Allowed

M/s. TaherAli Industries and Projects, (P) Ltd., v. The Asst. Commissioner of Income Tax

Telangana HC6 Dec 2023WP/4290/2006

Case brief

AI extract

What is this about?

The High Court allowed a writ petition challenging an order rejecting TDS certificates submitted by a joint venture. Relying on a Division Bench decision, the Court quashed the rejection and remanded the matter to the Assistant Commissioner to grant credit for TDS certificates.

What did the court decide?

The writ petition was allowed; the impugned order dated 14.11.2005 setting aside denying TDS credit was quashed and the matter remitted to the Assistant Commissioner of Income Tax to pass appropriate

M/s. TaherAli Industries and… — Constitutional and Fundamental Rights | Telangana HC (2023)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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WEDNESDAY, THE SIXTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HON'BLE SRI JUSTICE P.SAM KOSHY AND

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THE HON'BLE SRI JUSTICE N.TUKARAMJI

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wRlT PET|TION NO.4290 0F 2006

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Between:

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M/s. TaherAli lndustries and Projects, (P) Ltd., rep. by its Director, Mr.M.M. Rahman, S/o. Taher Ali, 6-3-1089/1, Block No. 1O2, 1O3 and 301 , Pavani Avenue, Gulmohar Avenue Lane, Adjacent to Villa Mary Girls College, Rajbhavan Raod, Somaj(;uda, Hyderabad.

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...PETITIONER

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AND

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The Asst. Commissioner of lncome Tax, Circle No.ll(3), Hyderabad, A.P.

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The Commissioner of lncome Tax, Hyderabad{1, Hyderabad, A.P.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ, order or direction more particularly in the nature of Writ of Certiorari after calling for the entire connected and relevant records relating to T- 50/AC.2(3), dt. 14.11.2005 issued by the Assistant Commissioner of lncome Tax, Circle-ll (3), Hyderabad to quash the same denying the credit for TDS Certificates submitted in the name of all individual members of the Joint Venture by holding that the impugned letter/communication is illegal, arbitrary, without authority^of law as contrary to Section 199 of the^{Income Tax Act, 1961 and without} jurisdiction in as much as the other members of the Joint^{venturehavealready} issued Disclaimer certificates^{in respect of the two TDS Certificates bearing Nos.} 017-B for Rs. 25,75.866/-^{and 682-8 for Rs. 58,39,573/- attributable to the credit} of the amounts^{receivedby the Petitionerand also by holding that the Joint} Venture/consortium^{consistingof the lndividual members (companies) for better}

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understanding, collaboration and cooperation to complete the contract without any intention to produce income to be shared amongst themselves as not falling within the expression of association of persons and consequently direct the 1st respondent to allow the credit of the two TDS certificates to the credit of the Petitioner company on the basis of the intimation of assessment completed including the amounts received from the Joint venture project and issue appropriate proceedings thereof in accordance with law.

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l.A. NO: 1 OF 2006(WPMP. NO: 5384 OF 2006)

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Petition under section^'l s1 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased direct the I st respondent not to take or initiate any action for recovery of any lncome Tax relating to the assessment year 2oo4-2oos pending disposal of the writ or else the petitioner would suffer serious loss and double taxation.

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lA NO: 1 OF 2019

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Petition under Section 15'l cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to permit the petitioner to file this affidavit and the correct particulars may be taken on record.

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lA NO: 2 OF 2019

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Petition under Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to direct posting of the above writ petition for orders and may be preased to dispose of the writ petition in terms of the Judgment of the Hon,bre A.p. High court reported in 357 ITR 396.

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Counsel for the petitioner: SRt SHAIK JEELANI BASHA SRI Y. RATNAKAR

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Counsel for the Respondents: M/s. SUNDARI R PASUPATHI, SENIOR STANDTNG COUNSEL FOR INCOME riX OCPNRTUETT

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The Court made the foflowing: ORDER

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THE HON'BLE^{SRI JUSTICEP.SAMKOSHY} AND

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THE HON'BLE^{SRI JUSTICE N.TUKARAMJI}

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WRIT PETTTIO^{N No.4290 ot2O06}

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ORDER:(per^{fltr n'ble Sri Jttstice P.SAMKOSHY)}

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Heard Mr.Shaik^{Jeelani Basha, leamedcounsel for the petitioner} and Ms.Sundari R.^{Pasupathi, leamed StandingCounsel for the} respondent.Department.Perusedthematerialavailableonrecord.

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2.Thiswritpetitionisfiledassaitingtheorder,datedt4.ll.2005of respondent^No. I^{wherebyrespondentNo'I has rejected the TDS} certificate submitted^{by the petitioners in the name of joint venture'}

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Today,^{whenthe matteris taken up for hearing, leamed counselfor}

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thepetitionerdrewtheattentionofthisbenchtothedecisionrendered by the unified^{AndhraPradeshHigh Court as it then was in the case of} Commissioner^{of IncomeTaxv. Bhooratnamand Companyt decided} on 2l^. 1¹ .2012.^{The said appealsi'e', ITTANos' I I 7 and222 of 2012'} wherein the revenue^{had challenged the decisionof the Commissioner} of Income Tax^{appeals,which had allowed appeals of the assessee} holding that^{the partnersin the jointventurehaving his own share of} workwasentitledtogettheTDScertificatesubmittedinthenameof

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'lzor:l^{:sz trn:gs(nP)}

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In Tikaram and Sons Lrd. V. CST [tg6BJ 22 STC 308 (SC) it was held that alterations in rhe form of procedure are always retrospective, unless there is some good reason or other v,hy they should not be. The amendment to rule 37 BA menlioned above which has been introduced by the lncome Tax (Eight Amendment) Rutes, 201 t, notifred, vide Noti.fication NO 57 of 20t l, dared Ocrober 21, 2011 being procedural in nature, would have retrospeclive efect and has to be given efecl to.

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The Revenue cannot be allowed lo relrqin rax deducted at source without credit being available to anybody. If credit of tax is not allowed to rhe assessee and the joint venture has not filed a return of income then credil of the TDS cannot be taken by anybody. This is not the spirit and intention of law.

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Therefore, in our view, the Assessing oficer erred in denying the benefit of the TDS mentioned in the TDS certi,ficarcs rtled by the assesses on the ground that rhe TDS certificote is issued in the name of the joint venture or a director and not the assrrsee.

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The factual matrix of the present writ petition is similar, if not identical arising out of the same joint venture and for the same ; assessment year i.e., 2004-05, we see no good reason why the view of the Division Bench rendered in the case of Bhoorotnam and Company supra should not be endorsed by this Court.

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Accordingly, the present writ petition for the reasons rendered by the Division Bench of this Court in an identical marter i.e., in the case

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of Bhooratnam and Company^{supra, deserves to be and is accordingly} allowed and the impugned^{order, dated14. 11.2005 passed by} respondent No.l^{is set aside and the matter stands remitted backto} respondent No.1 for^{passingappropriateorders accepting TDS} certificate fumished^{by the petitionerin the nameof the joint venture'} While taking appropriate^{decision, respondent No'l shall also keep in} mind the decision^{of the High Court in the case of Bhooralnamand}

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Company supra^{decided by the Division Bench of this Courtunder} identical set of facts.

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Accordingly,^{this writ petitionis allowed.No order as to costs}

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7 As a sequel, miscellaneous^{applications pendingif any in this writ}

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petition, shall stand closed.

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That Rule Nisi has been made absolute as above. Witness the Hon'ble the Chief Justice ALOK ARADHE on this Wednesday, The Sixth Day of December, Two Thousand and Twenty Three.

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SD/. MOHD. SANAULLAH ANSARI ASSISTANT REGISTRAR \r'

//TRUE COPY//

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