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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI AMIT SHUKLA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
These two separate appeals by the assessee are preferred against the two separate orders of the CIT[A] – 34, New Delhi and CIT[A]– 3, Delhi dated 28.03.2018 and 22.01.2018 pertaining to Assessment Years 2013–14 and 2014–15 respectively. Since common grievance is involved in both the appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity.
2. The common grievance relates to not allowing the credit of TDS deducted by the Union Bank of India.
Briefly stated, the facts of the case are that during the course of scrutiny assessment proceedings, the assessee was asked to show cause as to why credit of TDS on interest income on funds held in DFCCIL-SLAO joint account, which has not been offered as income earned during the year shall not be disallowed under provisions of section 199 of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'].
4. The reply of the assessee is as under:
“Claim of TDS on interest income on FDR's made from SLAO Account. The TDS is in respect of interest on funds lying in the Joint Bank Account (Flexi Deposit) of the State Land Acquisition Officer (SLAO) & DFCCIL. SLAO is the competent Authority for acquisition of land for the project on behalf of Ministry of Railways (MOR). Money lying in the bank pertains to MOR and do not form part of the Company' Accounts as has also been disclosed vide Note No. 14.1 of the financial statements. Since TDS certificate has been issued by the bank in the name of the company and the TDS amount is being reflected in the Form 26AS of the Company the TDS has been claimed and a corresponding credit has been given actually belong to them.
It is further submitted that, as the objection has been taken this year and the Year is almost ending, there is very less time for MOR to be advised regarding claiming the TDS. DFCCIL is a part of Ministry of Railways and there is no intention to deny MOR the TDS amount as it has been duly credited to them by DFCCIL in previous years too, In view of the above it is requested that IT Department may allow TDS on jointly operated SLAO Bank Accounts to be claimed by DFCCIL for this year also as allowed in the previous years as a onetime relief, subject to the procedure to be corrected from the next year. DFCCIL would then duly approach MOR with the directions of Income Tax Department to ensure compliance.
We hope this clarifies the position and request your good self to take a considerate view in the matter"
The contention of the assessee was dismissed by the Assessing 5.
Officer who was of the view that credit of TDS by Union Bank of India is on interest income of the Ministry of Railways and since it is not assessee’s income, denied credit of TDS.
The assessee carried the matter before the ld. CIT(A) but without any success.
Before us, the learned counsel for the assessee vehemently stated that during the captioned assessment years, Ministry of Railways was not having PAN and therefore, the assessee gave its PAN on which tax was deducted at source by Union Bank of India. It is the say of the ld. counsel for the assessee that since interest income did not belong to the assessee, it did not show it in its return of income. However, since the tax was deducted at source, therefore, the assessee claimed credit of the same.
Per contra the ld. DR strongly supported the findings of the assessing officer. It is the say of the ld. DR that maybe at that point of time Ministry of Railways may not be having PAN but certainly, as on date, there must be PAN of Ministry of Railways. Therefore, the Assessing Officer should be given particulars to verify the claim accordingly.
We have carefully considered the orders of the authorities below.
We find that during the assessment proceedings itself, following note was given by AGM, Finance, as under:
“No. 55 /HQ Fin./Taxes/A Y 2013-14/BK Dated: September 27, 2017 Sub: Income Tax Appeal for the Assessment Year 2013-14- DFCCIL.
Point wise replies to the Commissioner of Income Tax (Appeals) are offered as under:-
Bank accounts for acquisition of Land for DFCCIL project is jointly operated in the name of the ‘Competent Authority’ i.e. SLAO [State Land Acquisition Officer] and the official nominated by DFCCIL. All the payments released by the Railways towards
compensation will be released into these accounts. Disbursement of compensation is done by cheque /Electronic mode jointly signed by the Competent Authority ie SLAO and DFCCIL officer.
Funds lying in SLAO land bank accounts for financial year 2012-13 belong to MoR.
3. As funds lying in the SLAO Accounts belong to MoR, the interest credited in land •/SLAO bank Accounts also belongs to MoR. Accordingly DFCCIL is not booking this interest as income in its books of account.
MoR, being Government, did not have Permanent Account Number (PAN) in Financial year 2012-13, and the TDS on land bank accounts has been deducted and/or reflected in PAN of DFCCIL. TDS though reflected in the 26AS of DFCCIL and claimed by DFCCIL, belongs to MoR and to set right this transaction, DFCCIL passes on the credit of TDS to MoR by way of accounting entry.
SANJEEV GUPTA Addl. General Manager (Finance) Dedicated Freight Corr.c - Corporation of India Ltd. (A (A (A Govt, of India (A India India India (Ministry of Railways) (Ministry o f Railways) (Ministry o (Ministry o f Railways) f Railways)
A perusal of Clause 4 shows that it has been specifically mentioned that TDS has been claimed by the assessee belonging to MOR and to set right this transaction, the assessee has passed on credit of TDS to MOR.
However, we do not find any evidence to show that the assessee has actually passed on the credit of TDS to Ministry of Railways. Therefore, in the interest of justice and fair play, we restore this issue to the file of the Assessing Officer. The assessee is directed to demonstrate that the credit of TDS have actually been transferred to the account of Ministry of Railways. If possible, the assessee can furnish PAN of Ministry of Railways and ask the bank to rectify the TDS certificate and amend Form 26AS so that Ministry of Railways gets credit of TDS. However, if the assessee is not able to furnish the PAN details, then the Assessing Officer shall verify whether TDS credit has been repaid by the assessee to Ministry of Railways and if found so, credit should be given to the assessee.
In the result both the appeals of the assessee in and 4149/DEL/2018 are allowed for statistical purposes.
The order is pronounced in the open court on 23.11.2021.