TaxTMI 
TaxTMI 
2022 (5) TMI 1375
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....d: I. According to the CIT(A), TDS is allowable only to the extent, income is offered as per Section 199 of the Act, read with rule 37BA of the Income Tax Rules, 1962 (hereinafter 'the Rules'). II. The CIT(A) restricting the credit of TDS to the extent claimed in the return of income. III. The Assessee has offered interest income during the year and claimed TDS of Rs. 2,90,623/- as against the total TDS deducted on account of the interest amounting to Rs. 4,20,856/- as per Form No. 26AS. 3. For this, the Assessee has raised the following grounds: 2. The CIT(A) erred in not directing the Assessing Officer to give full credit of Rs. 48,41,750/- as reflecting in Form 26AS but restricting the same to Rs. 41,65,734/- resulting in short credit of Rs. 6,76,016/-. 3. The CIT(A) erred in holding that TDS is allowable only to the extent income is offered as per section 199 of the Act read with rule 37BA. It is submitted that such interpretation is contrary to the provisions of the law and the intention of the statute. 4. The CIT(A) failed to appreciate that post of amendment in Section 199 of the Act, the requirement of income ....
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....- and for the balance TDS credit the CIT(A) directed the Assessing Officer to allow the TDS credit of Rs. 1,31,290/- in the year in which the balance business receipt of Rs. 1,65,11,643/- is offered for taxation. Aggrieved, the Assessee came in appeal before the Tribunal. 5. We have heard the rival contentions and gone through the facts of the case. We noted that the undisputed fact is that the Assessee's total business revenue is at Rs. 19,87,88,005/- which includes the income of future years to the extent of Rs. 1,65,11,643/-. The Assessee has also an interest income of Rs. 42,44,457/- and the TDS portion of interest received is at Rs. 4,20,855/-. The balance TDS credit on Rs. 44,20,895/- is towards the business receipts of Rs. 19,87,88,005/- [which includes the business receipts of future years amounting to Rs. 1,65,11,643/-]. The Assessing Officer and the learned CIT(A) allowed the TDS credit for the portion of interest received at Rs. 4,20,855/- and the TDS credit to the extent of Rs. 42,89,605/- in relation to the business receipts of Rs. 18,22,76,362/- declared by the Assessee in the return of income. 6. Now before us, the learned Counsel for the Assessee explained....
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.... for the Assessee submitted that there are numerous decisions which states that the provisions of the rules cannot overrule the provisions of the Act. He specifically stated that where the provision is omitted in the Act, the requirement of income being offered to assessment, is a condition to obtain credit of TDS, a rule cannot be quoted to deny the Assessee, what the Act has given. The leaned Counsel for the Assessee relied on the decision of the Hyderabad Bench of this Tribunal in the case of Zelan Exports Vs. Deputy Commissioner of Income Tax reported in [2015] 63 Taxmann.com 334 (Hyderabad-Trib.) and the decision of the Hon'ble High Court of Andhra Pradesh in the case of IVRCL-KBL(JV) Vs. The Assistant Commissioner of Income Tax, Hyderabad reported in [2016] 67 Taxmann.com 224 (Andhra Pradesh). 8. In regard to the claim of lesser amount of TDS in the return of income of the Assessee, the learned Counsel for the Assessee relied upon the decision of the Delhi Bench of this Tribunal in the case of Escorts Limited Vs. Deputy Commissioner of Income Tax, Circle - 11(1), New Delhi reported in [2007] 15 SOT 368 (Delhi) and in the case of the Income Tax Officer Vs. Krishraj Hote....
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....ions 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." Further, we noted that Sub-Section (3) of Section 199 of the Act, which is the enabling Section to frame the Rules for the purpose of this section, does not apply in this case. Sub-section (3), post the amendment reads as under: "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. The Rules that may be prescribed include 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 is given. A plain reading of the sub-section makes it clea....
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....once the TDS was deducted, a credit of the same to be given to the Assessees, irrespective of the year to which it relates." 13. Further, the Hon'ble High Court of Andhra Pradesh discussing on the provisions of Section 199(3) of the Act has considered this issue in the case of IVRCL-KBL (JV) Vs. The Assistant Commissioner of Income Tax, Circle - 7(1), Hyderabad (supra) and held as under: "8. While examining the applicability of the Rules, it must be borne in mind that the Rules made by the CBDT, in the exercise of the powers conferred under Section 199(3) of the Act, must be read harmoniously with all the clauses of Section 199 and the other provisions of the Act. It is settled law that Rules, made under the Act, should be interpreted in conformity with the provisions of the Act, (Ispat Industries Limited Vs. Commissioner of Customer [2006] 12 SCC 583), and not the other way around. A rules should be read as supplemental to the provisions of the parent Act. It cannot be interpreted in a manner as to come into conflict with the parent Act, in which case the Act will prevail. (STO, Moradabad Vs. H. Farid Ahmed and Sons [1976] 1 SCC 245). A piece of subordinate legisla....