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TMI Blog2015 (9) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... o as the Act ). 2. Shri.J.P.Khaitan, Senior Advocate, the Learned AR argued on behalf of the assessee and Shri.D.Banerjee, JCIT, the Learned DR argued on behalf of the revenue. 3. The assessee is a partnership firm engaged in the profession of Advocates and Solicitors. For the Asst Year 2004-05, the assessee firm filed its return of income showing total income of ₹ 42,73,610/- claiming TDS to the tune of ₹ 14,98,887/-. Out of the said TDS, certificates were produced before the Learned AO to the tune of ₹ 12,56,396/- before the completion of assessment proceedings u/s 143(3) of the Act on 11.12.2006. This TDS of ₹ 12,56,396/- admittedly included TDS on advance received, income in respectof such advances were offered to tax in the subsequent year by the assessee in line with the method of accounting regularly employed by the assessee. Accordingly, the Learned AO granted TDS of ₹ 9,60,694/- against the certificates produced in the assessment and thereby not giving credit for TDS to the tune of ₹ 5,38,193 ( 1498887-960694) in the assessment. Later the assessee firm filed a rectification petition u/s 154 of the Act on 28.5.2008 before the Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT) ITA No.1520/Kol/2009 Alipurduar Tea Co. Ltd vs Agricultural ITO reported in 112 ITR 878 (Cal) CWT vs Sharvan Kumar Swarup and Sons reported in 210 ITR 886 (SC) In response to this, the Learned DR vehemently supported the orders of the lower authorities. 3.2. We have heard the rival submissions and perused the materials available on record. We find that the provisions of section 199(3) of the Act read with Rule 37BA of Income Tax Rules would squarely apply in the facts of the instant case. For the sake of convenience, the provisions of section 199(3) are reproduced below:- Section 199(3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary , including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given. For the sake of convenience, the said rule 37BA is reproduced hereunder:- Rule 37BA Credit for tax deducted at source for the purposes of section 199 (4) Credit for ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t edition, page 446, paragraph 191) lays down as follows: Because a change made by the legislator in procedural provisions is expected to be for the general benefit of litigants and others, it is presumed that it applies to pending as well as future proceedings. We also find that the case law relied upon by the Learned AR in the case of Alipurduar Tea Co. Ltd vs Agricultural ITO reported in 112 ITR 878 (Cal) is well placed , wherein it was held that : Held, that there is a lacuna in the Act in that there is no power in the Agricultural Income-tax Officer to revise his own order where the appellate order income-tax assessment is made more than four years after the date of the original assessment. No tax which is not leviable by the authority of law should be collected or realized by the State and, if realized by the State, should be refunded by the State. The scheme of fiscal statutes should be looked at from that point of view and, in case of injustice, the court should ensure that such injustice is rectified as far as practicable unless the same is contrary to the expressed legislative intent. The legislative intent manifested in the scheme of the Act is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 203 in the assessment made under this Act for the assessment year for which such income is assessable. Hardship is being faced by the assessee since in many cases certificates under section 203 are not furnished to them and as a result credit is not given for the tax so deducted. With a view to mitigate this hardship, it is proposed to insert a new sub-section (14) in section 155 to provide that where in the assessment for any previous year or in any intimation or deemed intimation under sub-section (1) of section 143 for any previous year, credit for tax deducted in accordance with the provisions of section 199 has not been given on the ground that the certificate furnished under section 203 was not filed with the return and subsequently such certificate is produced before the Assessing Officer within two years from the end of the assessment year in which such income is assessable, credit of TDS shall be given to the assessee on production of such certificate. Nothing contained in the proposed sub-section shall apply unless the income from which tax has been deducted has been disclosed in the return of income filed by the assessee for that assessment year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly available under the Statute. Assessee's income for which tax is deducted at source should not be refused to be given credit. Being a case of direct tax, there is also no question of unjust enrichment being claimed so as to take the credit of tax without an obligation to return the same to the assessee. The payer does not pay the amount of TDS as his own liability and he only acts as the agent of the Government or as trustee to collect the TDS for the Government, free of cost. If no credit is to be given to the payer and/ or to the payee, the Government would have no authority to treat the same as tax and article 265 does not empower the Government to make any levy or collection of tax not authorized by law. There may be cases in which the assessee is not in a position to have the records and make complete claim of credit for TDS due to many factors beyond his control, therefore, provisions relating to time-limit for claiming credit of TDS should also be liberally construed. If the tax due to the Government is not. barred by limitation for collection or recovery, the refund of TDS due to the assessee should not be equally hit by any bar of limitation nor should there be any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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