TMI Blog2010 (12) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... law and as long as taxes so deducted have been paid over to the Government and certificates in respect of the same have been issued by the tax deductor – Appeal is allowed by directing the AO to grant credit for tax deducted at source - 6353/MUM/09 - - - Dated:- 31-12-2010 - N V Vasudevan Judicial Member J, Pramod Kumar Accountant Member J, P J Pardiwala and Madhur Agarwal, for the appellant Narendra Singh, for the respondent ORDER Per Pramod Kumar : 1. By way of this appeal, the assessee has challenged correctness of CIT(A)'s order dated7th October 2009, for the assessment year 2006-07, on the following grounds : 1. On the facts and in the circumstances of the case and in law, learned CIT(A) erred in not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of supply of copy righted software in connection with telecommunications project. During the relevant previous year, the assessee received gross amount of Rs. 162,77,19,401, towards supply of software, from Reliance Infocomm Limited (Reliance Info, in short) out of which withholding tax under Section 195 of the Income Tax Act, computed @ 15% under Article 12 of India US Double Taxation Avoidance Agreement, amounting to Rs. 24,41,58,046 was said to have been deducted by the Reliance. The payer also issued certificates evidencing these tax withholdings, i.e. TDS certificates, after depositing the taxes so deducted by the Reliance and in the prescribed manner, for a sum of Rs. 21,26,74,006. As on the time of filing the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is not found to be acceptable. Verification of the authenticity and genuineness of the TDS certificates are always within the rights of the department. Moreover, this verification is a factual matter, and hence legal submissions are not required. The credit of the TDS has to be given if the certificates are genuine. In the instant case, the fact that tax deposited by Reliance has been refunded to it is known, and hence certificates issued by it no longer remain valid as no tax remains deposited with the Government. In view of the above, an enquiry was conducted from Reliance Infocomm Limited, vide letter dated24th December 2008, giving them the details of the TDS certificates on which credit was claimed by the assessee, and they were re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance has been re-deposited by Reliance with the Government, and, if yes, the credit of the same be granted to the appellant as per law, on the basis of original TDS certificates filed by the appellant. In respect of TDS, which has not been claimed as refund by Reliance, the credit of the same shall be granted to the appellant as per law based on original TDS certificates produced by the appellant. Where no TDS certificates are produced by the appellant, credit be granted on the basis of indemnity being obtained by the appellant as provided in the procedure of law. 5. The assessee is aggrieved and is in appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered the applicable leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 200 and that tax deduction certificates have been issued under section 203 - at least to the extent of tax deductions amounting to Rs. 21,26,74,006. All these requirements have been duly complied with, and, in all fairness to the Assessing Officer, the compliance in respect of these provisions has not even been questioned. The only reason that has prompted the Assessing Officer to decline the credit in respect of the above TDS certificates is that Reliance Infocomm Limited has been refunded taxes which were deducted by Reliance Infocomm Limited and which were deposited with the Government of India. 8. It is also an undisputed position that such a refund to tax deductor, as has been granted in the present case, is not prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise of grant of refund, such an exercise cannot take away, curtail or otherwise dilute, the rights of the person from whose income taxes are so deducted and to whom such certificate is issued. The rights are granted to the person, from whose income taxes are so deducted and who is issued the tax deduction certificate in the prescribed manner, by the statute, i.e. the Income Tax Act, 1961, and these rights cannot be abridged by an administrative action on the part of the revenue authorities - and particularly when the person, whose rights are being sought to be abridged, was not even a party to the administrative exercise or was in known of refund being granted to Reliance Info. In our considered view, refund granted to Reliance Info ..... X X X X Extracts X X X X X X X X Extracts X X X X
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