ABB AB C/o ABB India Ltd. v. Dy. CIT [IT(I.T.)A
Nos. 464/Bang/2018 & 2878/Bang/2019, dt. 31-8-2020] : 2020 TaxPub(DT) 3538
(Bang-Trib.)
Refund of taxes arising out of MAP -- Credit of taxes
arising by way of TDS -- Reading of section 199
Facts:
Assessee a Swedish resident had done a project for Power
Grid Corporation of India with onshore and offshore deliveries on which TDS was
done by Power Grid while remitting monies outside India. Disputes arose in the
matter of taxability of offshore/onshore contracts and by way of Mutual
Agreement Procedure (MAP) both competent authorities agreed that
offshore/onshore portion was not taxable in India. Thus refund arose for the
TDS deducted. The MAP was signed for assessment year 2013-14 and assessment
year 2014-15. The assessee claimed refund of taxes/TDS for assessment year
2012-13 on the said MAP. Revenue held back the refunds citing section 199 which
read that the credits be granted only if the income was assessable/taxable in
India (as it then stood) and the assessment year also being different refund of
taxes can be granted only coherent to their year of taxability of income.
Aggrieved assessee went in appeal to ITAT -
Held in favour of the assessee that they were entitled to
refund of taxes.
Upheld: Arvind
Murjani Brands (P) Ltd. v. ITO (2012) 21 taxmann.com 131 (Mum) : 2012
TaxPub(DT) 2466 (Mum-Trib)
Editorial Note: The
pre-amended section 199 reads as under --
Section 199. Credit for tax
deducted.--(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
depositor or owner of property or of unit-holder or of the shareholder, as the
case may be, and credit shall be given to him for the amount so deducted on the
production of the certificate furnished under section 203 in the assessment
made under this Act for the assessment year for which such income is
assessable.
Post amended section 199 reads as under --
Section 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.
The revenue's plea was based on the last line of the
pre-amended section "in the assessment made under this Act for the
assessment year for which such income is assessable".
ITAT read against the above plea by concluding that if the
plea of revenue was held workable then it would go contrary to Article 265 of
the Constitution of India. Thus assessee was entitled to refund.