2013 (10) TMI 1119 - AT - Income Tax

Tribunal directs AO to grant TDS credit, interest on interest to assessee.

CITICORP FINANCE (INDIA) LTD Versus ADDL COMMISSIONER OF INCOME TAX

The Tribunal allowed the appeal, directing the Assessing Officer to grant the assessee credit for tax deducted at source based on valid certificates or ... Credit for TDS - The credit of TDS has been denied to the assessee on the ground that the claim for TDS was no reflected in the computer generated form 26AS – Held that:- Reliance has been placed on the judgment of Hon’ble High Court of Bombay in case of Yashpal Sahwney Vs. DCIT [2007 (7) TMI 7 - HIGH COURT , BOMBAY], wherein it was held that even if the deductor had not issued TDS certificate, the claim of the assessee has to be considered on the basis of evidence produced for deduction of tax at source as the revenue was empowered to recover the tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government – Reliance has also been placed on the judgment of Hon’ble High Court of Delhi in case of Court On Its Own Motion Vs. CIT [2013 (3) TMI 316 - DELHI HIGH COURT], wherein the court has directed the department to ensure that credit is given to the assessee, where deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond – Decided in favor of Assessee. Grant of interest on delayed payment of interest – Held that:- Relying upon the judgment in the case of Sandvik Asia Ltd. Vs. CIT and others [2006 (1) TMI 55 - SUPREME Court], it has been held that, in case the assessee has paid excess advance tax or excess TDS, the assessee is liable for refund with interest and in case the interest is not granted on the due date, the assessee is liable for further interest on interest – Decided in favor of Assessee. Issues:1. Dispute regarding credit of TDS for assessment year 2007-08.2. Allowability of interest on interest u/s 244 of the Income Tax Act.Detailed Analysis:1. The dispute regarding credit of TDS for the assessment year 2007-08 arose when the assessee claimed total TDS of Rs. 215163912, with subsequent claims made in the original and revised returns. The Assessing Officer (AO) only allowed credit of TDS amounting to Rs. 118,960,393, leading to an appeal by the assessee. The CIT(A) directed the assessee to provide all TDS certificates for verification by the AO. The assessee argued that TDS credit should be based on certificates or evidence furnished by the assessee, citing judgments by the Hon'ble High Courts of Bombay and Delhi. The Tribunal, after considering the matter, emphasized that credit for TDS should be given based on valid TDS certificates or evidence provided by the assessee, even if the deductor failed to upload correct details in Form 26AS. The Tribunal modified the CIT(A) order and instructed the AO to grant the credit of tax deducted at source to the assessee accordingly.2. The second issue involved the grant of interest on interest. The assessee claimed entitlement to interest on excess tax paid, citing the judgment of the Hon'ble Supreme Court in a specific case. The Tribunal noted that in cases where the assessee paid excess advance tax or TDS, they are eligible for a refund with interest. Failure to grant interest on the due date would result in further interest on the interest due, as per the Supreme Court's ruling. Consequently, the Tribunal directed the AO to allow the assessee interest on interest as per the law and the Supreme Court's judgment cited.In conclusion, the Tribunal allowed the appeal of the assessee, addressing both the issues of TDS credit and the grant of interest on interest in a comprehensive and legally sound manner, ensuring adherence to relevant legal precedents and provisions.