TMI Blog2021 (12) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER PER R.K. PANDA, A.M. This appeal by the Assessee is directed against the order dated 21.02.2018 of the Ld. CIT(A)-20, New Delhi, relating to the A.Y. 2014-15. 2. Facts of the case, in brief, are that the assessee is a firm and engaged in the business of profession. It filed its return of income on 30.09.2014 declaring an income of ₹ 1,21,28,560/-. During the course of assessment proceedings, the A.O. asked the assessee to file reconcile statement in respect of TDS claimed by the assessee in comparison to TDS reflected in the 26AS statement. From the reconciliation statement filed by the assessee, the A.O. noted that assessee has claimed TDS amounting to ₹ 1,00,081/- whereas the corresponding income on this TDS has not been offered to tax as it was not received by the assessee in the previous year. In view of the above and in the light of provisions contained in Section 199 of the I.T. Act, 1961, the A.O. disallowed the claim of assessee in respect of TDS amounting to ₹ 1,00,081/-. 2.1. In appeal, the Ld. CIT(A) directed the A.O. to give credit of the proportionate TDS of ₹ 1,00,081/- in the year under consideration by observing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/-. He submitted that no income has been received from the clients who had deducted TDS and deposited with Central Government to the extent of ₹ 14,236/-. Referring to the decision of Coordinate Bench of the Tribunal in the case of Chander Shekhar Aggarwal vs.,. ACIT, Circle-37(1), New Delhi [2016] 67 taxmann.com 62 (Delhi-Trib.) he submitted that the Tribunal in the said decision has held that where assessee following the cash system of accounting, would be entitled to credit of entire amount of TDS being offered as income in the year of deduction. He accordingly submitted that the order of the Ld. CIT(A) be set aside and A.O. be directed to allow the credit for TDS/tax paid. 5. The Ld. D.R. on the other hand heavily relied on the order of the Ld. CIT(A). 6. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case is a partnership firm of Chartered Accountants which accounts for its income on cash basis. We find during the course of assessment proceedings the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he certificate is issued and also in future where balance of such income is found to be assessable as per the mandate of section 199 of the Act. She has held that any amount which has not been assessed in any year but referred in the TDS certificate cannot be claimed under section 199 of the Act. 9. Sub-section (1) of section 199 of the Act provides that any deduction made in accordance with the foregoing provisions of this chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. In view thereof, since the tax was deducted at source by the deductor and the amount was deposited by the deductor on behalf of the assessee, the said sum is deemed to be the payment of tax made on behalf of the assessee. Also, section 198 of the Act provides that all sums deducted in accordance with Chapter XVII-B of the Act shall for the purposes of computing the income of an assessee be deemed to be income received. Thus, section 198 of the Act specifically provides that tax deducted at source shall for the purpose of computing income of an assessee will be deemed to be income received by the assessee. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 authorized 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 with the risk management strategy formulated by the Board from time to time.] 10. A reading of the aforesaid will make it apparent that Rule 37BA(1) of the Act provides rules relating to have credit for the purpose of section 199 of the Act as is provided in section 199(3) of the Act. Rule 37BA(3)(i) of the Act provides that credit for tax deducted at source and credited to the account of Central Government shall be given for the assessment year for which, such income is assessable. Thus, if the said rule is read, it is clear that the assessee is entitled to get credit of the tax deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be entitled to credit of the entire TDS of ₹ 10/- but would be entitled to proportionate credit only. Now let us assume that ₹ 90/- is never paid to the assessee by the deductor. In such circumstances, ₹ 9/- which was deducted as TDS by the deductor would never be available for credit to the assessee though the said sums stand duly deposited to the account of the Central Government. Rule. 37BA(3) of the Act cannot be interpreted so as to say that TDS deducted at source and deposited to the account of the Central Government is though income of the assessee but is not eligible for credit of tax in the year when such TDS was offered as income. This view is otherwise also not in accordance with the provisions contained in section 198 and 199 of the Act. The proposition as laid out by the CIT(A) and learned DR before us therefore cannot be countenanced. In arriving at the above conclusion, we also derive support from the decision of Visakhapatnam Bench in the case of Peddu Srinivasa Rao (supra) has held as under : 8. We have carefully perused the provisions of section 199 of the Act and according to the preamended provisions of section 199, the credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may 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. 11. In fact the above view has also been followed by Ahmedabad Bench in the case of Sadhbav Engineering Ltd. (supra) wherein it was held as under: 26. We find that the Visakhapatnam Bench in the case of Peddu Srinivasa Rao (supra) has held as under : . The ld. DR could not cite any contrary decision or any other good reason for which the aforesaid decision of the Co-ordinate Bench of the Tribunal should not be followed by us. Respectfully following the aforesaid order of the Tribunal, we set aside the orders of the lower authorities and direct the AO to allow credit for the TDS to the assessee. Thus, the ground of appeal of the assessee is allowed. 12. For the reasons stated above, the claim of the assessee is allowed in as much as i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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