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2016 (5) TMI 1093 - ITAT AHMEDABAD

2016 (5) TMI 1093 - ITAT AHMEDABAD - TMI - Rectification application regarding the credit of TDS rejected - Held that:- From going through the above decision of Hon’ble Karnataka High Court in the case of Digital Global Soft Ltd (2011 (9) TMI 206 - KARNATAKA HIGH COURT), we find that in the present appeal before us the issue is similar as the assessee has not claimed TDS in its regular return of income, because it was not in the possession of the TDS certificates and so much so, the deductor M/s .....

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itted by it at the time of filing of return of income.

We are, therefore, of the view that the assessee is very much eligible for getting credit of ₹ 74,774/- as the said amount was not a lawful amount to the Government and the assessee should not be deprived of the credit of TDS of ₹ 74,774/- for the mistake/delay made by the deductor. In the given circumstances, as the assessee was not having any possibility to revise the return u/s 139(5) of the Act, the only option le .....

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assessee during the appellate proceedings before the ld. CIT(A) and we are, therefore, of the view that the matter to be set aside to the file of the ld. Assessing Officer to allow the claim of TDS of ₹ 74,774/- after verifying the books of accounts and financial statements with regard to the receipt of reimbursement of expenses on which TDS of ₹ 74,774/- has been deducted by M/s.Bodal Chemicals Limited. Needless to mention that necessary opportunity of being heard to be given to the .....

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x (Appeals)-6, Ahmedabad dated 06.02.2013 passed for the Assessment Year 2008-09. 2. The grievances of the assessee, as per grounds of appeal, are as follows :- 1 The learned CIT(A) has erred in law and on facts in confirming the action of AO by not giving credit of TDS of ₹ 74,774/- while passing the order u/s 154 of the Income Tax Act, 1961. 2 The learned CIT(A) has erred in law and on facts in refusing the TDS credit primarily on technical consideration u/s 155(14) without considering g .....

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r on account of negligence; nor the appellant stands to benefit by resorting to delay. 5 The learned CIT(A) has erred in law and on facts while not considering that gross reimbursement of expenses aggregating ₹ 9,89,426/- have been credited in profit and loss account of the previous year, included in the total income and offered to tax and taxed in the assessment order under section 143(3). He further erred in law and on facts while not considering that section 199 mandates TDS credit to b .....

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h the authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 7 Therefore, it is submitted that relief claimed above be allowed and refund of ₹ 74,774/- be granted with interest thereupon as may be thought fit by your honour. 3. The assessee has taken several grounds in its appeal but the main grievance revolves around a single issue, whereby it has challenged the action of CIT(A) in upholding the rejection of rectification application .....

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- made by M/s. Bodal Chemicals Ltd, was not claimed as Form No.16A was received from M/s. Bodal Chemicals Ltd only during the month of January, 2011. Thereafter, the assessee filed a rectification application u/s 154 of the Act on 03.02.2011, requesting to give credit u/s 155(14) of the Act by submitting two TDS certificates in respect of the said amount. The Assessing Officer rejected the application for rectification on the ground that section 155(14) was attracted only in cases where the TDS .....

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ve submitted that the return of income was filed declaring total income of ₹ 3,19,27,751/- and the assessment order u/s 143(3) was framed on 13/12/2010 determining total income at ₹ 3,37,08,007/-. Thereafter, the appellant received two TDS certificates giving credit of ₹ 74,774/- (Rs.65,441/- + ₹ 9,333/-) issued by Bodal Chemicals Ltd on receipt of reimbursement expenditure of ₹ 5,77,594/- and ₹ 4,11,832/-. 7.1 The ld. Authorized Representative further submitt .....

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rized Representative also submitted that since the appellant was not in possession of the impugned TDS Certificates, the appellant did not claim the TDS credit of ₹ 74,774/- in the return of income, though the corresponding income of ₹ 5,77,594/- and ₹ 4,11,832/-was duly shown in the Profit & loss account. He further submitted that the appellant received the impugned TDS Certificates from the Bodal Chemicals Ltd only in the month of January, 2011 and accordingly the appella .....

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of ₹ 5,77,594/- and ₹ 4,11,832/- is shown in the return of income by the appellant. He contended that in view of Section 155(14) of the Act, where the TDS Certificate is not furnished with the return of income, and if the same is furnished within 2 years from the end of the relevant assessment year in which the income is assessable, the Assessing Officer shall grant TDS credit to the assessee. The only condition for this, however, as per the proviso to Section 155(14) is that the inc .....

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ed by the Income-tax (Sixth Amendment) Rules, 2009, in the IT Rules, 1962, w.e.f. 1st April, 2009, would clearly provide 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. 7.4 The ld. Authorized Representative has .....

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rther placed reliance on the decision of Karnataka High Court in the case of CIT vs. Digital Global Soft Ltd., reported in 15 taxmami.com 78, wherein the assessee came into possession of TDS certificates, it filed an application under section 154 within two years from date of end of assessment year claiming said amount; and the Assessing Officer being fully satisfied about genuineness of certificates as said amount had been paid to Government, and assessee was not liable to pay any tax, ordered .....

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ying the credit of Tax Deducted at Source (TDS) of ₹ 74,774/-. From going through the records, we observe that the assessee has not made any claim of Tax Deducted at Source (TDS) of ₹ 74,774/-, deducted by deductor M/s. Bodal Chemicals Limited on receipt of reimbursement expenditure. The impugned TDS Certificates were received by the appellant in the month of January, 2011, i.e., almost after the lapse of two years and nine months from the end of the financial year to which it relate .....

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143 of the Act within four years from the end of the financial year. In the case of the assessee, the statutory time limit u/s 154 was getting lapsed on 31st March 2011, and just before the lapse of the period u/s 154 of the Act the assessee moved an application u/s 154 of the Act on 03.02.2011. The basic question arising in the given facts and circumstances is that whether an assessee who has not claimed TDS while filing its return of income, when the requisite information/TDS Certificates wer .....

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a High Court in the case of CIT vs. Digital Global Soft Limited, reported in 15 taxmann.com 78, on the following facts:- For the relevant assessment year, the assessee filed return of income showing certain income. It claimed credit for certain amount towards tax deducted at source. The Assessing Officer processed the return under section 143(1)(a). Subsequently, the assessee filed a letter pointing out that at the time of filing the return, credit for TDS amounting to ₹ 19,44,692 was not .....

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unt was not claimed in the returns filed by the assessee. Therefore, it modified the order under section 154 by withdrawing the credit given to the amount of ₹ 19,44,672. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. The Tribunal held that there was neither any error in the order section 154 nor any prejudice caused to the Government by giving credit for the same. Accordingly, it set aside the order of the Commissioner under section 263. The Hon ble Karnata .....

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any the return under section 139, the return so filed shall be regarded as defective. In other words, in the return filed under section 139, if the assessee is claiming deduction of the tax deducted at source, the said return should accompany the proof of such tax deducted at source. However, proviso to said provision makes it clear that if the person who deducted the tax has not furnished the certificate to the assessee, then only after such valid claim is made, the amount deducted is treated a .....

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a) or under section 143(3) or under section 154, a power is vested with the said assessing authority to rectify any mistake apparent from the record in the said order. In order to rectify the said mistake, he can amend any order passed by him, under the provision of the Act or amend any order passed by him, under the provision of the Act or amend any intimation or deemed intimation under sub-section(l) of section 143. Such an amendment can be made on its own motion or when the mistake is brought .....

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application is received by it either by making amendment or refusing to allow the claim. If any amendment to be carried out is prejudicial to the interest of the assessee, then the assessee must be heard. If the order passed by the assessing authority is merged with the order passed by the Appellate Commissioner or Tribunal, the assessing authority has no jurisdiction to amend or rectify' the mistake in such order. [Para 8] 10. From going through the above decision of Hon ble Karnataka High .....

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essee came into possession of the TDS Certificates issued by M/s. Bodal Chemicals Limited for ₹ 74,774/-. The appellant has submitted before the Assessing Officer that the amount on which TDS of ₹ 74,774/- has been deducted is duly shown in the financial statements submitted by it at the time of filing of return of income. We are, therefore, of the view that the assessee is very much eligible for getting credit of ₹ 74,774/- as the said amount was not a lawful amount to the Gov .....

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