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Toshiba Technical Services International Corporation v/s Assistant Commissioner of Income Tax Circle 2 (International Taxation), Ahmedabad

    Special Civil Application Nos. 8523 to 8525 of 2021
    Decided On, 22 June 2021
    At, High Court of Gujarat At Ahmedabad
    For the Appearing Parties: S.N. Soparkar, B.S. Soparkar, Advocates.

Judgment Text
Bela M. Trivedi, J.

1. Since all the three petitions have been filed by the same petitioner Toshiba Technical Services International Corporation, involving similar factual and legal issues, they were heard together and are being disposed of by this common order. For the sake of convenience, the facts of Special Civil Application No.8523 of 2021 are taken into consideration.

2. The petitioner, a Company incorporated in Japan, has filed the present petition invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution, seeking the following prayers contained in paragraph No.7 of the petition:-

"7.(a) Direct the respondent to give to the petitioner, credit of taxes of Rs.27,60,569/- deducted on behalf of the petitioner in A.Y. 2016-17;

(b) Pending the admission, hearing and final disposal of this petition, hold that the non-withdrawal of the appeal by the petitioner in ITAT would not violate Section 4 of DTVSV Act and corresponding rules;

(c) Pending the admission, hearing and final disposal of this petition, hold that on withdrawal of appeal by the petitioner under DTVSV, the petitioner's claim of tax credit will not lapse."

3. The short facts relevant for the purpose of deciding the petition, as emanating from the petition itself are that the petitioner is engaged in the execution of worldwide social-infrastructure projects and is engaged in providing supervisory services in relation to erection, installation, commissioning, testing of various types of equipment in a power plant and maintenance of the power plant. The petitioner had filed the original return of income for the A.Y. 2016-17 on 30.11.2016, disclosing the income at Rs.15,29,60,070/-, and claiming TDS at Rs.6,18,83,907/- and had also claimed refund of tax of Rs.52,97,200/-. The petitioner thereafter had filed revised return on 28.3.2018, claiming income at Rs.15,16,33,050/-, claiming TDS at Rs.5,49,69,762/- and claiming the tax liability/refund as nil. The return of the petitioner was selected for scrutiny and the petitioner was asked to reconcile the TDS claim with the Form No.26AS. The petitioner, vide the letter dated 5.12.2019 had explained the claim of TDS, however, according to the petitioner, the assessment order was passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") on 5.2.2020, determining the income at Rs.15,42,40,449/-. While computing the demand pursuant to the assessment order, the respondent had given credit of TDS only to the extent of Rs.5,23,42,140/-. Resultantly, a demand of Rs.58,93,233/- was raised.

4. Being aggrieved by the order of not giving credit of taxes duly paid, the petitioner had filed an application for rectification under Section 154 of the Act on 27.2.2020 and also simultaneously filed an appeal before the CIT(Appeals). The respondent rejected the rectification application vide the order dated 2.12.2020. The representative of the petitioner again sent an E-mail, explaining the taxes deducted and the income corresponding to the same, however, the respondent again rejected the said rectification sought vide the order dated 13.4.2021. It is further case of the petitioner that the Direct Tax Vivad se Vishwas Act 2020 (hereinafter referred to as the "DTVSV Act") came into force on 17.3.2020, to provide for resolution of disputed tax and for the matters connected thereto. The petitioner being desirous to resolving the additions to income for the A.Y. 2016-17 had filed the Form 1 and 2 as per Section 4 of DTVSV Act read with Rule 23 of the Rules framed thereunder on 31.1.2021. The petitioner received the certificate dated 15.4.2021 as contemplated under Section 5(1) read with Rule 3 of the said Rules in the prescribed Form-3 from the designated authority, determining the amount payable by the petitioner. The petitioner, being aggrieved by the non-grant of credit by the respondent, who is Assistant Commissioner of Income Tax, Circle 2 (International Taxation), Ahmedabad, has filed the present petition, seeking direction against the respondent to give credit of taxes of Rs.27,60,569/- deducted on behalf of the petitioner in the A.Y. 2016-17.

5. Similarly, the petitioner has filed the Special Civil Application No.8524 of 2021 and Special Civil Application No.8525 of 2021, seeking direction against the respondent to give credit of taxes of Rs.2,29,07,477/- and of Rs.1,72,46,123/- deducted on behalf of the petitioner in the A.Y. 2015-16 and A.Y. 2017-18 respectively.

6. The learned Sr.Advocate Mr.S.N.Soparkar appearing for the petitioner submitted that the respondent has not given the credit of the TDS in the relevant A.Y.2015-16, A.Y.2016-17 and 2017-18, and has wrongly withheld the said amount. According to him, the petitioner is entitled to get the credit either in the relevant Assessment Year, in which the income was earned or in the Assessment Year in which the taxes deducted were deposited. He further submitted that depriving the petitioner of the deducted taxes is an arbitrary action on the part of the respondent in violation of the provisions contained in the Income Tax Act as well as in violation of Articles 14 and 265 of the Constitution of India.

7. At the outset, it may be noted that the present petitions are filed by the petitioner pending the Appeals filed by the petitioner against the orders passed by the Assessing Officers in respect of the concerned Assessment Years. So far as the facts of Special Civil Application No.8523 of 2021 are concerned, undisputedly the petitioner has filed an appeal before the CIT (Appeals), challenging the order dated 5.2.2020 passed by the Assessing Officer under Section 143(3) read with Section 144C(13) of the Income Tax Act for the A.Y. 2016-17 and is pending for final disposal. Pending the said appeal, the petitioner had filed the rectification applications under Section 154 of the said Act twice, which came to be rejected by the respondent vide the orders dated 2.12.2020 and dated 13.4.2021 respectively. The petitioner also sought to settle the dispute with regard to the additions to income for the year 2016-17 by filing of Forms 1 and 2 as per Section 4 of the DTVSV Act, in respect of which the designated authority determined the amount payable by the petitioner and granted the certificate on 15.4.2021, taking into consideration the order dated 13.4.2021 passed by the Assessing Officer, rejecting the application for rectification. As per the said certificate dated 15.4.2021, the petitioner was liable to pay Rs.11,27,963, if paid before 30.4.2021 and Rs.12,40,759/- if paid after 30.4.2021. The petitioner admittedly has not paid the said amount till the date.

8. At this juncture, it is required to be noted that as per the provisions contained under Section 5(2) of the DTVSV Act, the declarant i.e. the petitioner in the present case, had to pay the amount determined by the designated authority under Sub-Section (1) of Section 5 within 15 days of the date of receipt of the certificate, which it failed to pay. Again, Sub-Section (3) of Section 5 also provides that every order passed under Section 5(1) determining the amount payable under the said Act shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income Tax Act or under any other law for the time being in force. It is also required to be noted that the petitioner was also required to withdraw the appeal pending before the CIT (Appeals), on the issuance of certificate under Sub-section (1) of Section 5 of the DTVSV Act, in view of Sub-section (3) of Section 4 of the said Act. Sub-section (5) of Section 4 also requires the petitioner to furnish an undertaking waiving his right, whether direct or indirect, to seek or pursue any remedy or any claim in relation to the tax arrears which may otherwise be available to him under any law for the time being in force. It may be noted that the petitioner had miserably failed to comply with all these provisions co

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ntained in the DTVSV Act and has preferred the present petition, seeking credit of taxes deducted in the A.Y. 2016-17, though the petitioner has already preferred an appeal before the CIT (Appeals) in that regard. 9. In the other two petitions being Special Civil Applications No.8524 of 2021 and No.8525 of 2021 also the Appeals are pending before the CIT (Appeals) in respect of the same issue as raised in the present petitions. 10. The petitioner having already availed the alternative statutory remedy by filing the appeals, and the petitioner having also failed to comply with the mandatory requirements of the DTVSV Act, the present petitions cannot be entertained, more particularly when no legal or statutory right, much less fundamental right of the petitioner has been violated. 11. In that view of the matter, all the petitions being devoid of merits are dismissed.