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ITAT: TDS Is Tax Paid for National American Coal Cooperation In the Present Case

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The Tribunal had decided whether the Assessee is entitled to the adjustments of TDS. It had also decided the validity of the order passed by ld. CIT(A).


This appeal had originated from the order given by ITSC on 11th June 2020. The main issue in the appeal is the denial of the grant of credit for tax deducted at source. The assessee is a subsidiary of the National American Coal Cooperation (NACC). NACC is based in the USA. The assessee paid royalty to its parent company and this royalty was paid as tax to India at the rate of 10%. After the A.O completed the assessment of the company it changed the tax to 40%.

The assessee and the parent company filed an application to the Income-tax Settlement Commission on 4th December 2014. This application contained three assessment years for 2012-2013, 2013-2014 and 2014-2015. The assessee had also disclosed the total income as rupees 16.8 lakh in the application. The ITSC found out that the income for the year in question is 32.95 lakh rupees and also directed the assessee to give credit for taxes paid. The A.O. on a careful assessment of the ITSC order found out that the assessee had to pay rupees 70.53 lakhs.

The assessee appealed against the order of the A.O against the ld. CIT(A) supported the assessee stating that the TDS credit should have been granted. The Revenue was not pleased with the order given by ld. CIT(A) and has filed an appeal to the Income Tax Appellate Tribunal.

Arguments Advanced

The Court proceedings were held through a video conferencing format. The A.O stated that the assessee didn’t file any return of income under Section 139 of the Income Tax Act 1961 before filing an application to the ITSC. Hence the A.O states that the assessee isn’t entitled to the TDS adjustments.

The assessee states that when referring to Section 245 (C) of the Income Tax Act 1961 he may file an application to the ITSC without filing for any return of income. The assessee also referred to Section 245D (4) of the Act which grants Suo moto refund from the A.O.

Court Observations

The Tribunal used Section 139, 245(C), 245D (4) and 199 of the Income Tax Act 1961 to understand whether the assessee is entitled to the adjustments of TDS.


The Tribunal came to the conclusion that the tax deducted at the source is also considered as tax paid by the assessee in the present case. Hence, the ITSC’s direction of giving credit for paid taxes has already been paid by the assessee. Hence, the order given by ld. CIT(A) is justified. The appeal has been dismissed.

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