DCIT, CIRCLE - 10(1), NEW DELHI V. HCL TECHNOLOGIES LIMITED, DELHI

ITA 5034/DEL/2024

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against HCL Technologies Ltd. concerning the credit of TDS (Tax Deducted at Source) for the Assessment Year 2017-18. The primary contention was whether the credit of TDS amounting to Rs.7,83,43,252 for the AY 2017-18 was justified without verifying if the corresponding income was offered for taxation. The Assessing Officer (AO) had initially allowed only 32% of the total TDS credit claimed by the assessee, invoking provisions of section 199 read with Rule 37BA. However, the ld. JCIT(A) reversed this decision, leading to the revenue's appeal. The Tribunal dismissed the appeal, referencing earlier decisions in favor of the assessee for similar issues in previous assessment years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474638 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: ITA Nos. 1113/ DEL/ 2017 for AY 2012-13, ITA No. 3221/Del/2017 for AY 2011-12, ITA No. 135/Del/2018 for AY 2013-14
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: ADITYA VOHRA; RETURNING FOLLOWING
• Keywords: TDS
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.5034/Del/2024 (ASSESSMENT YEAR 2017-18) Deputy Commissioner of Income Tax, Circle-10(1), New Delhi Vs. M/s HCL Technologies Limited, 806 Siddharth, 96 Nehru Place, South Delhi-110027. PAN-AAACH9667H (Appellant) (Respondent) Assessee by Sh. Aditya Vohra, Adv. and Ms. Aakriti Bansal, CA Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 24/02/2025 Date of Pronouncement 24/02/2025 O R D E R PER MANISH AGARWAL, AM: This is an appeal filed by the revenue against the order of ld. Addl. CIT / JCIT(A)-13 Mumbai in appeal No. CIT(A), Delhi- 4/10777/2019-20 dated 20/08/2024 for AY 2017-18. The revenue has raised following grounds of appeal: “1. Whether in law and on facts, the Ld. Addl./JCIT(A) is correct in allowing the credit of TDS amounting to Rs.7,83,43,2521- for the AY 2017- 18 without verifying the fact as to whether the assessee has offered the corresponding income for taxation? 2. Whether in law and on facts, the Ld. Addl./JCIT(A) is correct in allowing the credit of TDS amounting to Rs.7,83,43,2521- for the AY 2017- 2 ITA No.5034 /Del/2024 HCL Technologies Ltd. vs. ITO 18 ignoring the fact that the assessee had failed to reconcile the claim of TDS vis-d-vis income offered to tax and hence, provisions of section 199 r.w. Rule 37BA has not been complied with for claim of such TDS by the assessee? 3. The appellant craves the leave to add, amend, vary, withdraw or modify all or any of the grounds on or before the date of hearing'.” 2. Brief facts are that the assessee HCL Technologies Ltd. (formerly known as HCL Comnet Limited), is engaged in the business of providing, installing and maintaining networking solutions. The appellant had filed its original return of income on 30.11.2017 declaring a loss of Rs. 2,24,48,700/-. The said return was revised on 15.09.2018 declaring total loss of Rs. 2,24,48,700/-. Thereafter the assessment was taken up for scrutiny and the assessment order was passed u/s 143(3) dated 28/12/2019 wherein the total loss was assessed at Rs. 2,24,48,700/-. However, the AO allowed the credit of TDS of Rs. 7,83,43,252/- only being 32% of total TDS credit claimed at Rs. 24,48,22,664/- by invoking the provision of section 199 r.w.r. 37BA. The AO observed that as per rule 37BA (3) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. 3. During the course of hearing ld. Sr. DR vehemently supported the order of the AO and submit that the ld. JCIT(A) has wrongly allowed the credit to the assessee as no income to the extent of the 3 ITA No.5034 /Del/2024 HCL Technologies Ltd. vs. ITO TDS claimed was declared. He thus prayed for the restoration of the assessment order. 4. On the other hand, the ld. AR submits that this issue is already decided in favour of assessee by the Coordinate bench of the Tribunal in appellant’s own case in ITA Nos. 1113/ DEL/ 2017 for AY 2012-13 order dt. 04.09.2020 where the Tribunal has followed its earlier order for AY 2011-12 in ITA No. 3221/Del/2017 dt. 31.12.2019. He further stated in AY 2013-14 also the co-ordinate bench of Tribunal in ITA No. 135/Del/2018 vide order dt. 25.08.2021 has allowed the appeal of assessee. Ld. JCIT(A) in the instant case has followed the aforesaid orders of the Tribunal in assessee’s own case and allowed the ground of the assessee thus there is no fault in the order of the JCIT(A), therefore, the same deserves to be upheld. 5. After hearing the arguments from both the parties, we find that this issue has already been decided by the coordinate bench of the Tribunal in assessee’s own case in its favour wherein the Tribunal in ITA Nos.135/Del./2018 vide order dt. 25.08.21 has made following observations: “22. We have perused the order passed by the Tribunal in assessee’s own case for AY 2012-13 (supra) wherein the identical issue has been decided in favour of the assessee by returning following findings:- “23. We have given thoughtful consideration to the orders of the authorities below. We -find that section 199(3) of the Act gives power to the Board to make such rules for the purposes of giving credit in respect of tax deducted or tax paid in terms of provisions of the Act and also A. Y for which 4 ITA No.5034 /Del/2024 HCL Technologies Ltd. vs. ITO such credit may be given. Rule 37BA(3)(ii) provides that where tax has been deducted at source and paid to Central Government and income is sustainable over a number of years, credit for tax deducted at source shall be allowed across those years in same proportion in which income is assessable to tax. We, accordingly, direct the Assessing Officer to give proportionate credit of TDS for the income declared during the year under consideration. With these directions, Ground no. 3 is allowed.” 23. So, following the decision rendered by the coordinate Bench of the Tribunal in assessee’s own case (supra), we are of the considered view that assessee is entitled for credit of tax deducted at source on proportionate basis for the income declared during the year under consideration as per Rule 37BA(3)(ii) of the Rules. Consequently, Grounds No.2 & 2.1 of ITA No.135/Del/2018 for AY 2013-14 in case of HCL Comnet Ltd. and Grounds No.1 & 1.1 of ITA Nos.136/DEL/2018 & 137/DEL/2018 for AYs 2013-14 in case of HCL Comnet Systems & Services Ltd. are determined in favour of the assessee. 6. Since the facts in the year under appeal are identical thus the findings of the Tribunal as extracted above, are mutatis mutandis applied to the present appeal and accordingly the grounds taken by the revenue are dismissed. 7. As a result appeal of the revenue is dismissed. Order is pronounced in the open court on 24/02/2025. Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24/02/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 5 ITA No.5034 /Del/2024 HCL Technologies Ltd. vs. ITO 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "