Case Law Details
Mukesh Padamchand Sogani Vs ACIT (ITAT Pune)
On going through section 143(1) of the Act, it becomes ostensible that the total income as computed under its clause (a) is considered for computing the amount of tax etc. payable on it as per clause (b). Clause (c) then comes into operation, which provides for determining the amount payable or refundable to the assessee after adjusting the amount of any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable u/s.89 etc. from the amount of tax determined under clause (b). Essence of clause (c) of section 143(1) is to allow adjustment of tax deducted or collected at source or advance tax etc. against the tax liability on total income. Important thing to be borne in mind in this regard is that though the word `paid’ has been used after the words `advance tax’, but it is absent in the context of `tax deducted at source’. The effect of this is that unlike advance tax, the credit for tax deducted at source is to be allowed only when it is deducted and there is no further stipulation of the same having been paid also as a condition precedent. As a sequitur, credit for the amount of tax deducted at source is not dependent upon its subsequent deposit by the deductor. Once there is deduction of tax at source, the benefit of such tax deduction has to be allowed in the hands of deductee u/s 143(1) of the Act irrespective of its subsequent deposit or non-deposit by the deductor.
ITAT find that the requirement for allowing credit is only of the amount of tax deducted at source and not the amount eventually getting deposited with the Government after deduction. Since a sum of Rs.8,21,149/- was duly deducted at source by the employer from the salaries credited/paid to the assessee for the year under consideration, we hold that benefit of such tax deducted at source has to be allowed in Intimation u/s 143(1) of the Act notwithstanding the fact that it was not deposited. The impugned order is overturned pro tanto.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the order dated 09-12-2021 passed by the ld. CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2019-20.
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^”…..unlike advance tax, the credit for tax deducted at source is to be allowed only when it is deducted and there is no further stipulation of the same having been paid also as a condition precedent. As a sequitur, credit for the amount of tax deducted at source is NOT DEPENDENT UPON ITS SUBSEQUENT DEPOSIT Once there is deduction of tax at source, the benefit of such tax deduction has to be allowed in the hands of deductee u/s 143(1) of the Act irrespective of its subsequent deposit or non-deposit by the deductor.”
^ The stated ‘proposition of law’, being well settled for long and unequivocally conceded/requiring to be accepted with no scope for quarrel must equally apply to the indirect tax regime as well. Notwithstanding that under the said regime there is no requirement to pay advance tax ; but compliance with the requirement of TDS or TCS is imposed on the ‘payer’ and is complied with as an agent of the Government / as a representative assessee under the law.
On the stated premise, the several kinds of still ongoing dispute on denial of credit for ‘ITC’ to the recipient of ‘supply’ ought to be put an end to. Must be so done, more particularly even in cases in which such denial is made for a technical or hyper-technical reason as happened in say, the recent instance alluded to by GST law expert , Bimal Jain in his video
*(Edited Comment)