CAE Simulation Training Pvt. Ltd. vs. DCIT: ITA 912/DEL/2022 Assessment Year 2018-19 Verdict

CAE Simulation Training Pvt. Ltd. vs. DCIT: A Detailed Analysis of the ITA 912/DEL/2022 Judgment

In a landmark judgment dated March 24, 2023, the Income Tax Appellate Tribunal (ITAT), Delhi Bench, comprising Accountant Member Shri Anil Chaturvedi and Judicial Member Shri C.M. Garg, delivered a significant verdict in the case of CAE Simulation Training Pvt. Ltd. versus the Deputy Commissioner of Income Tax, Circle-4(2), New Delhi, for the Assessment Year 2018-19. The case, noted as ITA No. 912/DEL/2022 along with connected appeals for Assessment Years 2016-17 and 2020-21, revolved around the intricate issue of Tax Deducted at Source (TDS) credit and its acknowledgment in the appropriate assessment year as per the provisions of the Income-tax Act, 1961.

The appellant, CAE Simulation Training Pvt. Ltd., represented by advocate Shri Nagesh Behl, challenged the orders of the National Faceless Appeal Centre (NFAC), Delhi, which had hitherto dismissed the acknowledgment of TDS credit for the concerned assessment years. The core of the dispute lay in the interpretation of Section 199 of the Income-tax Act, 1961 read with Rule 37BA(3) of the Income-tax Rules, 1962, which stipulates that the credit for TDS should be given for the assessment year for which the income is assessable.

During the hearings, both parties acknowledged the similarity in facts and circumstances across the appeals for the different assessment years, drawing parallels to a precedent set by the Tribunal in ITA No.6580/Del/2019 for AY 2016-17 in the case of M/s Interglobe Enterprises Pvt. Ltd. versus ACIT. This acknowledgment led to a harmonious agreement to restore the appeals back to the file of the Assessing Officer for a reevaluation of TDS credit as per applicable laws.

The Tribunal meticulously dissected the arguments, referencing past precedents and statutory provisions to establish a clear directive for the assessing officer to allow TDS credit for the assessment year when the income was rightfully assessable. The directive emphasized a verification mechanism to prevent any potential double claim of TDS credit, mandating the submission of an undertaking or affidavit by the assessee assuring no double claims in the future.

The decision culminated in setting aside the first appellate order, thereby restoring the matter to the Assessing Officer for appropriate action in line with the Tribunal’s observations. This pivotal judgment underscores the Tribunal’s commitment to ensuring justice and adherence to the legislative framework governing tax deductions at source and their rightful claim.

In conclusion, the Tribunal’s decision in the appeal filed by CAE Simulation Training Pvt. Ltd. for the Assessment Year 2018-19, alongside the connected years, marks a significant precedent in the realm of TDS credit adjudication. It illuminates the path for similar cases, reinforcing the sanctity of procedural and substantive justice in tax law.

Order pronounced in the open court on 24th March 2023, marking a triumphant moment for the appellant and setting a benchmark for future cases in the intricate domain of income tax law and its interpretation.

CAE Simulation Training Pvt. Ltd. vs. DCIT: ITA 912/DEL/2022 Assessment Year 2018-19 Verdict