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TMI Blog2025 (2) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee. Thus, when there is no income being offered qua the corresponding TDS and as TDS is part of the assessee's income, the position being taken by the appellant is a position contrary to its returns. There cannot be a situation that the principal income corresponding to the TDS as claimed, is not offered for assessment as a NIL return is filed, however, merely the benefit of TDS income is claimed.
This would be contrary to the provisions of Section 198 which provides that the tax deducted at source would be the income received. Admittedly in the present case, for the Assessment Year in question, independent tax returns have been filed by the assessee as also by the ISPL. Thus, such incongruence and a position contrary to the return of the appellant goes contrary to the provisions of Section 198 read with Section 199 of the Income Tax Act. Decided in favour of the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... income. The AO had completed the Assessment under Section 143 (3) of the Act, determining the income as 'Nil'. By an Order dated 30th December, 2008, the AO while completing the Assessment, did not give credit for TDS amounting to Rs.30,10,549/-. 7. Being aggrieved by the Order dated 30th December, 2008, the Appellant preferred an Appeal to the Commissioner of Income Tax (Appeal) [CIT(A)], Mumbai, on 29th January, 2009. The CIT(A) dismissed Appellant's Appeal by an Order dated 8th October, 2009. 8. Being aggrieved by the said Order dated 8th October, 2009 of the CIT(A), Mumbai, the Appellant filed an Appeal before the ITAT, Mumbai on 4th January, 2010. 9. The ITAT, by an Order dated 20th August, 2010 dismissed the Appeal. The Order dated 20th August, 2010 of the ITAT is impugned in the present Appeal. 10. By an Order dated 5th January, 2012 passed by this Court, the Appeal was admitted on the following substantial question of law:- "On the facts and in the circumstances of the case and in law, whether the Income Tax Appellate Tribunal was right in its interpretation of Section 199 and other related provisions of the Act, so as to confirm the action of the Respondent A.O. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come after deduction claimed/ allowed. The Assessee i.e. the Appellant was showing its income as 'Nil'. In other words, for the Appellant, the TDS amount is also not income and the claim of the Appellant is contrary to Section 198 of the Act. 19. Mr. Sharma also submitted that Appellant contends that it has transferred its entire receipt to ISPL. Whether ISPL is a loss making entity and the arrangement between the Appellant and the ISPL is a tax avoidance arrangement, cannot be found out in the absence of the accounts/ returns/ Assessment Orders of ISPL. Mr. Sharma submitted that, in these circumstances, the matter be remanded to the ITAT to record factual findings as to whether the entire receipt of the Appellant is to offer to tax by the ISPL. 20. We have heard learned Counsel for the parties and with their assistance we have perused the record. At the outset, we may observe that the Assessing Officer, the Commissioner (Appeals) as also the Tribunal has held against the Appellant in denying the benefits of the TDS amounting to Rs. 30,10,549/- as claimed by the Appellant on the amounts as alleged to have been received by it on behalf of ISPL. It is not in dispute that the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit for TDS of Rs.30,10,549 which has been upheld by the CIT(A). 9. We find the provisions of sections 198 and 199 of the Income-tax Act, 1961 read as under: "198. All sums deducted in accordance with [the foregoing provisions of this Chapter] shall, for the purpose of computing the income of an assessee, be deemed to be income received: [Provided that the sum being the tax paid, under sub-section (IA) of section 192 for the purpose of computing the income of an assessee, shall not be deemed to be income received.] 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 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 depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. (2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. (3) The Board may, for the purposes of giving credit in respect of tax ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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