Section 199, Rule 37BA – A part of TDS cannot be denied on the ground that the corresponding turnover has not been shown in the assessment year in which credit is being claimed if income relating to such TDS has already been offered for taxation in an earlier assessment year.
Facts
During the previous year the assessee claimed credit for TDS of Rs. 58,22,932 based on the certificate filed. The certificate mentioned gross receipts of Rs. 25,23,31,091. Upon being asked to explain whether these receipts are credited to the current year’s P & L Account, the assessee submitted that Rs. 23,99,32,700 were credited to P & L Account and the balance had already been offered for taxation in the preceding assessment years. The assessee submitted that the credit of TDS was not claimed in the preceding assessment years.
The Assessing Officer held that u/s. 199 credit for TDS has to be restricted to the receipts shown by the assessee. He disallowed proportionate amount of TDS and allowed credit of only Rs. 55,36,798.
Aggrieved, the assessee preferred an appeal to CIT(A) who upheld the action of the AO by observing that Rule 37BA of Income-tax Rules, 1962 provided for such apportionment of TDS to different assessment years in which the income is assessable on proportionate basis.
Aggrieved, the assessee preferred an appeal to the Tribunal.
Held
The Tribunal observed that the revenue authorities have not disputed the claim of the assessee that the balance portion of the turnover was offered to tax in the earlier assessment year. Further, there was no material brought on record to show that the assessee had claimed corresponding TDS relating to the balance portion of the turnover in the concerned assessment years. The entire TDS relating to Rs.25,23,31,091/- was claimed for the impugned assessment year as the TDS certificate relates to the assessment year under dispute. The assessee having not claimed any portion of TDS in the preceding assessment years wherein a part of the turnover was offered to tax, the assessee’s claim of TDS in the impugned assessment year cannot be rejected on the ground that it relates to the turnover which has not been shown by the assessee for the impugned assessment year.
Income relating to such TDS having already been offered to tax in the earlier assessment years and since the assessee has not claimed corresponding TDS in those assessment years, no disallowance of the TDS claimed can be done. As regards reliance by CIT (A) rule 37BA the Tribunal observed that in the first place the said rule is not applicable to the assessment year under dispute as it has been inserted into the statute by IT (Sixth Amendment) Rules 2009 with effect from 1-4-2009. Even if we go by the aforesaid rule, the Assessing Officer was required to give credit to the TDS in the corresponding assessment years wherein the income was so offered which also would have resulted in refund to the assessee.
The Tribunal held that the assessee is entitled to claim credit for the entire TDS amount of Rs.55,22,932/- in the impugned assessment year. The appeal filed by the assessee was allowed.
