2014 (1) TMI 539 - AT - Income Tax

Denial of Credit for TDS u/s 40(a)(i) of the Act Held that - The assessee is not justified in claiming credit for TDS credited during the period 25th April, 2006 to 20th July, 2006 - However, upon proving before the AO that it pertains to A.Y. 2007-08, assessee is entitled to claim deduction in the next year - the assessee is directed to make a claim in the year in which it is allowable Decided against Assessee.

Summary

Issues:
Claim for TDS credit in incorrect assessment year.

Analysis:
The appeal was filed by the assessee company for the assessment year 2006-07. The TDS certificate indicated that the amount was credited between April 25, 2006, and July 20, 2006, which did not fall within the financial year 2005-06 relevant to the assessment year 2006-07. The contention was that credit for TDS should have been granted for an amount of Rs. 29,72,985. Alternatively, it was argued that the Assessing Officer (AO) should have been directed to allow the TDS credit in the subsequent year, i.e., assessment year 2007-08.

The counsel for the assessee mentioned that after the disallowance of the TDS claim for the relevant year, an application was made before the AO for the assessment year 2007-08, which was pending. The Departmental Representative (D.R.) had no objection to directing the credit for TDS in the year of payment, provided a proper claim was made as per the law.

The tribunal held that the assessee could not claim credit for TDS credited between April 25, 2006, and July 20, 2006, for the assessment year 2006-07. However, if it could be proven to the AO that the TDS pertained to the assessment year 2007-08, the assessee was entitled to claim the deduction in the subsequent year. The assessee was directed to make the claim in the appropriate year, and the AO was instructed to consider the application and dispose of it according to the law. Consequently, the appeal filed by the assessee was dismissed, and the order was pronounced on April 1, 2013.