TMI Blog2022 (5) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... dit of the same is to be given to the Assessee, irrespective of the year to which it relates. Hence, we direct the Assessing Officer to allow the TDS credit as per the Form No. 26AS after verification of the TDS Certificates. As regards to the CIT(A) restricting the credit of TDS to the extent claimed in the return of income, we noted that the Assessee claimed TDS on the interest at Rs. 2,90,623/- as against the TDS deducted on account of interest amounting to Rs. 4,20,856/- as per Form No. 26AS. We direct the Assessing Officer to allow the entire interest, as the Assessee has disclosed the income, i.e. interest income amounting to Rs. 42,44,457/-. We direct the Assessing Officer accordingly. - ITA No. 1734/CHNY/2019 - - - Dated:- 6-5-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER For the Appellant : N. V. Balaji , Advocate For the Respondents : AR. V. Sreenivasan , Addl. CIT ORDER Per Mahavir Singh , VP This appeal by the Assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-11, Chennai in I.T.A. No. 64/18-19, dated 28.03.2019. The assessment was framed by the Assistant Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer explained that the amounts credited represented the income receipts for multiple years and therefore only the income attributable to this assessment year is offered to tax and in support of the same filed copies of the invoices before the Assessing Officer. However, the Assessing Officer noted that the TDS corresponding to the business receipts amounting to Rs. 19,64,09,110/- was claimed in entirety, but according to him this is not acceptable in view of the provisions of Section 199 of the Act read with rule 37BA of the Rules. Therefore, the Assessing Officer restricted the TDS claim pertaining to business receipts of the financial year 2015 - 2016 relevant to the Assessment Year 2016 - 2017 for an amount of Rs. 38,75,279/- corresponding to the income offered to tax amounting to Rs. 18,22,76,362/-. The Assessee himself claimed TDS to the extent of Rs. 42,89,605/- which includes TDS of income from other sources offered to tax. Against the restriction of TDS credited at Rs. 38,75,279/- as against the claim of the Assessee to Rs. 42,89,605/-, the Assessee preferred an appeal before the CIT(A). The CIT(A) restricted the TDS claimed to the extent of Rs. 42,89,605/-, as agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 199 of the Act, read with rule 37BA of the Rules, TDS can be allowed to the credit of the Assessee, only to the extent of income that is offered to tax. The learned Counsel for the Assessee stated that this approach is erroneous and is not applicable to the Assessee's case for the reason that the requirement of income being assessed in the year on the TDS claim has been withdrawn by the Finance Act, 2008; wherein the existing Section 199 of the Act was substituted by a new Section; wherein from the old Section, a portion deleted was and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment made under this Act for the assessment year for which such income is assessable. 7. The learned Counsel for the Assessee also stated that the Sub-section (3) of Section 199 of the Act which is the enabling Section to frame the Rules for the purpose of this Section, does not apply in the present case. It was argued that the Rules that may be prescribed include the rules for the purpose of giving credit to the person, other than this rather to in Sub-section (1) and Sub-Section (2) and also the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, the learned Senior Departmental Representative relied upon the orders of the Assessing Officer and that of the CIT(A) and also relied on the decision of the Tribunal, Kolkata Bench in the case Garden Reach Shipbuilders and Engineers Limited, Kolkata Vs. The Commissioner of Income Tax, Kolkata in I.T.A. No. 710/Kol/2014 dated 22.03.2017 11. We noted that, as regards to the provisions of Section 199 of the Act by virtue of which TDS has been claimed by the Assessee, the requirement of income being assessed in the year of TDS claimed has been withdrawn by the Finance Act, 2008; wherein the existing Section 199 of the Act was substituted by a new Section of 199 of the Act. The earlier Sub-section (1) of Section 199, prior to amendment read as under: 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, or of the owner of the security, or depositor or owner of property or of unit holder or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng rules: (a) Rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2), (b) Rules for the assessment year for which such credit may be given, and (c) Such other rules as may be necessary. 12. We noted that this position is discussed by the Hon'ble Hyderabad Bench of this Tribunal in the case of Zelan Exports Vs. Deputy Commissioner of Income Tax (supra); wherein it is held as under: According to the pre-amended provisions of Section 199, the credit of deduction made in accordance with the relevant provisions of this Chapter and paid to the Central Government, shall be given for the amount so deducted on the production of the Certificate furnished under Section 203 for the assessment made under this Act for the assessment year for which such income is assessable. But in the amended provisions, the words in the assessment year for which such income is assessable' has been omitted. Meaning thereby, that the Legislature was quite conscious about the facts and hardships faced by some Assessees, while making the amendments in Section 199 and in amended provisions nothing has been stated about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beyond, or is contrary to, what the Section contemplates, the rule must yield to the Statute. (Central Bank of India Vs. Workmen AIR 1960 SC 12). It is necessary, therefore, to read Rule 37BA(2)(i) of the Rules in conformity with Sections 194C and 199(1) of the Act. 14. From the above provisions and case-laws, we are of the view that the provisions of the Rules cannot overrule the provisions of the Act and where the Act is omitted, the requirement of the income being offered to the assessment, as a condition to obtain credit for TDS, a rule cannot be quoted to deny the TDS credit to the Assessee, what the Act has given to him. Meaning thereby, as per the amended provisions, once the TDS was deducted, a credit of the same has to be given to the Assessee, irrespective of the year to which it relates. 15. In the present case, the previous year, i.e., Financial Year involved is 2015 - 2016 relates to the Assessment Year 2016 - 2017 and the turnover of the Assessee is Rs. 18,22,76,362/- and the interest income earned is Rs. 42,44,457/-. As per Form No. 26AS, the business receipts is Rs. 19,87,88,005/- and the interest income is of Rs. 42,08,858/-, thereby the total turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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