TMI Blog2019 (6) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri Behari Lal - Ld. AR For the Department : Shri Neil Philip-Ld.DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. Aforesaid appeal by assessee for Assessment Year [in short referred to as AY ] 2009-10 contest the order of Ld. Commissioner of Income-Tax (Appeals)-2,Mumbai [in short referred to as CIT(A) ], Appeal No.CIT(A)-2/IT/158/2016-17 dated 01/01/2018.The grounds raised by the assessee read as under:- 1.1 On the facts and circumstances of the case and in taw, the learned Commissioner of Income Tax (Appeals)-2, Mumbai had erred in confirming the order passed by the Assessing Officer u/s 154 of the Income Tax Act, 1961 dated 03/11/2016 withdrawing the TDS Credit of ₹ 1,06,50,182/- and thereby raising a demand of ₹ 1,26,23,560/- without taking into consideration the fact that all the TDS Certificates were issued in the name of the assessee and the Assessing Officer under intimation u/s 143{1) of the Income Tax Act,1961 dated 25/10/2010 and the order passed u/s 143(3) of the Income Tax Act,1961 dated 30/12/2011 after filing the Revised Return dated 25/03/2011 allowed the credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt offered by the assessee in the return of income. 2.2 In the above background, it was noted that although the income was short offered, however, full TDS credit of ₹ 109.31 Lacs was irregularly allowed in assessment framed u/s 143(3) on 30/12/2011 as against correct TDS credit of ₹ 2.81 Lacs as claimed by the assessee in the revised statement of computation of income. The said error of granting excess TDS credit was not set-right even while passing assessment order u/s 143(3) r.w.s 254 on 05/03/2016. Therefore, in terms of provisions of Section 154, Ld. AO proceeded to rectify the order passed u/s 143(3) r.w.s 254 and accordingly passed an order u/s 154 on 03/11/2016 so as to reduce the TDS credit as irregularly allowed. In the rectification order u/s 154, the excess TDS credit of ₹ 106.50 Lacs was withdrawn and consequential demand was raised against the assessee. 3. The assessee agitated the same without any success before Ld. CIT(A), however, without any success, vide impugned order dated 01/01/2018. The assessee submitted that TDS certificates were in assessee s name and the assessee had already refunded the Income Tax refund so received to M/s Shap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was restored back to the file of Ld. AO with certain directions. Pursuant to the said directions, an assessment was re-framed u/s 143(3) r.w.s. 254 on 05/03/2016 wherein the income was re-determined at ₹ 394.48 Lacs. In the said assessment order, a direction was issued by Ld. AO to allow credit of prepaid taxes, after due verification. Pursuant to same, a demand notice u/s 156 has been issued on same day raising Nil demand against the assessee. 5.2 However, subsequently, fresh Income Tax Computation Form has been issued on 03/11/2016 u/s 154 wherein the TDS credit has been reduced to ₹ 2.81 Lacs resulting into demand of ₹ 126.23 Lacs against the assessee. Nothing on record would suggest that any notice for the same was ever issued to the assessee as envisaged by the provisions of Section 154(3). Therefore, the aforesaid rectification, in our opinion, was not carried out as per the procedure laid down in Section 154(3). 5.3 Proceeding further, prima facie, it appears that the return has been revised pursuant to composite scheme of arrangement including de-merger and amalgamation between the assessee and other entities as approved by Hon ble Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case, we find no merit in the submission advanced by Mr. Agarwal. The question is, therefore, answered in the affirmative and against the revenue. The appeal is, as such, dismissed. Similarly, Hon ble Andhra Pradesh High Court CIT V/s Bhooratnam Co. [supra] has held as under: - 17. In our view, the CIT (Appeals) and the Tribunal have rightly held that the assessee is entitled to the credit of the TDS mentioned in the TDS certificates issued by the contractor, whether the said certificate is issued in the name of the Joint Venture or in the name of a Director of the assessee company. They have considered the terms of the agreement dated 12-03-2003 among the parties to the joint venture and held that credit for TDS certificates cannot be denied to the assessee while assessing the contract receipts mentioned in the said certificates as income of the assessee. The income shown in the TDS certificates has either to be taxed in the hands of the joint venture or in the hands of the individual co-joint venturer. As the joint venture has not filed return of income and claimed credit for TDS certificates and the TDS certificates have not been doubted, credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be. (2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. (3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given. 7. The revenue relies on the phrase shall be treated as a payment of tax on behalf of the person from whose income the deduction was made to contend that the assessee's TDS claim cannot be based on the receipts of M/s REPL. However, the assessee fairly admitted throughout the proceedings for its TDS claim of ₹ 1,20,73,097/- that the benefit of such claim has not been availed by M/s. REPL. Therefore, the revenue, having assessed M/s REPL's income in respect to such TDS claim cannot now deny the assessee's claim on the mere technical ground that the income in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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