By C. N. Vaze Shailesh Kamdar, Chartered Accountants
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4 (2007) 109 TTJ (Chd.) (TM) 445
Pradeep Kumar Dhir v. ACIT
ITA No. 798 (Chd.) 2006
A.Y. 2003-04. Dated : 27-4-2007
S. 199 of the Income-tax Act, 1961 — Credit for TDS is to be
given to the assessee in the assessment year in which the corresponding income
is assessable. If only a portion of income is found assessable in the relevant
assessment year, credit has to be allowed only on that portion on pro-rata basis
and the credit for the balance TDS is to be allowed only in future when the
remaining income is assessable.
The assessee was following cash system of accounting. The
Assessing Officer and the CIT(A) held that the credit for TDS was allowable only
with respect to the income which was assessable for this year and not the entire
amount of TDS claimed by the assessee as per the TDS certificates.
The Third Member, relying on the decisions in the following
cases, also confirmed the order of the lower authorities :
(a) Smt.Varsha G. Salunke v. Dy. CIT, (2006) 101 TTJ
(Mum.) (TM) 703
(b) Tej Ram v. ITO, (2005) 92 TTJ (Chd.) 1185/(2005)
93 ITD (Chd.)
The Third Member noted as under :
(1) Important conditions for getting benefit of TDS as per
S. 199 are :
(a) The assessee should produce the certificate for the
amount of TDS.
(b) The assessee should show that income subjected to TDS
is disclosed in the return of the assessment year as ‘assessable’.
Both the abovementioned conditions are to be satisfied.
(2) Therefore, the assessee will not be entitled to have
benefit or credit for the amount, though mentioned in the certificate for the
assessment year, if income relatable to the amount is not shown and is not
assessable in that assessment year. If instead of entire income referable to
amount of tax deducted, only a portion of income is found assessable, the
benefit has to be allowed only on the portion shown. If balance income on
account of system of accounting followed by the assessee or for some other
reason is found to be assessable in future, then the credit for the balance
TDS can be allowed only in future when income is assessable.
(3) The CBDT Circular No. 5 of 2001, dated 2nd March 2001
also supports the view that where tax is deducted from the amount which is
liable to be assessed and spread over more than one financial year, credit
shall be allowed for TDS on pro-rata basis and in the same proportion
in which such income is offered for taxation in different assessment years.
