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TMI Blog2022 (10) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (Appeals) failed to appreciate the provisions of Rule 37BA(3) which provide that credit for TDS should be granted for the assessment year in which the income is assessable. 3. The Commissioner of Income-tax (Appeals) erred in refusing to follow the order of the Income-tax Appellate Tribunal in the Appellants' own case for the AY 2015-16 when the facts of the case were identical." 2. The assessee is a shipping company and provides offshore oilfield services. During the year under consideration the assessee has filed its return of income on 30.11.2018 which was processed u/s143(1) of the Act by the CPC, Bangalore on 19.03.2020. The issue contested in the appeal is that while processing return of income, CPC has granted TDS credit to the amount of Rs. 17,51,85,759/- against the claim of TDS amount of Rs. 17,80,18,807/-. Therefore, TDS credit was granted short by the amount of Rs. 28,33,048/-. 3. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) had dismissed the appeal of the asssesse stating that differential tax credit of Rs. 28,33,048/- which was not granted in the intimation issued was due to the fact that the said amount wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in fovour of the assessee in accordance with the provisions of Sec. 199 r.w.rule 37BA(3) of the Act. The relevant operating para of the decision of ITAT is reproduced as under: (A) page 6-13 ITAT order "6. We have given a thoughtful consideration to the issue before us and are unable to persuade ourselves to subscribe to the view taken by the lower authorities. On a perusal of section 199(3) of the Act, we find, that the same reads as under:- "(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 credit may be given. (Emphasis supplied by us)." In our considered view, the aforesaid statutory provision contemplates that the Board may, for the purpose of giving credit in respect of tax deducted or tax paid in terms of the provisions of Chapter VII of the Act, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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." Rule 37BA(3)(i) clearly provides that credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. In other words, it is specifically provided that the credit for the tax deducted at source cannot be divorced and/or separated from the year in which the corresponding income is assessable. In fact, we find that Rule 37BA(3)(ii) goes to the extent of providing that where tax has been deducted at source and paid to the Central Government and 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. Accordingly, the legislative intent of emphasizing an inextricable nexus between the credit for tax deducted at source (TDS) and the correlating assessable income, can safely be gathered beyond any doubt. In fact, we hold a strong conviction, that the credit for tax deducted at source (TDS) and the corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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". 6. The relevant rule is 37BA which is reproduced as under: "Credit for tax deducted at source for the purposes of section 199. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by deductor to the income-tax authority or the person authorised by such authority. (2) (i) where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee: Provided that the deductee files a declaration with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. Obviously, the information about the TDS by Ashok Leyland is not denied. Both the sub-rules simply provide for granting of the benefit of TDS. The point of time at which the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the 'credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable‟. It is, ergo, abundantly clear from the mandate of Rule 37BA(3)(i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income of Rs. 84.10 lakh, on which tax of Rs. 8,41,050/- was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. We, therefore, overturn the impugned order and direct accordingly." 7. On the basis of our aforesaid deliberations, we are unable to subscribe to the view taken by the lower authorities that despite the fact that the sales/receipts were accounted for by the assessee during the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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