M/s. TaherAli Industries and Projects, (P) Ltd., rep. by its Director, Mr. M.M. Rahman V. The Asst. Commissioner of Income Tax, Circle No.11(3), Hyderabad, A.P. and The Commissioner of Income Tax, Hyderabad{1, Hyderabad, A.P.

WP/4290/2006

AI Insights

The case involves M/s. TaherAli Industries and Projects, (P) Ltd., represented by its director Mr. M.M. Rahman, who filed a writ petition against the Assistant Commissioner of Income Tax and the Commissioner of Income Tax, Hyderabad. The petition challenged the rejection of TDS certificates attributed to the petitioner under a joint venture. The core legal issue was whether the TDS certificates issued in the name of the joint venture could be credited to the petitioner, despite the certificates being in the name of the joint venture and not the individual members. The court referenced a similar case, Bhooratnam and Company, where it was held that partners in a joint venture are entitled to TDS certificates in the name of the joint venture.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 680152 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 06-12-2023
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. Bhooratnam and Company
• Laws Referred To: Article 226 of the Constitution of India, Section 199 of the Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNDARI R PASUPATHI
• Assessee Lawyers: SHAIK JEELANI BASHA; Y RATNAKAR
• Keywords: Credit denial; Income Tax; Joint venture; TDS Certificates; Writ of Certiorari
• Section: 199; 226

Judgement Text

"[ 337e ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SIXTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI wRlT PET|TION NO.4290 0F 2006 Between: 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. ...PETITIONER AND 1. 2. The Asst. Commissioner of lncome Tax, Circle No.ll(3), Hyderabad, A.P. The Commissioner of lncome Tax, Hyderabad{1, Hyderabad, A.P. ...RESPONDENTS 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 venture have already 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 received by the Petitioner and also by holding that the Joint Venture/consortium consisting of the lndividual members (companies) for better I 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. l.A. NO: 1 OF 2006(WPMP. NO: 5384 OF 2006) 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. lA NO: 1 OF 2019 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. lA NO: 2 OF 2019 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. Counsel for the petitioner: SRt SHAIK JEELANI BASHA SRI Y. RATNAKAR Counsel for the Respondents: M/s. SUNDARI R PASUPATHI, SENIOR STANDTNG COUNSEL FOR INCOME riX OCPNRTUETT The Court made the foflowing: ORDER THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI WRIT PETTTIO N No.4290 ot2O06 ORDER:(per fltr n'ble Sri Jttstice P.SAM KOSHY) Heard Mr.Shaik Jeelani Basha, leamed counsel for the petitioner and Ms.Sundari R. Pasupathi, leamed Standing Counsel for the respondent.Department.Perusedthematerialavailableonrecord. 2.Thiswritpetitionisfiledassaitingtheorder,datedt4.ll.2005of respondent No. I whereby respondent No'I has rejected the TDS certificate submitted by the petitioners in the name of joint venture' 3. Today, when the matter is taken up for hearing, leamed counsel for thepetitionerdrewtheattentionofthisbenchtothedecisionrendered by the unified Andhra Pradesh High Court as it then was in the case of Commissioner of Income Tax v. Bhooratnam and Companyt decided on 2l . 1 1 .2012. The said appeals i'e', ITTA Nos' I I 7 and 222 of 2012' wherein the revenue had challenged the decision of the Commissioner of Income Tax appeals, which had allowed appeals of the assessee holding that the partners in the joint venture having his own share of workwasentitledtogettheTDScertificatesubmittedinthenameof a 'lzor:l :sz trn:gs (nP) r) 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. 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. 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. 4. 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. 5. 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 l I 4 7 of Bhooratnam and Company supra, deserves to be and is accordingly allowed and the impugned order, dated 14. 11.2005 passed by respondent No.l is set aside and the matter stands remitted back to respondent No.1 for passing appropriate orders accepting TDS certificate fumished by the petitioner in the name of 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 Bhooralnam and Company supra decided by the Division Bench of this Court under identical set of facts. 6. Accordingly, this writ petition is allowed. No order as to costs As a sequel, miscellaneous applications pending if any in this writ The Asst. Commissioner of lncome Tax, Circle No.ll(3), Hyderabad. The Commissioner of lncorne Tax, Hyderabad-ll, Hyderabad, A.P. One CC to SRI SHAIK JEELANI BASHA, Advocate IOPUC] One CC to SRI Y. RATNAKAR, Advocate [OPUC] One CC to SRI SUNDARI R. PASUPATHI, Senior Standing Counsel for lncome Tax Depa(ment [OPUC] Two CD Copies A/- petition, shall stand closed. 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. SD/. MOHD. SANAULLAH ANSARI ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. 2. 3. 4. 5. 6. MP NS r' HIGH COURT DATED:0611212023 rt E STA r6, 3 7t oE[ 2923 (. Y > * ,t a).. C I:: !r^rT ORDER WP.No.4290 of 2006 ALLOWING THE WRIT PETITION WITHOUT COSTS 1)- )3 "