JAGDAMBA CONTRACTOR, Jaipur V. ITO, Jaipur

ITA 744/JPR/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2042 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Recovery proceedings
• Section: 143(3); 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 744/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. JAGDAMBA CONTRACTOR, D-135, AMBA BARI, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD - 4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAGFJ 0361 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR.(ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.05.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/06/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-II, JAIPUR DATED 22.07.2011 PERTAINING TO A.Y. 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE LD. CIT(A) IS VOID-AB-INITIO. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NOT ALLOWING THE CREDIT OF TDS 53,877/- AND TCS OF RS. 699667/-. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT ASSESSEE WAS DUTY BOUND TO FI ND OUT THE DUTY OF MISMATCH THE DEDUCTOR IN RESPECT OF TDS OF RS. 53,8 77/-. 4. THAT THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL AT THE TIME OF, OR BEFORE THE HEARING OF THE APPEAL. 2 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE F ILED RETURN DECLARING TOTAL INCOME AT RS. 22,13,120/- ON 30/10/2007. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SE CTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 24.12.2009. SUBSEQUENTLY, THE ASSESSEE FILED A REC TIFICATION APPLICATION, SEEKING RECTIFICATION OF THE ASSESSMENT ORDER. PRAYING THE REIN TO GIVE CREDIT OF THE TDS AMOUNTING TO RS. 7,53,544/-. THE SAID APPLICATION W AS DISMISSED AGAINST THIS. THE ASSESSEE FILED AN APPEAL BEFORE LD. CIT(A), WHO AFT ER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. NOW, THE ASSESSEE IS IN FURT HER APPEAL BEFORE THIS TRIBUNAL. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 3. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APROPOS TO GROUND NO. 1 AND 2, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR CREDIT OF TAX COLLECTED A T SOURCE. HE SUBMITTED THAT THE AO AS WELL AS THE LD. CIT(A) REJECTED THE CLAIM ON TEC HNICAL BASIS. HE SUBMITTED THAT THE TECHNICALITIES SHOULD NOT COME THE WAY OF DISCH ARGE SUBSTANTIVE JUSTICE. IN SUPPORT OF THIS; HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF MARUTI CIVIL WORKS VS. ITO (2011) 136 TTJ 4 48(PUNE). LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ORDER U/S 154 IS TITLED AS ORDER U/S 271(1)(C) READ WITH SECTION 274 OF THE ACT. HE SUBMITTED THAT ON THE I NSTRUCTION OF THE RAJASTHAN GOVERNMENT, HE DEPOSITED THE TAX COLLECTED FROM THE LESSEE OF THE MINES FOR EXCESS 3 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. ROYALTY. HE CONTENDED THAT THE LD. CIT(A) FAILED T O APPRECIATE THE FACTS, THAT DISPUTE IS WITH REGARD TO THE FACT WHEN THE STATE GOVERNMEN T HAS RECOVERED TCS FROM THE ASSESSEE ON COLLECTION OF ADDITIONAL ON EXCESS ROYA LTY AND HAS GRANTED TCS SURVEY IN THE NAME OF THE ASSESSEE. EVEN THEN THE DEPARTMENT HAS NOT GIVEN CREDIT OF THE SAME IN THE HANDS OF THE ASSESSEE. HE CONTENDED THA T THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TCS HAS BEEN DEPOSITED BY T HE ASSESSEE WITHOUT ANY COLLECTION OR RECOVERY FROM THE LESSEES OF MINES. HE CONTENDED THAT LD. CIT(A) REITERATED THE CLAIM MERELY ON THE GROUND THAT SUCH CREDIT IS TO BE GIVEN IN THE HANDS OF THE LESSEES OF THE MINES. HE SUBMITTED UN DER THESE FACTS IN THE INTEREST OF SUBSTANTIVE JUSTICE, THE AO MAY BE DIRECTED TO GRAN T CREDIT OF TCS DEPOSITED BY THE ASSESSEE. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT WHAT THE LD. COUNSEL IS PRAYI NG WHICH IS CONTRARY TO THE PROVISIONS OF LAW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, DURING THE COURSE OF HEARING, LD. COUNSEL F OR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE S.M.C RENDERED IN ITA NO. 470 & 502/JP/2014 WHEREIN UNDER THE IDENTICAL FACTS LD. SENIOR MEMBER DECIDED THE ISSUE IN PARA 2.6 OF HIS ORDER AS UNDER:- 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. A PERUSAL OF ASSESSEE'S AGREEMENT WITH RAJ ASTHAN STATE MINING DEPARTMENT AND THE CORRESPONDENCE WITH THEM REGARDING TDS CERT IFICATE AND ASSESSEE'S REPLY, IT CLEARLY EMERGES THAT THE ASSESSEE WAS ACCORDED THE STATUS OF A CONTRACTOR UNDER STATUTORY RULES OF STATE GOVT. THERE IS NO GAINS A S MENTIONED BY THE LD. CIT (A) THAT 4 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. THE ASSESSEE THOUGH A CONTRACTOR IS NOT MINING CONT RACTOR BUT THE CONTRACT WAS IN CONNECTION WITH EXCESS ROYALTY THIS APPROACH AMOUNT S TO BLOWING HOT AND COLD. THE FACT THAT STATE GOVT. HAS COLLECTED TDS AND PAID IT TO GOVT. TREASURY IS UNDISPUTED. IT IS ABUNDANTLY CLEAR THAT ASSESSEE'S CASE IS COVERED UNDER THE TCS PROVISIONS AND THAT IS WHY THE TCS IS COLLECTED IN THIS BEHALF U/S 206C . IT IS UNDISPUTED FACT THAT THAT TCS PAYMENT IS DULY CERTIFIED BY PAYER RAJASTHAN GO VT. IN PRESCRIBED FORM NO. 27D; CONSEQUENTLY THE CREDIT OF TCS HAS TO BE GIVEN TO A SSESSEE AS A MATTER OF RIGHT, MORE SO, WHEN THE CORRESPONDING INCOME FROM CONTRAC TED ACTIVITIES AS PER RAJASTHAN MINOR MINERALS CONCESSION RULES, 1986, IS INCLUDED IN ASSESSEE'S INCOME. IN THESE FACTS AND CIRCUMSTANCES, I FIND MERIT IN THE ARGUME NTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT DENIAL OF CREDIT TANTAMOUNT TO CONFIS CATING ASSESSEE'S TAX FOR WHICH CORRESPONDING INCOME IS INCLUDED IN ITS TAXABLE INC OME. SUCH CONFISCATION AMOUNTS TO UNJUST ENRICHMENT ON THE PART OF THE GOVT. WHICH IS NOT PERMISSIBLE. IN VIEW OF THE ENTIRELY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE CLAIM OF CREDIT OF TCS AMOUNT AS MENTIONED ABOVE IS JUSTIFIED AND D ESERVES TO BE ALLOWED. THIS GROUND OF THE ASSESSEE IN BOTH THE YEARS IS ALLOWED . HOWEVER, LD. CIT(A) DECIDED THE ISSUE AGAINST THE A SSESSEE BY HOLDING AS UNDER:- 3. I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPEL LANT . THE ISSUE IN THE PRESENT APPEAL RELATES TO THE COLLECTI ONS OF TAX UNDER SECTION 206C (IC) OF THE IT ACT FROM THE ASSESSEE BY THE STATE M INING DEPARTMENT. THE ASSESSEE IS A CONTRACTOR APPOINTED BY THE MINING DE PARTMENT FOR THE PURPOSE OF COLLECTION OF 'EXCESS ROYALTY'. NORMALLY THE GOVERNMENT OF RAJASTHAN, THOUGH ITS DEPARTMENT OF MINES AND GEOLOGY, AWARDS 'FIXED ROYALTY' CONTRACT TO THE LESSEE FOR MINING WHICH IS REFERRED TO AS 'D EAD RENT'. IN ADDITION ANOTHER CONTRACT FOR COLLECTION OF EXCESS ROYALTY I S AWARDED TO CERTAIN OTHER CONTRACTORS, WHO COLLECT IT THROUGH THE MECHANISM O F TOLL FROM INDIVIDUAL LESSEES AT THE TIME OF PASSAGE OF THE MINED MATERIA L THROUGH THE ROYALTY TOLL GATE. THE STATE DEPARTMENT DIRECTLY COLLECTS FIXED ROYALTY AS WELL AS THE TAX THERE ON UNDER SECTION 206C(IC) FROM THE LESSEE. I N THE PRESENT CASE, THE APPELLANT (ROYALTY TOLL CONTRACTOR) HAS CLAIMED THA T IT HAD PAID THE TAX ON 5 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. 'EXCESS' AND DEPOSITED THE SAME WITH THE MINING DEP ARTMENT. ON CAREFUL CONSIDERATION, I AM NOT INCLINED TO ACCEPT THE ARGU MENTS OF THE APPELLANT. IN THIS CONNECTION, THE TERMS OF THE AGREEMENT BETWEEN THE APPELLANT AND MINING DEPARTMENT STATE GOVERNMENT, DATED 30.01.200 6 WERE GONE THROUGH. IN TERMS OF THIS AGREEMENT, THE CONTRACTOR HAD COLL ECTED EXCESS ROYALTY AT THE TOLL NEAR THE MINING AREA OF TEHSIL BASSI AND ISSUE D PRINTED RECEIPTS OF AMOUNT OF EXCESS ROYALTY COLLECTED FOR EVERY DISPATCH OF T HE SAID MATERIAL. THE APPELLANT THEN SUBMITTED THE RECEIPTS OF EXCESS ROY ALTY COLLECTED FOR EVERY DISPATCH OF THE SAID MATERIAL TO THE MINING OFFICER ALONG WITH THE TAX COLLECTED THEREON. THE APPELLANT CONTRACTOR HAD MADE HIS OWN ARRANGEMENT FOR COLLECTION OF EXCESS ROYALTY. IN CASE, THE APPELLA NT COLLECTED MORE ROYALTY THAN THE CONTRACT AMOUNT, IT COULD RETAIN THE SURPL US AS ITS INCOME. HOWEVER, THE THRUST OF THE PRESENT CONTROVERSY IS THAT FROM WHOM THE MINING DEPARTMENT SHOULD HAVE RECOVERED THE TCS NAMELY LES SEE OF THE MINE OR THE APPELLANT. IT WOULD BE PERTINENT TO GO THROUGH THE PROVISIONS OF SECTION 206C(IC). EVERY PERSON, WHO GRANTS A LEASE OR A LICENCE OR EN TERS INTO A CONTRACT OR OTHERWISE TRANSFERS ANY RIGHT OR INTEREST EITHER IN WHOLE OR IN PART IN ANY PARKING LOT OR TOLL PLAZA OR MINE OR QUARRY TO ANOT HER PERSON, OTHER THAN A PUBLIC SECTOR COMPANY (HEREAFTER IN THIS SECTION RE FERRED TO AS 'LICENSEE OR LESSEE') FOR THE DUE OF SUCH PARKING LOT OR TOLL PLAZA OR MINE OR QUARR Y FOR THE PURPOSE OF BUSINESS SHALL, AT THE TIME OF DEBITING OF THE AMOUNT PAYABLE BY THE LICENSEE OR LESSEE TO THE AMOUNT OF THE LICENSE E OR LESSEE OR AT THE TIME OF RECEIPTS OF SUCH AMOUNT FROM THE LICENSEE OR LESSEE IN CASH OR BY THE ISSUE A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, COLLECT FROM THE LICENSEE OR LESSEE OF ANY SUCH LICENCE, CONTRACT OR LEASE OF THE NATURE SPECIFIED IN COLUMN (2) OF THE TABLE BELOW A SUM EQ UAL TO THE PERCENTAGE, SPECIFIED IN THE CORRESPONDING ENTRY IN COLUMN (3) OF THE SAID TABLE, OF SUCH AMOUNT AS INCOME-TAX'. 6 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. FROM THE ABOVE, IT IS CLEAR THAT TAX IS COLLECTIBLE AT SOURCE FROM THE LESSEES OF THE MINE, WHO HAD ACTUALLY CARRIED OUT T HE MINING OPERATION ON SUCH ADDITIONAL ROYALTY. ON THE OTHER HAND, IT HAS BEEN DEPOSITED BY THE APPELLANT (TOLL CONTRACTOR) WITH THE STATE GOVERNME NT I.E. THE MINING ENGINEER. IN TERMS OF SECTION 206C(4), THE CREDIT FOR THIS TA X HAS TO CLAIMED BY THE LESSEE AND NOT BY THE TOLL CONTRACTOR AS IT IS NOT COVERED UNDER 206C(IC). AS A RESULT, THE CREDIT FOR THIS TCS WHICH BELONGED TO T HE ORIGINAL LESSEE OF THE MINE WAS CLAIMED BY THE APPELLANT (TOLL CONTRACTOR) IN ITS RETURN OF INCOME. IT WAS NOTICED BY THE FIELD OFFICERS THAT MANY TOLL CO NTRACTORS HAD CLAIMED REFUND THEREOF SINCE THE TAX SO COLLECTED FAR EXCEEDED THE AMOUNT OF TAX PAYABLE BY THEM ON THEIR INCOME. THUS TOLL CONTRACTORS WERE C LAIMING REFUND FOR TCS WHICH NEVER BELONGED TO THEM. FURTHER, IN CASE, IF THERE WAS LIABILITY TO COLLECT TAX UNDER 206C IN RESPECT OF ADDITIONAL ROY ALTY THEN IT WOULD BE IN ADDITION TO THE TAX COLLECTIBLE FROM THE LESSEE OF THE MINE. I FIND IT QUITE BAFFLING TO NOTE THAT CREDIT FOR TAX COLLECTED AT S OURCE, WHICH BELONGS TO THE LESSEE OF MINE IN LIGHT OF SECTION 206C(IC) OF THE INCOME TAX ACT, IS CLAIMED BY THE APPELLANT (TOLL CONTRACTOR) WHO IS NOT A LESSEE OF THE MINE. 3.1 THE APPELLANT WAS AWARE OF THIS PROBLEM AND VID E ITS LETTER DATED 08.02.2011 ADDRESSED TO ITO, WARD-4 (2), JAIPUR, IT HAD STATED THAT IT WAS FACING PRACTICAL PROBLEM SINCE IT COULD NOT DENY TO DEPOSIT OR DEDUCT TCS TO MINING DEPARTMENT, AS IT WAS FEARED THAT THE MINING DEPARTMENT MIGHT CANCEL THE SAID CONTRACT AND PENALIZE IT WHICH MIGHT HAVE RESULTED IN HEAVY FINANCIAL LOSSES AS WELL AS LOSS OF GOODWILL WHICH MIGHT IMPA CT ITS BUSINESS IN FUTURE. FURTHER, IT HAD REQUESTED THE MINING DEPARTMENT NOT TO DEDUCT TCS FROM ITS PRESENT CONTRACT PRICE AND REFUND THE EARLIER DEDUC TED TCS BUT THE MINING DEPARTMENT DID NOT ACCEPT THE SAID REQUEST AND ISSU ED A LETTER DATED 06.09.2010 WHEREIN IT WAS MENTIONED THAT THEY HAD D EDUCTED THE SAID TCS AS PER LETTER OF INCOME TAX OFFICER, WARD-4 (3), JAIPU R. HOWEVER, THE ITO, WARD-4 (3), JAIPUR VIDE ITS ORDER U/S 206C(IC) DATE D 03.03.2006 HAD 7 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. DIRECTED THE MINING ENGINEER (DDO) MINING DEPARTMEN T, JAIPUR TO DEPOSIT THE SHORTFALL IN TCS RELATING TO CONTRACTS OF RS. 5,33,72,563/- FOR AY 2005-06 WHEREAS THE APPELLANT WAS AWARDED CO NTRACT FOR SUBSEQUENT YEAR FROM 30.01.2006 TO 31.03.2007 ONLY. THUS THE APPELLANT HAS PAID TCS ON ADDITIONAL ROYALTY WHICH WAS NEVER COLLECTED BY IT AND IT PERTAINED TO AY-2005-06. HOWEVER, THE MININ G DEPARTMENT INSTEAD OF COLLECTING IT FROM LESSEE OF THE MINES HAD COLLECTE D FROM THE APPELLANT, THAT IS WHY THE APPELLANT HAD ALSO REQUESTED THE MINING DEP ARTMENT TO ARRANGE-FOR THE REFUND OF TCS WITH INTEREST. 3.2 THE PROVISIONS OF SECTION 206C(4) ARE ON THE LI NES OF SECTION 199. HOWEVER, IN THE PRESENT CASE, THE ADDITIONAL ROYALT Y ON WHICH TCS HAS BEEN COLLECTED, IS NOT OFFERED TO TAX BY THE APPELLANT. THE SAID INCOME WAS TAXABLE IN THE HANDS OF LESSEE OF MINE. IT WOULD IMPLY THA T TCS BEING ONLY A MANNER OF RECOVERY OF TAX, IT WOULD BE ALLOWABLE ONLY AGAI NST THE CORRESPONDING INCOME, AS OTHERWISE TAX ON ONE INCOME MIGHT GET SE T OFF AGAINST TCS ON ANOTHER, AND IT WOULD BE DEFECTIVE OF ITS CONCEPTS AS WELL AS CONTRADICTORY TO THE PROVISIONS OF LAW . IN THE CASE OF ITO VS SHRI ANUPALLAVI FINANCE & INVESTMENTS (2011-TIOL-78-ITAT-MAD), THE BONE OF CONTENTION WAS THE YEAR FOR WHICH THE CREDIT FOR TDS WAS TO BE ALLOWED , AND WHICH, AS PER THE CLEAR PRESCRIPTION OF LAW, WAS TO BE THE YEAR FOR W HICH CORRESPONDING INCOME WAS ASSESSABLE TO TAX. IT WAS ARGUED THAT THE ISSU E STOOD SETTLED IN FAVOUR OF REVENUE, I.E. AS FAR AS THE TRIBUNAL WAS CONCERNED, BY ITS THIRD MEMBER DECISION IN THE CASE OF PRADEEP KUMAR DHIR VS ACIT (107 ITD 118 [CHD] [TM]). THE THIRD MEMBER HELD THAT THE ASSESSEE SHA LL BE, IN TERMS OF SECTION 199 OF THE INCOME-TAX ACT, ALLOWED CREDIT FOR TDS O N PRORATA BASIS I.E. IN THE PROPORTION IN WHICH THE INCOME WHICH IS THE SUBJECT MATTER OF TDS STANDS OFFERED TO TAX FOR THE CURRENT YEAR. THIS IS PRECI SELY WHAT SECTION 199 SAYS. IT IS OBVIOUS AND IMPLICIT IN SECTION 199 ITSELF I.E. THAT THE CREDIT FOR TAX DEDUCTED 8 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. AT SOURCE SHALL FOLLOW THE ASSESSMENT OF THE CORRES PONDING INCOME. THE OBSERVATION OF HON. ITAT, MADRAS ARE REPRODUCED AS UNDER: 'THE LAW [PER SECTION [99 R. W. S. 190 & 191]] CLAR IFIES THAT THE CREDIT FOR THE TDS SHALL BE AVAILABLE FOR THE YEAR FOR WHI CH THE CORRESPONDING INCOME IS ASSESSABLE. IT, I.E. THE LAW AS PROVIDED BY THE STATUTE, TO OUR MIND, COULD NOT GET CLEARER THAN THIS. AS SOUGHT TO BE EMPHASI ZED BY US, THE PROVISIONS OF SECTION 199 OF THE ACT, EVEN OTHERWISE, REPRESEN TS A COMMON SENSE, PURPOSIVE VIEW OF THE MATTER; TDS BEING ONLY MANNER OF RECOVERY OF TAX, SO THAT IT WOULD, SUBJECT TO THE P ROVISIONS TO THE CONTRARY, BE ALLOWABLE ONLY AGAINST THE CORRESPONDI NG INCOME, AS OTHERWISE TAX ON ONE INCOME MAY GET SET OFF AGAINST TDS ON ANOTHER, AND WHICH WOULD BE DEFECTIVE OF ITS CONCEP T AS WELL AS CONTRADICTORY TO THE TDS PROVISIONS. THE DENIAL OF CREDIT FOR TDS IN ONLY ON ACCOUNT FOR THE INCOME NOT RECEIVED BY THE ASSES SEE AND, AS SUCH, NOT RECOGNIZED AND RETURNED BY IT, SO THAT THERE IS NO SCOPE OF THE IMPUGNED TDS BEING INCLUSIVE OF SUCH A PROPORTIONATE AMOUNT, AND TOWARD WHICH WE ALSO DO NOT FIND ANY CLAIM BY THE ASSESSEE BEFORE ANY FORUM , INCLUDING US, AND THE ASSERTION MADE - WITHOUT EVEN ATTEMPTING TO SUBSTAN TIATE THE SAME - WAS ONLY IN RESPONSE TO A QUERY BY THE BENCH. FURTHER, EVEN ASSUMING HYPOTHETICALLY OF THE IMPUGNED TDS AMOUNT HAVING SE EN RETURNED AS INCOME FOR THE YEAR, THE ASSESSEE COULD CLAIM CREDIT IN IT S RESPECT ONLY TO THE EXTENT OF THE AMOUNT OF TDS PROPORTIONATE TO THE SAME. TH AT IS, IF THE TDS RATE IS 10 % (SAY), AT RS. 0214 LAKHS. IN FACT, IN THIS CO NTEXT, WE MAY ALSO ADD THAT THE CREDIT FOR TDS IS TO BE ALLOWED FOR THE YEAR FO R WHICH THE INCOME IS ASSESSABLE, AND NOT ASSESSED, SO THAT INCOME HAS TO , AS PER ASSESSEE'S CONSISTENTLY FOLLOWED METHOD OF ACCOUNTING, BE ASSE SSABLE FOR THAT YEAR. AS SUCH, STRICTLY SPEAKING, THE ASSESSEE WOULD NOT BE ENTITLED TO ANY CREDIT FOR TDS EVEN IF THE SAME STANDS RETURNED FOR THE YEAR, BEING NOT ASSESSABLE FOR THE RELEVANT YEAR, EVEN AS THERE IS NO FINDING, OR EVEN A CLAIM, QUA THE SAID RETURNING, WHICH IS CONTRADICTORY TO THE ASSESSEE'S BASIS OF RETURNING INCOME 9 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. AND, RATHER, ABORTIVE OF THE ISSUE ARISING FOR OUR ADJUDICATION IN THE PRESENT CASE. THE ISSUE ARISING FOR OUR ADJUDICATION I.E. THE YEAR OF ALLOWANCE OF CREDIT FOR TDS STANDS ADDRESSED BY THE CLEAR LANGUA GE OF THE PROVISIONS ITSELF. THE SAME, RATHER, PRESENTS AN IDEAL SITUATION WHERE THE COURSE YIELDED BY PLAIN COMMON SENSE MATCHES WITH THAT STATUTORILY PR OVIDED I.E. ALLOW CREDIT FOR TDS AGAINST THE CORRESPONDING INCOME ON ITS ASS ESSMENT, SO THAT EVEN THE ABSENCE OF SECTION 199 WOULD YIELD THE SAID COURSE IN VIEW OF THE DICTUM BY THE HON'BLE APEX COURT THAT TAX LAWS SHOULD BE APPL IED, AS FAR AS CIRCUMSTANCES MAY ADMIT, IN AN EQUITABLE MANNER (CI T VS GHOTIA J. H 156 ITR 323). 3.3 SINCE THE APPELLANT IS NOT LESSEE OF THE MINE B UT A TOLL CONTRACTOR THEREFORE IT CANNOT BE GIVEN ANY CREDIT FOR TCS IN VIEW OF PROVISIONS OF SECTION 206C(IC). THE HON'BLE APEX COURT IN ESCORTS LTD. VS. UNION OF INDIA (199 ITR 43) HAS HELD THAT WHERE A PROVISION IS CLE AR AS TO ITS SCOPE, THAT INTERPRETATION IS TO BE ADOPTED, IRRESPECTIVE OF ACCEPTANCE OF A CONTRARY VIEW BY SOME AUTHORITY. FURTHER, RULE 37-1 HAS BEEN INSERTED BY THE IT (SIXTH AMENDMENT) RULES 2009 WITH EFFECT FROM 01.04.2009. THE RULE 37D HAS BEEN AMENDED WITH EFFECT FROM 01.04.20 09 VIDE PRESS RELEASE NO. 402/92/2006-MC DATED 30.06.2009, THE ENFORCEMEN T OF THE SAID AMENDMENT HAS BEEN KEPT IN ABEYANCE FOR THE TIME BE ING. THEREFORE, IN MY OPINION, THESE ARE NOT APPLICABLE FOR AY-2007-08. WITHOUT PREJUDICE TO THE ABOVE, RULE 37D (2) LAYS DOWN THAT CERTIFICATE SHAL L BE ISSUED TO THE DEDUCTEE WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH THE AMOUNT IS DEBITED TO THE ACCOUNT OF THE BUYER OR LICENSEE OR LESSEE OR PAYMENT IS RECEIVED FROM THE BUYER OR LICENSEE OR LESSEE AS THE CASE MAY BE. I DO NOT AGREE WITH THE ARGUMENTS OF THE APPELLANT THAT RULE 37-I BROUGHT INTO THE STATUTE WITH EFFECT FROM 01.04.2009 IS APPLICABLE TO THE EA RLIER YEARS I.E. AY 2007-08. FURTHER RULE 37-I (2) (I) LAYS DOWN THAT WHERE TCS HAS BEEN COLLECTED AT SOURCE, CREDIT FOR SUCH TAX SHALL BE GIVEN FOR THE ASSESSME NT YEAR FOR 10 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. WHICH INCOME IS ASSESSABLE TO TAX. THEREFORE, IT ALSO DOES NOT THE HELP THE CASE OF THE ASSESSEE. 7. NOW, IN THIS BACKGROUND IT IS TO BE DETERMINED W HETHER THE ASSESSEE IS ENTITLED FOR THE CREDIT OF TCS, COLLECTED ON BEHALF OF THE MINING DEPARTMENT. THE LD. SINGLE MEMBER IN S.M.C. HAS TAKEN A VIEW THAT THE A SSESSEE IS ENTITLED FOR CREDIT OF TCS. THIS RULING OF THE LD. SINGLE MEMBER IS ADMITT EDLY NOT BINDING PRECEDENT. THERE IS NO AMBIGUITY SO FAR AS THE PROVISION OF LA W IS CONCERNED UNDER SECTION 206C(1C) OF THE ACT MANDATE EVERY PERSON, WHO GRANT S A LEASE OR LICENCE OR ENTERS INTO A CONTRACT OR OTHERWISE TRANSFERS ANY RIGHT OR INTEREST EITHER IN WHOLE OR IN PART IN ANY MINE OR QUARRY, TO ANOTHER PERSON, OTHER THA N A PUBLIC SECTION COMPANY FOR THE USE OF SUCH MINE OR QUARRY FOR THE PURPOSE OF B USINESS SHALL, AT THE TIME OF DEBITING OF THE AMOUNT PAYABLE BY THE LICENSEE OR L ESSEE TO THE ACCOUNT OF THE LICENSEE OR LESSEE OR AT THE TIME OF RECEIPTS OF SU CH AMOUNT FROM THE LICENSEE OR LESSEE IN CASH OR BY THE ISSUE A CHEQUE OR DRAFT O R BY ANY OTHER MODE, WHICHEVER IS EARLIER, COLLECT FROM THE LICENSEE OR LESSEE OF ANY SUCH LICENCE, CONTRACT FOR LEASE OF THE NATURE SPECIFIED U/S 206C(1C). ADMITTEDLY, THE ASSESSEE DOES NOT FALL IN THE CATEGORY MENTIONED HERE IN ABOVE NEITHER THE ASSESS EE IS A LICENSEE OR LESSEE NOR THE ASSESSEE IS GIVEN CONTRACT TO USE THE MINES FOR BUSINESS. HOWEVER, IT IS NOT CLEAR WHETHER THE INDIVIDUALS WHO HAD PAID THE EXCESS ROY ALTY ALSO CLAIMED CREDIT OF TAX COLLECTED AT SOURCE. THE CASE OF THE ASSESSEE IS T HAT IT DEPOSITED AMOUNT AT THE INSTANCE OF THE MINING DEPARTMENT, GOVERNMENT OF RA JASTHAN AND THE SAID DEPARTMENT ISSUED THE CERTIFICATE IN FAVOUR OF THE ASSESSEE. UNDER THESE FACTS, THE ISSUE IS RESTORED TO THE FILE OF AO TO VERIFY, WHET HER ANY OTHER INDIVIDUAL CLAIMED 11 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR. CREDIT OF TAX ON THE PAYMENT OF EXCESS ROYALTY, IF NOT THEN THE CLAIM OF THE ASSESSEE MAY BE ALLOWED, IN THE INTEREST OF JUSTICE, AS THE REVENUE IS NOT LEGALLY ENTITLED TO WITHHOLD SUCH TAX, WHICH IS DEPOSITED BY A WRONG PE RSON. HOWEVER, THE REVENUE WOULD BE AT LIBERTY TO CLAIM TAX LIABILITY IF ANY A RISING OUT OF SUCH TRANSACTION FROM THE APPROPRIATE PERSON. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 16TH DAY OF JUNE 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16/06/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- JAGDAMBA CONTRACTOR, D-135, AMBA BARI, JAIPUR. 2. THE RESPONDENT THE INCOME TAX OFFICER, WARD-4 (2), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. ITA NO. 744/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 12 ITA NO. 744/JP/2011 JAGDAMBA CONTRACTOR, JAIPUR.