TMI Blog2014 (9) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Allied Motors Pvt. Ltd. Vs. CIT ( 1997 (3) TMI 9 - SUPREME Court ), wherein it has been held that “the provisions of the first proviso, which has newly been inserted by the Finance Act, 1987, with effect from 1st April, 1998, to section 43B is remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the assessee and which made the provision unworkable or unjust in a specific situation, and is of clarificatory nature and, therefore, has to be treated as retrospective with effect from 1st April, 1984, the date on which section 43B has newly been inserted by the Finance Act, 1983.” Similarly, here also the Rule was inserted by the Amendment Rules, 2009 to remove the hardship faced by assessees and to give true meaning to the provision of section 199 of the Act. In such circumstances, I direct the AO to allow the credit of TDS after verifying declaration to be filed by deductee in term of proviso to sub-rule (2) of Rule 37BA of the Rules. - Decided in favour of assessee. - I.T.A No.2417/Kol/2013 - - - Dated:- 2-9-2014 - Shri Mahavir Singh, JM For the Respondent: Shri David Z. Chawngthu, Addl. CIT, Sr. DR ORDER This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. During the course of assessment proceedings, the AO required the assessee to produce reconciled statement of professional receipts vis- -vis the claim of TDS. The assessee revealed that the credit claimed for TDS certificates issued in favour of M/s. Tiwari Co. for the reason that M/s. Tiwari Co. became proprietorship concern of the assessee and earlier this was a partnership firm. This partnership firm M/s. Tiwari Co. got discontinued w.e.f. 30.12.2006. Before the AO, the assessee relied on the provisions of section 37BA of the I. T. Rules, 1962 (hereinafter referred to as the Rules ), wherein M/s. Tiwari Co. declared and confirmed that the income on which tax has been deducted at source for AY 2008-09 relevant to FY 2007-08 is assessable in the hands of the assessee Mr. Parmanand Tiwari other than the deductee and credit for such deduction of tax at source be given to him as income on account of TDS is includible in the assessment proceedings of Mr. Parmanand Tiwari, the assessee. The assessee contended before the AO that he has already included the said entire income in the return of income and accordingly, the credit for TDS shall be allowed in accordance with Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the year 1983. The partnership firm M/s. Tiwari Co. got dissolved w.e.f. 30.12.2006 and assessee became proprietor of this firm. The assessee has included the income qua the TDS certificates issued in the name of M/s. Tiwari Co. having PAN AACFT6997P, which stands for the partnership firm and also claimed the credit for TDS in the individual capacity. The AO completed the assessment whereby he included the entire income of the firm M/s. Tiwari Co. but did not allow the credit for TDS at ₹ 1,53,380/- for the reason that the TDS credit is not reflected in the PAN of Shri Parmanand Tiwari, the Chartered Accountant in his individual capacity. During the course of assessment proceedings, assessee submitted proper declaration giving the entire fact that the income of M/s. Tiwari Co. has duly been included in the hands of its proprietor and is assessable in the hands of the assessee. M/s. Tiwari Co. under whose PAN this TDS has been deducted, has not made any separate claim of the TDS and also not declared separate income on this account. After going through the facts in entirety, I find that this is only a technical breach and that also for the reason that these profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. (4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of- (i) the information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority; and (ii) the information in the return of income in respect of the claim for the credit, subject to verification in accordance w th the risk management strategy formulated by the Board from time to time. From the above provisions of Rule 37BA of the Rules, wherein it has clearly been mentioned that credit for tax deducted at source and paid to the Central Government shall be given to the person provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of other person in the information relating to deduction of tax referred to in sub-rule (1) of Rule 37BA of the Rules. Further, sub-rule (3) of Rule 37BA of the Rules provides that for the purpose of giving credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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