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TMI Blog1992 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was under contract with SAIL for Supervision, Erection and Commissioning of bokaro Power Plant. SAIL made certain payments under the contract to the assessee and while doing so, retained part of the amount towards the income-tax, from out of the payments credited or paid to the appellant company. SAIL, therefore, issued a certificate of deduction of tax under section 203 of the Act to the assessee. The amount that was deducted towards income-tax was Rs. 3,41,896. The assessee filed its return of income at nil, but, in part II of the form of the Return of Income, it indicated the fact of deduction of tax by SAIL and that, it was claiming the credit for the same in its assessment. The Assessing Officer completed the assessment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of tax deduction, but, his objection in the order is that, the credit has to be allowed in the assessment year following the year of deposit. He contended that, the word 'paid' appearing in section 199, is only to emphasize that, the employer must pay the tax into the Treasury. He submitted that, in section 203 of the Act, there is nothing to indicate that, the certificate of tax deduction has to be issued only when, the tax has been deposited into the Treasury. He submitted that, section 203 postulates that, as soon as the amount due is either paid or credited to the account of the payee, the employer is duty bound to deduct the tax and within a reasonable time thereafter, issue the certificate of tax deduction. He submitted that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed of tax, that, has not been paid into the Treasury. She pleaded that in the instant case, the tax having been paid into the Treasury onMay 14, 1982, the credit for tax could only be given in the assessment year following the year of payment. She drew our attention to the provisions of sections 199, 198 and 203 of the Act. 6. We have given our very careful consideration to the rival submissions. The crux of the issue is the intent in the section 199 of the Act, according to which, the assessee who, submits the certificate of tax deduction, is allowed credit on the assessment of his income. The Legislature had provided in the Act, various modes of voluntary compliance of payment of tax, and one of them, is the deduction of tax while ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of the tax wrongly deducted by the contractor or employer, but, the only way that is open to the contractee is to claim credit for the tax deducted, in his assessment. It can therefore be appreciated that, the Contractee can only ask for issuance of a certificate of tax deduction, for obtaining credit for the same in his assessment. The said section 199 is only intended to allow credit for the tax deducted in the hands of the person, from whose income, the Contractor had deducted the tax. 8. Section 199 of the Act has two limbs. The first limb provides that, any deduction of tax made under sections 192 to 194, 194Ato 194E, 195,196A and paid to the Central Government shall be treated as a payment of tax on behalf of the person fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary, but, the condition still remains that, it should have been paid to the Central Government. This part in our view, is only intended to ensure that, the credit for tax stated to have been deducted is in fact paid into the Treasury. Since tax deducted amount of Rs. 3,41,896 has been paid to the Central Government, It has to be taken to mean that there is satisfaction of the first limb of section 199 of the Act. We are therefore, of the opinion that, CIT was not justified to hold that, credit could be given only in the assessment year following the year of actual deposit of the tax with the Central Government. 10. As far as the giving credit for the tax deducted at source is concerned, it has to be related to date of giving of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case and deserves only to be quashed. We accordingly, set aside his order. 13. The question of challenge of jurisdiction of CIT to decide on a different ground from the one proposed by him, in our view could be challenged during the course of arguments, though, no ground has been so specifically taken by the assessee. In CWT v. N.A. Narielwalla [1980] 126 ITR 344, the Bombay High Court had held that the assessee could raise the point of jurisdiction before the Tribunal, vhich was not taken up before the lower authorities. We therefore, give our conclusions on the point of jurisdiction. 14. The reading of the notice of the CIT clearly indicates that, his objection for allowing of the credit for the tax deducted at sou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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