2007 (9) TMI 435 - AT - Income Tax

Summary

Issues:
- Dispute over non-granting of credit for TDS on salary and professional fees for the assessment year 2002-03.

Analysis:
1. The dispute in this case revolves around the non-granting of credit for TDS on salary and professional fees for the assessment year 2002-03. The assessee, who was employed by two different companies, faced challenges in obtaining TDS certificates from the employers. The Assessing Officer did not allow the credit for TDS while issuing the intimation under section 143(1), leading to an appeal before the CIT(A) by the assessee.

2. The CIT(A) requested the assessee to provide TDS certificates, but the assessee could not produce them. The assessee argued that as per section 205 of the Income-tax Act, once tax is deducted at source, it cannot be recovered from the assessee again. The CIT(A) re-examined the issue but could not grant relief due to lack of evidence. However, the CIT(A) directed the Assessing Officer to verify TDS deductions with the TDS Wing and consider reducing corresponding receipts if TDS credit could not be granted.

3. Both the assessee and the revenue objected to the CIT(A)'s findings. The assessee demanded full credit based on bank statements and payslips, while the revenue objected to treating net receipts as gross receipts for tax liability determination.

4. During the hearing, the assessee's counsel presented Form No. 16, payslips, and bank statements to support the claim that TDS was regularly deducted and credited to the bank account. The Revenue argued that the onus was on the assessee to prove TDS deductions by providing certificates or other evidence.

5. After considering the submissions and evidence, the Tribunal found that TDS was likely deducted based on payslips and bank statements, but conclusive proof was lacking. The Tribunal upheld the CIT(A)'s direction to verify TDS deductions and recover from defaulting employers. The Tribunal also supported the CIT(A)'s directive to treat net receipts as gross receipts for tax liability if necessary.

6. In conclusion, the Tribunal dismissed the appeals of both the assessee and the revenue, confirming the CIT(A)'s order. The decision highlighted the importance of verifying TDS deductions, recovering from defaulting employers, and considering net receipts for tax liability in cases where TDS credit cannot be conclusively proven.