The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that Tax Deducted at Source (TDS) available in the year in which Income had been reported should not be deferred to some other assessment year as per Section 199(3) of the Income Tax Act 1961 read with rule 37BA (3).
The sole issue agitated by the assessee, CAE Simulation Training Pvt. Ltd., in the appeals was that the Commissioner of Income Tax (CIT(A)) had erred in law in ignoring the provisions of section 199 of the Income Tax Act, 1961 r.w.r 37BA (3) of the Income-tax Rules, 1962 which clearly provided that the credit of TDS should be given for the assessment year for which the income was assessable.
According to Section 199(1), any deduction paid to the Central Government in adherence to the aforementioned provisions of this Chapter shall be treated as a payment of tax on behalf of the person whose income the deduction was taken from, or of the owner of the security, the depositor, the owner of the property, the unit-holder, or the shareholder, as applicable.
(2) Any amount paid to the Central Government in accordance with subsection (1A) of Section 192 is treated as tax paid on behalf of the person whose income the amount in question relates to.
(3) The Board may create any rules that may be required for the purposes of granting credit for tax deducted or paid in accordance with the provisions of this Chapter, including any rules for granting credit to individuals other than those mentioned in subsections (1) and (2) as well as the assessment year for which such credit may be granted.
Nagesh Behl, on behalf of the assessee, drew attention to a recent order of Interglobe Enterprises Pvt. Ltd. vs. ACIT and submitted that the issue involved in the present appeals was squarely covered by the order of the Tribunal.
Pankaj Khanna, who appeared on behalf of the revenue, supported the orders of the authorities below. However, in all fairness, he did not dispute that the facts and circumstances of the appeals in hand were quite identical and similar to the facts and circumstances in the case of Interglobe Enterprises Pvt. Ltd. wherein an identical issue had been agitated and restored to the file of the AO
The Division Bench of Anil Chaturvedi, (Accountant Member) and C.M. Garg, (Judicial Member) was unable to see any conclusion or findings by the authorities below to show whether tax credit for TDS reflected in Form No.26AS for relevant assessment years had been claimed or otherwise in that assessment year. Thus, verification and examination of the factual position were required to rule out the possibility of a double claim by the assessee.
The Bench set aside the impugned order and directed the assessing officer to grant TDS credit to the assessee on the conditions that (i) the assessee had not claimed any
The Credit of TDS in any other assessment year; and (ii) an undertaking or affidavit was placed by the assessee before the Revenue authorities giving assurance that such credit claimed for the relevant assessment years should not be double claimed in any other assessment year in future based on Form No.26AS or any other document.
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