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TMI Blog2007 (8) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... e given to the firm and not to the partners ? 2. Whether, on the facts and in the circumstances of the case, if the credit for the entire tax was not to be given to the partners, if there was any tax deducted at source remaining unabsorbed after meeting the tax liability of the firm, whether such tax should be apportioned among the partners and credit for such tax should be given to them in their individual assessments ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Commissioner (Appeals) cannot entertain an appeal with regard to the quantum/waiver of the interest levied under section 139(8) and 217(1A) of the Income-tax Act, 1961 ? 2. The assessment years relevant herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were contained in Section 199 of the Act and Rule 30A of the Income Tax Rules, 1961. The said provisions, to the extent relevant for the purpose herein, read thus : "Credit for tax deducted. 199. Any deduction made in accordance with the provisions of sections 192 to 194, section 194A, Section 194B, Section 194BB, section 194C, section 194D and section 195 and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment (including a provisional as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; (viii) ------- (ix) ------- (x) -------- (2) The credit referred to in sub-rule (1) shall not be given unless the person entitled to such credit furnishes to the Income-tax Officer a declaration in Form No.15B made by him and the shareholder concerned, together with a certificate of deduction of tax at source in Form No.19." 9. Mr.Mistry, learned counsel appearing on behalf of the assessee submitted that in the present case, admittedly the shares from which dividend income was earned stood in the name of the assessee, TDS certificates issued by the company stood in the name of the assessee and moreover, admittedly the dividend income has also been assessed in the hands of the assessee. He submitted that the first prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of any of its partner, then credit of TDS shall be given to the firm and not to the partner in whose name the share stands. Accordingly, Mr.Rao submitted that there is no infirmity in the orders passed by the authorities below and the questions referred by the Tribunal be answered in favour of the Revenue. 11. We have carefully considered the rival submissions. Under Section 199 of the Act, credit of Tax deducted at source from the dividend income and paid to the Central Government is given to the share-holder. However, the First proviso to Section 199 carves out an exception to the above principle. In this case, we are concerned with clause (ii) to the first proviso to Section 199 of the Act. The said clause provides that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee falls in the first part of Section 199 of the Act, the assessee could not be denied credit of TDS by invoking the first proviso to Section 199 of the Act read with Rule 30A of the Income Tax Rules. 13. The fact that the Tribunal in the A.Y. 1974-75 has denied credit of TDS to the assessee /shareholder and the assessee has not challenged the same would not make any difference. Moreover, it is not known as to whether, in A.Y. 1974-75 the dividend income was taxed in the hands of the firm or the partners. Nothing is brought to our notice that in A.Y. 1974-75 the dividend income taxed in the hands of the firm. However, in the present case, admittedly the dividend income taxed in the hands of the assessee/shareholder. Therefore, denial of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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