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Appellate Tribunal directs tax assessment in India, grants credit or refund. Income Tax Act and Rules followed. The Appellate Tribunal set aside the decision of the Ld. CIT(A) and directed the assessing officer to determine the taxability of the income in India. If ...
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Appellate Tribunal directs tax assessment in India, grants credit or refund. Income Tax Act and Rules followed.
The Appellate Tribunal set aside the decision of the Ld. CIT(A) and directed the assessing officer to determine the taxability of the income in India. If taxable, the tax credit should be granted; if not, a refund of Rs 3,93,375/- should be issued. The assessing officer was instructed to follow the Income Tax Act and IT Rules, ensuring the assessee is given a hearing. As a result, both grounds of appeal were allowed, and the order was pronounced on 29.05.2023.
Issues involved: Violation of Principles of Natural Justice, Non-grant of TDS Credit
Violation of Principles of Natural Justice: The appeal was filed by the assessee against the appellate order passed by the Ld. Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The assessee contended that the Hon'ble CIT(A) erred in not granting any opportunity of personal hearing, which led to a violation of principles of natural justice. The appellant sought for the order of Hon'ble CIT(A) to be held as bad in law and quashed due to this violation.
Non-grant of TDS Credit: The assessee, a company incorporated in China, claimed a tax deduction at source credit of Rs 3,93,375/-, which was reflected in form no 26AS. However, the Ld. CIT(A) held that the tax credit is allowable only in the assessment year in which the corresponding income has been offered to tax. As the income of Rs 182,09,865/- received from Bangalore Metro Rail Corporation Ltd. was not offered for taxation in that year, the tax credit was not allowed. The appeal of the assessee on this ground was dismissed.
The Appellate Tribunal, after considering the contentions of both parties, found that the income in question was not offered for taxation in the relevant year. Therefore, the issue was set aside back to the assessing officer to determine the taxability of the income in India. If the income is taxable, the tax credit should be granted for that year; if not taxable, a refund of Rs 3,93,375/- should be issued to the assessee. The assessing officer was directed to proceed in accordance with the provisions of the Income Tax Act and IT Rules, ensuring the assessee is given an opportunity of hearing. Consequently, both grounds of appeal raised by the assessee were allowed with the above direction.
In conclusion, the appeal of the assessee was allowed for statistical purposes, and the order was pronounced in the open court on 29.05.2023.
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