CIT vs H. Krishna Vijoy Arora

C.N. Ramachandran Nair, J.—All these appeals are filed by the Revenue on 21-5-2008. When the appeals were taken up for hearing, counsel for the respondents referred to Section 268A of the Income Tax Act and Circular dated 18-5-2008 issued by the Central Board of Direct Taxes wherein appeals by Revenue is maintainable before this Court only if tax effect is above Rs. 4 lakhs. In none of these cases, tax effect is above Rs. 4 lakhs and in so much so the contention raised by the assessees is that the appeals are not maintainable. However, learned Senior counsel appearing for the Revenue referred to the decision of the Hon''ble Supreme Court in Commissionar of Income Tax Central-III Vs. Surya Herbal Ltd., wherein the Supreme Court held that the High Court can ignore the Circulars and proceed to decide the appeals on merits, if the question involved is substantial and arising in many cases and for subsequent years or in large number of matters. Since the issue raised in these appeals is a substantial question of law, i.e., with regard to the assessment year in which tax deducted at source has to be credited in the assessment of the assessees, we reject the objection of maintainability raised by the respondents and proceed to consider the appeals on merits.

The issue raised is squarely covered by our judgments in the five appeals decided today, i.e., I.T. Appeal Nos. 596, 708, 1122, 1273 & 1464 of 2009. Following the said judgments, we allow the Departmental Appeals by reversing the orders of the Tribunal and that of the first appellate authority, by restoring the assessments denying credit of tax based on TDS certificates issued by the banks in respect of the interest income which has not been assessed in the assessments. However, since we are allowing the Departmental appeals declaring that respondents-assessee are not entitled to credit of tax on the interest income based on TDS certificates issued by the banks, the assessees are entitled to credit of tax based on the very same TDS certificates (in the year in respect of which the subject-matter of deduction of tax is assessed.

The appeals are allowed as above.