TMI Blog2017 (2) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... and T.D.S credits are intertwined matter. In the background of aforesaid discussion and precedent we are of the considered opinion that the reopening in this case was valid. Accordingly, we uphold the order of Ld. CIT (A)on the issue of validity of reopening proceedings. As regards the merits of the issue we find that Ld. CIT (A) has drawn adverse inference by observing that assessing officer has made the addition without proper verification and correlation of the tax deduction at source certificates with the income offered by the assessee in assessment year 2005 -06. We find that it is settled law that the powers of the Ld. CIT(A) are coterminous with that of the assessing officer. When the Ld. CIT (A) has found an error in the proceedings of the authorities below. It was his duty as well as jurisdiction to correct the error. This proposition is supported by the case law from honourable Supreme Court in the case of Kapoorchand shrimal [1981 (8) TMI 2 - SUPREME Court ]. Hence we are of the considered opinion that the Ld. CIT(A) was not correct in directing the deletion of the addition without verification and correlation of the tax deduction at source certificates with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires to be quashed. ii). Without prejudice to the ground of appeal no.1, it is submitted that, the CIT(Appeals) having deleted the only addition made by the Assessing Officer amounting to ₹ 54,15,809/- in the reassessment proceedings, the re assessment order dated 27-12-2010 made u/s 143(3) r w s 147 of the IT Act does not survive, and, therefore, requires to be quashed. iii.) Without prejudice to the above grounds, it is submitted that, the CIT(A), while directing the Assessing Officer to withdraw excess credit for TDS granted to the appellant company for the assessment year 2005-06, ought to have directed him to allow credit for the said tax deducted at source being withdrawn from this year in the year(s) to which such tax deducted at source relate. iv.) The CIT(A) erred in not directing the Assessing Officer to cancel the interest charged u/s 234B of the IT Act. Your appellants submit that, on the facts and in the circumstances of their case, no interest u/s 234B of the IT Act is chargeable. v). The CIT(Appeals) failed to appreciate that interest u/s 234D cannot be increased pursuant to order u/s 147 of the IT Act. Your appellants submit that, on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,15,8091/- which consequently escaped assessment. 5.1 The assessee vide letter issued from this office was called to show cause why this wrong claim should not be disallowed. The assessee vide letter dated 7th August, 2010 submitted as under:- Firstly, you must appreciate that, the TDS amount will not determine the income assessable for a particular year. In fact, it is other way round that, based on the income s for a particular year, on the basis of method of accounting regularly followed by an assessee, credit for tax deducted at source has to be allowed for that year. In this view of the matter alone, it is submitted that, the basis on which the amount of income escaping assessment has been worked out, is incorrect on facts and in law. Without prejudice, enclosed please find copies of our letter dated 28/04/2009 and 28/07/2009 wherein a detailed reconciliation is given with regard to the income offered for tax and claim for tax deducted at source for the above year. From the enclosed letters, you will please observe that, there are certain advances [not income] on which tax has been deducted at source. Similarly, there is some income which has been assessed to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company has resulted in tremendous confusion all round. As per Section 199 of the l.T. Act, 1961 alongwith relevant rules credit for TDS is allowable in the year in which corresponding income is offered for taxation by an assessee. This lead to a situation where by assessing officer had reasons to believe that the appellant company had suppressed its gross receipts Therefore, the assessing officer rightly proceeded to reopen the assessment in this case. The appellant company is responsible for causing such confusion. Therefore, I hold that the proceedings u/s.148 were validly initiated. Coming to the issue regarding the addition of ₹ 54,15,809/- on merits, I find that assessing officer has wrongly worked out income/gross receipts of the appellant company based on the TDS certificates, credit for which was claimed by the appellant company during the year but the income of the same was not offered for taxation in the current year, was not a correct method for working out suppression of receipts correctly. The addition made by the assessing officer is totally uncalled for because proper verification and correlation of the TDS certificates with the income offered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the core of the issue in dispute is the claim of tax deduction at source credits by the assessee on the basis of certificate which do not relate to income of the present assessment year. Grant of credit on the basis of tax deduction at source certificates relating to other assessment year is a matter of fact and it cannot be said that it requires any exposition of law. Hence reopening on the basis of an audit objection which is based upon for the cannot be said to vitiate the reopening. This is a settled law. As regards the decision of the Tribunal in earlier year wherein it was held that income represented by the deduction at source certificates relating to other years cannot be added as income of the year in which the same was claimed, the same is also related to facts of the case of the particular year and cannot be said to be laying down any blanket ratio. As regards the issue of dropping of rectification proceedings we find that the matter of reconciliation of TDS certificates is a matter which requires analysis and examination of the facts and cannot be said to be subject matter of rectification of apparent mistake. Hence the assessing officer has rightly dropped the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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