2022 (5) TMI 1430 - AT - Income Tax

Rectification of mistake - tribunal has inadvertently left ground no 9 and 10 un-adjudicated - not granting credit for tax deducted at source (TDS) including credit for which the appellant could not furnish certificates but the payments were received net of taxes and raising a demand in respect of taxes already deducted at source appropriately by the deductor and making a demand of the said taxed which is not in consonance as per provisions of section 205 of the Act - HELD THAT - DR fairly does not dispute the factual element embedded in the plea of the assessee but relies upon the order of the Tribunal nevertheless. Having heard the rival contentions and having perused the material on record we find that an inadvertent error have indeed crept in our order dated 07.04.2021 inasmuch as there was no specific adjudication on the ground no 9 and 10. We therefore we deem it fit and proper recall the impugned order for the limited purposes of disposing of ground no 9 and 10 above. The registry is directed post the matter for hearing on these limited grounds of appeal in the first half of July. Ordered accordingly.

Summary

Issues:
1. Rectification of mistakes in the Tribunal's Order dated 07.04.2021 regarding the assessment year 2008-09.
2. Claim for credit for tax deducted at source (TDS) in Ground Nos. 9 and 10 of the Appeal.
3. Application of section 205 of the Income-tax Act, 1961.
4. Request for recalling the Order for fresh hearing or passing appropriate orders.

Analysis:

Issue 1: Rectification of mistakes in the Tribunal's Order
The applicant pointed out mistakes in the Tribunal's Order dated 07.04.2021, specifically related to Ground Nos. 9 and 10 of the Appeal. The Tribunal inadvertently left these grounds un-adjudicated. The applicant requested the Order to be recalled for the limited purpose of adjudicating upon these two grounds of appeal. The Tribunal acknowledged the error and deemed it fit to recall the order for the specific purpose of disposing of Ground Nos. 9 and 10. The matter was directed to be heard again for the limited grounds of appeal in the first half of July.

Issue 2: Claim for credit for tax deducted at source (TDS)
The applicant claimed credit for TDS in Ground Nos. 9 and 10 of the Appeal, even for items where TDS certificates were not furnished but income was received net of taxes. The applicant argued that demands raised without allowing such credit for TDS were not in line with section 205 of the Income-tax Act, 1961. The applicant referred to relevant provisions and judgments to support the claim that once assessed on a grossed-up basis and receiving only the net amount after TDS, they should not be liable to pay tax again. The Tribunal agreed with the applicant's contention and decided to recall the order for further adjudication on these grounds.

Issue 3: Application of section 205 of the Income-tax Act
The applicant relied on section 205 of the Income-tax Act and relevant Office Memorandum to support their claim that they should not be called upon to pay tax again if the tax was already deducted at the source. The Tribunal found merit in this argument and decided to recall the order to address the applicant's concerns regarding the application of section 205.

Issue 4: Request for recalling the Order
The applicant requested the Tribunal to recall the Order for fresh hearing or pass appropriate orders regarding Ground Nos. 9 and 10 of the appeal. The Tribunal, after considering the arguments presented, allowed the miscellaneous application and decided to pronounce the judgment in open court on 05th May, 2022, after directing a fresh hearing on the specific grounds of appeal.

This detailed analysis highlights the key issues raised in the legal judgment and the Tribunal's decision to recall the order for further adjudication on the specific grounds of appeal related to TDS credit and the application of section 205 of the Income-tax Act.