHITRA KAMBLE
These appeals are filed by the assessee against the order dated 22/3/2013 passed by CIT(A)-XXVI, New Delhi.
The grounds of appeal
s are as under:
1. That the consolidated order dated 26/12/2013 passed by the Ld.CIT(A)-XXVI, New Delhi, for Assessment Year 2006-07 to 2009-10 & 2011-12 is contrary to the facts and bad in law.
2. That the Ld. CIT(A) was not justified and erred on facts and circumstances of the case and in law in not allowing credit of TDS of Rs. 12,30,650/- for A.Y. 2006-07 in spite of the fact that the corresponding income was duly included in the Taxable Income of that Assessment Year.
3. That the Ld. CIT(A) was not justified and erred on facts and circumstances of the case and in law in holding that the decision of the Hon’ble Supreme Court in the case of Goetz (India) Ltd. is not applicable in the case of the Appellant by drawing erroneous inference that the said decision is applicable for fresh claim of any expense and not in the case of claim of TDS/TCS and thereby not allowing credit of TDS of Rs. 12,30,650/- for A.Y. 2006-07 to the appellant.
4. That the Ld. CIT(A) was not justified and erred on facts and circumstances of the case and in law in confirming the action of the A.O. rejecting the claim of tax credit u/s 154 by holding that there is no prima-facie mistake crept in the assessment order stating that it is beyond the purview of section 154(1) and 154(1 A). The Ld. CIT(A) fell in error and was not justified on facts and circumstances of the case and in law in holding that even in view of the provisions of section 199(3) and rule 37BA (3) the appellant has failed to demonstrate before it the corresponding income relevant to the TDS/TCS has been offered for tax in respective AYs.
5. That the Ld. CIT(A) was not justified and erred on facts and circumstances of the case and in law in holding that the provisions of section 155(14) are not applicable in appellant’s case.”
3. The assessee failed to claim TDS in the original returns of income in the Assessment Years 2006-07, 2007-08, 2008-09 and 2009-10 during relevant time. Thereafter, the assessee filed applications u/s 154 of the Income-tax Act 1961 (in short ‘the Act’) for allowing credit of TDS & TCS as the case may be in the said Assessment Years. The Assessing Officer after placing reliance on the decision of Goetz (India) Ltd. vs. CIT 2006 156 Taxman 1 (SC), rejected the claim holding that no fresh claim can be made other than to the valid revised return of income. The Assessing Officer further observed that no claim of credit of TDS/TCS was made in the original return of income. Therefore, the Assessing Officer held that the claim made vide application u/s 154 of the Act amounts to a fresh claim and not a prima facie mistake apparent from the record. Accordingly, all applications u/s 154 of the Act were rejected. The assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeals of the assessee.
The Ld. AR submitted that the TDS Certificates were not in possession with the assessee at the time of filing original returns, and, therefore, was not able to claim the TDS. The Ld. AR further submitted that the revised return including the claim of TDS was filed within time. Thus, the applications under Section 154 of the Act should have been allowed by the Assessing Officer as there was no time limit involved. The Assessing Officer has the authority to look into the matter of the TDS Certificate which was not earlier brought on record due to the genuine reason of the assessee. The assessee also relied on Karnataka High Court judgment in the case of CIT vs. Digital Global Software Ltd. 2011 15 Taxman.com 78.
The Ld. AR also relied on the order of the ITAT, New Delhi in the case of ITO vs. Krish Raj Hotels and Motels Pvt. Ltd 2012, 27 Taxman.com. The said order held as under: “29. From the above Rules, it is clearly evident that credit for tax deducted at source and paid to the Central Government shall be given on the basis of information relating to deduction of tax furnished by the deductor to the IT authorities and the information in the return of income in respect of the claim for the credit for the Assessment Year for which such income is assessable.
The order under Section 154 of the IT Act was passed by the A.O on 29th July, 2010. The Rules, as staled above, were inserted w.e.f. 1st April, 2009. The A.O was, therefore, bound by these Rules. By not granting the credit of TDS to the assessee, rr. 37BA (1), (3) (i) and (4) were flouted. The Learned CIT(A) correctly rectified this position also.
The Department has not been able to show as to why, in this scenario the assessee was required to file any revised return of income. There was no excess TDS to be claimed. It was due to sheer unintended inadvertence that the total TDS of Rs.31,47,636/- did not get shown in the return, though as per the TDS certificates filed along with the return, the total TDs undisputedly was of Rs.31,47,636/-.
In view of the above discussion, we hold that the CIT(A) has rightly directed to A.O to allow credit of TDs of Rs.31,47,636/- to the assessee and to grant consequential refund. Thus, finding no error whatsoever in the impugned order, the same is hereby confirmed. The grievance of the Department is found to be sans substratum. It is, hence rejected.”
The Ld. DR relied on the CIT(A)’s order.
We have heard both the parties and perused all the records. The TDS Certificates were not in possession with the assessee at the time of filing original returns, and, therefore, was not able to claim the TDS. In fact, the revised return included the claim of TDS and the same was filed within time. Thus, under Section 154 of the Act should have been allowed by the Assessing Officer. The Assessing Officer has the authority to look into the matter of the TDS Certificate which was not earlier brought on record due to the genuine reason of the assessee. The reliance on the judgment of the Hon’ble Karnataka High Court judgment in the case of CIT vs. Digital Global Software Ltd. 2011 15 Taxman.com 78 is proper. The Hon’ble High Court held that as under:- “18. Even if it is erroneous, unless the said erroneous order is prejudicial to the interest of the Revenue, the Commissioner could not have exercised the said power. From the admitted material on record, the amount that is ordered to be refunded to the assessee is not the amount, which is lawfully due to the Revenue at all, it was an amount which the Revenue legitimately should have refunded if only the claim had been made in the return enclosing the certificates under Section 203. The said amount should have been refunded to the assessee. Because he was handicapped by such certificates not being forwarded to him, consequently not able to make the claim, such a claim was not made. The moment he got possession of those certificates on 12/2/2011, within two years from the date of the end of the Assessment Year, he has put forth the claim. The said amount was not a lawful amount to the Government. It was an amount which should have been refunded to the assessee.”
In the present assessee’s case, when the assessee was in possession of TDS certificates, the assessee immediately claimed the same in revised return and that to within stipulated time. The case laws submitted by the assessee also supports the same. The reliance of the Assessing Officer on the Hon’ble Apex Court decision in case of Goetz (India) Ltd. is in favour of the assessee as there is genuine and valid claim of TDS as it is not new but the TDS certificate was issued later on which was reflected in the revised return of income of the assessee. Therefore, the Assessing Officer as well as CIT(A) was not right in disallowing the TDS claim which is genuine and valid claim of the assessee. Hence, the appeals are allowed.
In result, appeals are allowed.
The order is pronounced in the open court on 18th of November, 2016.