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Sadbhav Engineering Ltd. vs. Dy. CIT (ITAT Ahemdabad)

The brief facts of the case are that the assessee claimed credit for TDS of Rs.1,73,52,062/- for the AY 2006-07 and Rs.2,25,09,037/- in AY 2007- 08 which was not allowed by the AO on the ground that the income in respect of the said TDS was not shown by the assessee in view of the provisions of section 199 of the Act. The ld.CIT(A) also confirmed the same.

The AR of the assessee submitted that the issue is now covered in favour of the assessee by the decision of Hon’ble Visakhapatnam Bench of the Tribunal in ITA No.324/Vizag/2009 for AY 2006-07, dated 03/03/2011 in the case of ACIT vs. Peddu Srinivasa Rao. The ld.DR for the Revenue supported the orders of the authorities below.

 We find that the 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 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 u/s 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 “for 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 the year in which the credit of TDS is to be claimed. As per amended provisions of section 199, in sub-section 1, it has been stated that any deductions 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. Therefore, as per the amended provisions, once the TDS was deducted, a credit of the same to be given to the assessees, irrespective of the year to which it relates. The pre-amended and the amended provisions of section 199 are extracted hereunder:

“Section 199: Credit for tax deducted – (1) 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 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:

(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 such credit may be given.

Section 199. (1) 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 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.”

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.

SOURCE-

Sadbhav Engineering Ltd. vs. Dy. CIT (ITAT Ahemdabad),  ITA Nos.610/Ahd/2008, 1834&2054/Ahd/2009, 1835&2055/Ahd/2009 and 2053/Ahd/2009, AYs –2005-06, 2006-07, 2007-08 & 2005-06 respectively, Date of Pronouncement : 19/12/2013

Download Full Text of the Judgment – Sadbhav Engineering Ltd. vs. Dy. CIT (ITAT Ahemdabad),

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