9911796707
TMI Blog2023 (6) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor, i.e., Tata Power Company have refused to issue certificate or rectify the form and when assessee had made specific request, then instead they stated that they are not in a position to issue TDS certificates in favour of the assessee based on AAR order which is applicable to AEML and RInfra who are party to it. Instead Tata Power Company have requested AEML to get directions from the Income Tax department asking TPC to issue TDS certificate in favour of RInfra. When the same was done, then again officials from Tata Power Company stated that they have already made the payment to AEML, deducted and deposited the tax thereon and filed the TDS return accordingly and if a revised TDS return is filed and a revised TDS certificate in favour of Rinfra would be issued, they would receive queries from the Income tax department resulting in unnecessary litigation. They suggested alternatives to the assessee in their email, that AEML may declare in their return of income that TDS pertains to Rinfra and Rinfra may claim TDS in their assessment following the provisions of section 199.Rinfra/ AEML may approach the AO/CIT(TDS) for Issue of direction to TPC for issue of revised TDS certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeals the common ground raised reads as under:- On the facts and in the circumstances of the case and in law, did the Ld. CIT (A) err in allowing the appeal of the assessee to grant the claim of TDS to a person other than the deductee as per section 199(3) of the Act wherein the section 199(3) is to be read with rule 37BA of the Act in such cases and the conditions mentioned in rule 37BA for such cases i.e. proviso of rule 37BA (2)(1), rule 37BA(2)(ii) and 37BA(2)(iii) were not full filled 2. The brief facts are that the assessee has claimed TDS credit of Rs.68 Crores in the revised return of income filed on 27.05.2021. The return was processed u/s 143(1) vide Intimation dated 08.06.2022 wherein credit for TDS of Rs. 40.43 crore was not granted. 3. The TDS credit of Rs. 40,42,92,666 which has not been granted by the CPC is in respect of the tax deducted by Tata Power Company Ltd. (TPC) on payment made to Adani Electricity Mumbai Ltd. (AEML) having PAN - AADCD0088F. The TDS credit for the same is appearing in Form 26AS of AEML. The TDS credit has been claimed by the assessee in its original as well as revised return of income. The claim of TDS credit in respect of AEML was revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,666 deducted by TPC to the Appellant as it was appearing in Form 26AS of AEML. Here, the subsequent treatment of this TDS amount is important to arrive at the decision. AEML in their return of income for AY 2020-21 has transferred the TDS credit to the Appellant in accordance with the procedure prescribed in the form of return of Income. Thus AEML has not claimed credit for Rs.40,42,92,666 appearing in their Form 26AS and has transferred the same to the PAN of the Appellant in their return of income. The copy of acknowledgment of ITR of AEML along with transfer of TDS to the PAN of appellant has been furnished by appellant in the reply and is reiterated here. 6. The ld. CIT DR submitted that, when there is a proper procedure laid down and there is a requirement under Rule 37BA, then same should be complied with, so that the TDS credit is available to the assessee. She further submitted that now process of requirements of Rule 37BA cannot be bypassed. She requested the bench that Tata Power Company should be directed to revise their TDS return substituting the Name and PAN of the assessee in place of AEML so that the credit of TDS is reflected under the PAN of the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borne out from the copy of acknowledgement of income tax return of AEML alongwith transfer of TDS to the PAN of the assessee which is evident from the record in the return of income showing transferring the credit to the PAN of the assessee as noted by the ld. CIT (A) above. 9. Not only that, AEML have even applied for ruling before Authority for Advance Ruling (AAR) clarifying in whose hands pending Regulatory Assets under Approval which also includes amount received from TPC will be taxable. The AAR categorically held that income so received by AEML is taxable in the hands of the assessee on principle of diversion by overriding title. The CIT of AEML had also filed the report with the AAR that the income does not belong to AEML but it is taxable in the hands of the assessee. Thus, there is no dispute that this income belongs to the assessee and is taxable in the hands of the assessee. Accordingly, the corresponding TDS on the said income is to be allowed in the hands of the assessee. 10. The provision of Section 199(1) reads as under:- 199(1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment, shall be given for the assessment year for which such income is assessable. (ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. 12. Thus, Sub-Rule (2) provides that, if whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee. Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax given to the person whom payment has been made or credit has been given. The case of the ld. CIT DR is that this procedure has not been followed by the assessee as provided in the Rule 37BA(2) and therefore, tax credit is not allowable and accordingly, the ld. AO is justified in denying the credit of TDS and on that ground, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a position to issue TDS certificates in favour of the assessee based on AAR order which is applicable to AEML and RInfra who are party to it. Instead Tata Power Company have requested AEML to get directions from the Income Tax department asking TPC to issue TDS certificate in favour of RInfra. When the same was done, then again officials from Tata Power Company stated that they have already made the payment to AEML, deducted and deposited the tax thereon and filed the TDS return accordingly and if a revised TDS return is filed and a revised TDS certificate in favour of Rinfra would be issued, they would receive queries from the Income tax department resulting in unnecessary litigation. They suggested the following alternatives to the assessee in their email, the copy of which has been filed before us: AEML may declare in their return of income that TDS pertains to Rinfra and Rinfra may claim TDS in their assessment following the provisions of section 199. Rinfra/ AEML may approach the AO/CIT(TDS) for Issue of direction to TPC for issue of revised TDS certificate in the name of Rinfra. 16. To the above alternatives suggested by TPC Officials, Rinfra Official vide email dated 19.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
