TaxTMI 
TaxTMI 
2023 (6) TMI 379
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....the appeal filed by the assessee was non-est. (ii). That the learned CIT (Appeal) erred in not holding that the order u/ s 154 for the A.Y. 2001-02 passed by the A. O. reducing the refund by withdrawing benefit of TDS on advance rent received should have been followed through to its logical end by allowing credit in the future year where the assessee was legitimately entitled to such TDS credit. 2. That the learned CIT (Appeal) erred in not holding that it being against principles of taxation and natural justice to recover from the assessee tax amount in excess of amount of that is legitimately due cannot be sustained and therefore erred in not directing the A. O. to pass rectification order allowing refund of the excess t....
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....ent assessment year 2002-03. 6. Briefly stated the facts of the case are that the assessee owns properties which it has leased out to various parties. In respect of the assessment year 2001-02, the assessee had claimed credit for TDS of Rs.54,23,068 /- on rent of Rs.1,56,18,636/-. 7. However, while computing assessable income from house property the income was determined u/ s 22 for the relevant assessment year 2001-02 at Rs.1,01,95,028 /- the difference being on account of rent received in advance to be adjusted in period subsequent to assessment year 2001-02 . Accordingly, as against tax deducted at source of Rs.54 ,23 ,068/- the assessee was allowed credit of tax of Rs. 26,41,956 only (net of adjustment of tax determined on assesse....
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....umstances, it was incumbent on the AO who passed the order u/ s 154 for A.Y. 2001-02 to take it to its logical conclusion by also rectifying the subsequent intimation of CPC and allow benefit of the TDS carried forward from A. Y. 2001-02, which he had not done. The assessee had filed an application in the Grievance Cell seeking redressal but the officer has dismissed its application vide letter dated 24.11.2015 with the remarks that proportionate TDS had already been allowed to the assessee in A.Y. 2001 - 02. 11. What the officer failed to appreciate was that even though for purpose of communication reference was being made to A.Y. 2001-02 (being the starting point), it was the carried forward of claim of TDS which the AO was obliged to ....
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....In the situation mentioned at (a) in para above, difficulty in getting due credit for tax deducted arises because the entire amount of advance rent does not accrue to the assessees as income in one financial year since the income from the property is taxed on the basis of annual letting value whereas the tax is deducted at source on the entire amount of advance rent pertaining to more than one financial year. Therefore, credit for entire amount of tax deducted at source is not allowed in terms of section 199 of the Act because the credit is to be given for the assessment year for which such income is assessable. Thus, the assessees do not get credit for the entire amount of tax deducted at source in the first assessment year, in which part ....
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....ed to in (a) above where advance rent is spread over more than one financial year and tax is deducted thereon, credit shall be allowed in the same proportion in which such income is offered for taxation for different assessment years based on the single Certificate furnished for tax so deducted on the entire advance rent. (ii) In respect of the situation as at (b), credit for the entire balance of tax deducted at source, which has not been given credit so far, shall be allowed in the assessment year relevant to the financial year during which the rent agreement gets terminated/ cancelled or rented property is transferred and balance of advance rent is refunded to the transferee or the tenant, as the case may be." 14. Notwithstan....