[Analysis] of TDS and TCS – Law | Procedure | Compliance Challenges

Table of Contents

1. Tax deducted at source as pre-paid tax [Section 190]
2. Obligation of Deductee for Direct Payment [Section 191]
3. TDS only one mode of recovery [Section 202]
4. Certificate for deduction at lower rate [Section 197]
5. Exemption from deduction [Section 197A]
6. Tax deducted at source deemed income [Section 198]
7. Credit for tax deducted at source [Section 199]
8. Credit available in which year

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1. Tax deducted at source as pre-paid tax [Section 190]

Section 190 of the Income-tax Act, 1961, “the Act” envisages the payment of tax before the assessment year by way of tax deducted or collected at source or advance payment though the regular assessment of the related income on which there is a charge of tax is assessed subsequently. Such taxes deducted, collected or paid in advance are pre-paid taxes. Such pre-paid taxes are available as credit to the assessee against the charge of tax under section 4 of the Act and do not affect or modify such charge in any way. The prepaid taxes are in design a form of pay-as-you-earn taxes. The requirement to deduct tax at source from a payment even though only a portion thereof is income for the recipient has been confirmed by the Supreme Court¹. However, the provisions relating to TDS apply only to those sums which are chargeable to tax under the Act. If the payment does not contain any element of income therein, the payer cannot be made liable². The Supreme Court decision in this case was referring to section 195, which deals with payments to non-residents. As regards payments to residents, as one will notice from the subsequent chapters, tax has to be deducted having regard to gross amounts paid, without considering the income element therein. For example, TDS on professional fees will be @ 10% of the gross amount paid, irrespective of whether the payee has positive income or not.

Though there is no specific provision in the Act which provides for refund of excess tax deducted at source, CBDT circulars envisaged such a situation and the deductor’s right to refund tax wrongly paid in excess³. In the absence of any statutory provision empowering the Department to refund the tax deducted at source to the person who has deducted tax at source (barring few exceptions discussed elsewhere in this book), refund is issued to the deductee against a valid claim is made by filing a return. However, Circular 769 (which is in the context of tax deducted under section 195), recognises the entitlement of the deductor to get refund of excess TDS where either the income does not accrue to the non-resident or excess tax has been deducted thereby resulting in a refund becoming due to the Indian payer which deposited the tax. Any refund of excess TDS is first to be adjusted against any existing tax liability under any of the Direct Tax Acts before the refund is granted of the net amount.

However, Circular No. 790 dated 20-4-2000 states that the deductor is not eligible for interest on such a refund of excess tax deducted at source. The Finance Act, 2017 introduced sub-section (1B) to section 244A to provide for interest @ 0.5% for every month or part of a month on refunds to a deductor of tax under Chapter XVII-B. Such interest shall be payable for the period beginning from the date on which the claim for refund is made to the date of grant of such refund.

Another interesting aspect is whether the assessee-deductee is required to bear interest for short-payment of advance-tax on the amount of tax deductible but not deducted or short-deducted by the payer. The Madras High Court, in Madras Fertilisers⁴, observed that section 190 envisages two alternative modes of payment of tax in advance; the tax in respect of a regular assessment is payable either by deduction at source or by advance payment, as the case may be. The Madras High Court further noted that the term ‘assessed tax’ as defined in section 215(5), means the tax determined on the basis of the regular assessment as reduced by the amount of ‘tax deductible’ in accordance with the provisions of Chapter XVII. The Court held that wherever there is a possibility of a deduction of tax at source, the person who had failed to deduct tax at source is liable to pay interest and not the assessee, as otherwise, there will be charging of interest twice on the payment of tax in relation to the same income.

The provisions of section 215 have been replaced with section 234B with effect from 01-04-1989. In Emilio Ruiz Berdejo⁵, it was held that interest under section 234B is compensatory in nature and not an imposition of penalty. It was held that once the interest is to be paid by the employer-deductor, no interest under section 234B could be levied on the employee-assessee.

2. Obligation of Deductee for Direct Payment [Section 191]

Section 191 provides that income-tax shall be payable by the assessee direct in the following two instances—

• in the case of income where there is no provision for TDS under Chapter XVII; and
• in the case where there is such provision for TDS under Chapter XVII but the payer has not deducted the tax in accordance with the provisions of that Chapter.

Where the payer has not deducted tax as required, the payee is not absolved of his primary liability to tax which he has to discharge by making direct payment. As per section 191, in case the deductor fails to make the requisite deduction of tax at source, the deductee would be liable to pay income-tax on the amount received by him as income.

After the ruling in Hindustan Coca Cola Beverages⁶, where the Supreme Court held that the tax could not be again recovered from the deductor where the tax has already been paid by the recipient of income, Explanation to section 191 was inserted with retrospective effect from 01-06-2003. The Explanation provides a relaxation for the payer, who is obliged to deduct but has not deducted tax at source, from being asked to pay the same where the payee has paid the tax on the income received. It has been held that the explanation is merely clarificatory as the position in law was always that the tax could not be recovered from the payer when already collected from the payee⁷. In that case, the Delhi High Court held that, even if the said Explanation was absent, the position in law always was that the assessee who was obliged to, but had not deducted tax at source, could not be asked to pay the same where the deductee had paid it by showing the amount received by him as his income. The High Court explained that the tax being deducted at source by the assessee is the tax on the income of the deductee and not on the income of the assessee-deductor. Section 191 does not cast a dual and simultaneous obligation on both the deductor and the deductee. Tax on the said income in the hands of the deductee is to be paid only once; primarily by the deductor and, upon his failure, by the deductee. If the tax is deducted at source and paid by the deductor, the deductee gets credit for it and the amount deducted is treated as his income as per sections 198 and 199 of the Act.

The provisions requiring direct payment in section 191 do not apply to tax collectible at source. In case of tax collection at source under section 206C, the person responsible for collection of tax at source who fails to collect the tax shall be liable to pay such tax to the Central Government⁸. There is no relaxation in case of a liability for tax collection as is available for tax deduction at source in instances where the deductee has paid the tax direct.

3. TDS only one mode of recovery [Section 202]

Deduction of tax at source is only one mode of recovery⁹. The general provisions for the levy and recovery of tax contained elsewhere in the Act are not affected or limited in any way by the provisions contained in Chapter XVII. This provision enables the Revenue to proceed against the recipient of the income and assess him. An assessee cannot avoid his liability on the ground that it is the responsibility under law of the payer to deduct the tax and pay the same to the Central Government and he cannot be asked to pay the tax. Recovery proceedings are not barred and the payee continues to be primarily liable to pay tax on his income even though the payer who has defaulted in deduction and/or payment of tax could be proceeded against to recover the tax, interest and penalty.

4. Certificate for deduction at lower rate [Section 197]

The objective of permitting an assessee to obtain a certificate for deduction of tax at lower or at nil rate is to avoid deduction of tax which is excessive resulting in substantial refund and interest cost to the Government. As per rule 28AA, such a certificate is valid only for the assessment year specified in the certificate and for the person (deductee) named therein. The certificate will be issued in the name of the deductor under advice to the applicant. There is no time limit for the issuance of the certificate. A certificate issued under section 197 can be cancelled and any payment made after the date of service of the cancellation order will suffer deduction of tax in full. There is no need to provide the affected assessee/applicant an opportunity to be heard¹⁰. The deductor is expected to quote the certificate number while filing the e-TDS returns to justify the lower-than-normal deduction. If this is not so quoted, the deductor will get saddled with a demand from TRACES for the short deduction.

It was held by the Apex Court that the assessee was entitled to an appropriate certificate from the Income-tax Officer under section 197 as may be admissible on proper computation under the relevant rules. An order passed rejecting the application for issue of a certificate under section 197 has to be a speaking order giving reasons therefor. No appeal lies against an order passed under section 197. However, such rejection of application under this section is an order subject to revisionary powers of the commissioner under section 264¹¹.

An application for a certificate under this section is to be made in Form No. 13 online on the TRACES portal. Prior administrative approval of the Commissioner of Income-tax (TDS) is to be obtained where the aggregate amount of tax foregone by non-deduction or deduction at lower rate for the financial year for an assessee exceeds Rs. 50,00,000 in a year in Metro cities of Delhi, Mumbai, Chennai, Kolkata, Bangalore and Pune for tax and Rs. 10,00,000 for other places.

5. Exemption from deduction [Section 197A]

Section 197A provides for certain exemptions from the rigors of TDS in certain situations. Tax need not be deducted at source from certain payments as summarized below:

The CBDT has clarified that entities (other than companies or firms) can submit self-declaration in cases where their income is unconditionally exempt under section 10 even if the payments referred to in section 197A(1A) exceed the threshold limit not subject to tax. This is because such income would anyway be exempt under the Act¹² Interestingly, the clarification does not extend to entities which have exempt income. For instance, though a registered trade union’s income from house property or income from other sources is exempt under section 10(24) it will still suffer deduction of tax at source since its entire income is not unconditionally exempt under the Act. Likewise, for a charitable trust registered under section 12A/12AA, the exemption under section 11 is coupled with several conditions. Hence such trusts will need to obtain certificates under section 197 for lower TDS, by applying on the TRACES portal.

The payments made for acquisition of software from another person being a resident has been exempted under section 197A(1F)¹³ where:

• The software is acquired in a subsequent transfer and the transferor has transferred the software without any modification.
• Tax has been deducted at source on payment for any previous transfer of such software either under section 194J or section
• The transfer obtains a declaration from the transferor that the tax has been deducted under (b) above.

This exemption from deduction of tax has been provided to avoid cascading effect of TDS on software payments where software is sold multiple times in a distribution chain. The Supreme Court decision in the case of Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax¹⁴ has substantially reduced the scope of taxation of software related payments and hence this circular now has limited significance.

6. Tax deducted at source deemed income [Section 198]

Section 198 provides that all sums deducted in accordance with the provisions of Chapter XVII shall be deemed to be income received for the purpose of computing the income of an assessee. This deeming provision does not extend to tax paid by the employer under section 192(1A) as there is an exemption available for the tax borne by the employer under section 10(10CC) of the Act.

This section only clarifies the position as it always existed: The assessee is required to take into account his gross income while computing the total income and it is not open to him to claim as his income the gross income less the tax deducted. He is, of course, entitled to set off the amount of tax deducted against tax due for the year. The taxes paid/deducted under a foreign law do not fall under the scope of this section as what the section deems as income received is the tax deducted under Chapter XVII only. The treatment of foreign taxes could be different as discussed in a paragraph below.

6.1 Foreign taxes not deemed income

Only the tax deducted at source under the provisions of Chapter XVII is deemed as income received under section 198. Tax deducted or paid under any other law in India (e.g., GST) or elsewhere is not included in the section. Further, it has been held that tax deducted abroad is income which is deemed to be received outside India¹⁵. There are no provisions under the Act to tax income which is deemed to be received outside India. The inclusion in scope of income in section 5(1)(a) and (b) to income deemed to accrue or arise in India or income deemed to be received in India has to be read with section 198 as they are a single code. Section 5(1)(c) is on a different footing and such income which has been deducted at source abroad will not be counted for the purpose of computing the total income of the assessee for tax liability in India¹⁶.

6.2 Entire TDS is income received

In Y. Rathiesh¹⁷, the assessee had lent monies to two parties on interest. The assessee followed cash system of accounting for interest on one loan while he adopted mercantile system for the interest on the other loan. As a result, he did not pay the tax on the interest payable to him by the first company since interest was not received, though he claimed credit for the TDS made in that behalf. The Andhra Pradesh High Court observed that the assessee “cannot be permitted to blow hot and cold at one and the same time” and must desist from having the best of both the systems and discarding what is disadvantageous to him. The Court held that if the assessee intends to treat the tax deducted as a component of tax paid, the income corresponding to the TDS must form part of the returns and assessment. On the other hand, if he intends to pay tax on the interest as and when he receives it, the amount covered by the TDS can be treated as just income outstanding till the actual date of receipt. The Court further held that whenever an amount deducted as tax at source becomes incapable of being adjusted or counted towards tax payable, it acquires the character of income. In such an event, it partakes the character of any other income and is liable to be dealt with accordingly, in the order of assessment. The Court held that the assessee is not permitted to be given credit of the TDS towards tax and on the other hand, the TDS shall be treated as an item of income for the concerned assessment year.

6.3 TDS should, otherwise, be income

The deeming provision contained in section 198 has limitations. The provisions of section 198 and other sections are machinery and not charging provisions. Thus, not all tax deducted at source can be deemed to be income received of the deductee. In Hans Raj Carriers¹⁸, the transporter entered into a contract to provide truck owners to a customer on commission. The customer paid the truck owners directly and paid only the commission to the assessee. However, the customer deducted tax on the entire freight. The Assessing Officer treated the amount on which tax was deducted at source as the income of the assessee. The ITAT did not agree to this contention and held that the deduction of tax is not a levy of tax but merely one of the modes of collection of tax. The amount on which TDS is deducted is subject to charge as per the provisions of the Act. As only the commission amount out of the entire freight amount is the income of the assessee, there is no occasion to tax the entire freight income on which tax is deducted as income of the assessee.

In Reeta Loiya¹⁹, where the facts were similar to Hans Raj Carriers, the Assessing Officer held the amount of tax deducted at source as income of the assessee pursuant to the provisions of section 198 of the Act. The ITAT disagreed with the Assessing Officer and held that provisions of section 198 are merely machinery provisions and do not affect determination of income and its chargeability.

In Satoru Tanaka²⁰, the employer inadvertently paid to the Central Government more than what was due and the excess amount paid was refunded to assessee-employee. The ITAT held that such excess amount of tax deposited by the employer and refunded to the assessee could not be treated either as salary or as taxable perquisite in his hands. The ITAT observed that the employer had a statutory obligation to pay to the Central Government only tax on assessee’s income for services rendered. Any excess amount deposited could not belong to the assessee. As the amount was returnable to the employer, the same cannot be treated as taxable income in the hands of the assessee.

However, with the expansion of scope of TDS, now TDS is extended to items which are not in the nature of income, e.g., TDS under section 194N for cash withdrawals. Obviously, such withdrawals cannot partake the character of income, and the second proviso to section 198 recognises this and carves out an exception for the same.

6.4 TDS income deemed to be received as per method of accounting followed

In PHE Consultants, the assessee received during the year an advance from a customer net of tax deducted at source. The assessee commenced his work and offered a small portion as its income for the year but claimed credit for the entire TDS. The balance amount of advance received was disclosed as a liability in its balance sheet. The Assessing Officer contended that the TDS amount is deemed to be income received by the assessee as per section 198 and accordingly added the same to the total income. The ITAT noted that, though section 198 provides that the tax deducted at source shall be deemed to be income received, it does not specify the year in which the said deeming provisions applies. Further, the section provides that the tax deducted is deemed to be income received “for the purpose of computing the income of an assessee.” The ITAT held that the income deemed to have been received under section 198 is to be computed in accordance with the provisions of section 145, meaning thereby, the TDS amount, per se, cannot be considered as income of the assessee by disregarding the method of accounting followed by the assessee. The ITAT held that the Assessing Officer was not justified in assessing the TDS amount as income by disregarding the method of accounting followed by the assessee and without examining whether the assessee has offered gross amount of consultancy charges.

6.5 Amount on which TDS claimed not automatically income

Where TDS is claimed as credit, it does not follow that income pertaining to that TDS is income assessable for that year²¹. In this case, the assessee received an amount towards service contract out of which he treated a part as advance to be offered as income in the future years following the Accounting Standard 9 dealing with Revenue Recognition. The Assessing Officer added the balance amount not offered as income in the current year as ‘suppression of sales’ on the ground that the assessee had taken credit of the entire TDS. The ITAT agreed with the assessee’s treatment and held that deduction of tax for the payment is one of the deciding facts for recognize the revenue of a particular year, but TDS in itself does not mean that the whole amount mentioned in it should be taxed in a particular year; deduction of tax and completion of assessment are two different things while finalizing the tax liability of the assessee, the AO is required to take all the facts and circumstances of the case and not only the TDS certificate.

6.6 Mismatch with Form 26AS

In LSG Sky Chef²², the Revenue declined to give credit for tax deducted at source on the ground that the said amounts were not appearing in Form 26AS (r/w rule 31AB and sections 203AA and 206C(5)) of the assessee. The ITAT held that though matching of TDS credit with Form 26AS is part of a ‘wholesome procedure’ designed by the Revenue for accounting of TDS (and TCS), the burden of proving as to why the said statement does not reflect the details of the entire tax deducted at source cannot be placed on an assessee-deductee. The assessee, by furnishing the TDS certificate/s bearing the full details of the tax deducted at source, credit for which is being claimed, has discharged the primary onus on it toward claiming credit in its respect. Under the current procedure, TDS certificates have to be generated only online from the TRACES Portal of the Department, and practically, there would be no occasion for mismatch of Form 26AS and the TDS certificates.

However, the procedure of reconciliation with Form 26AS has another dimension. The revenue expects the taxpayers to reconcile the gross payments as per Form 26AS with that as per the financials. In cases where there are a large number of entries, it may be practically difficult to reconcile the same, with some parties accounting for the invoices in different years, and also different methods of accounting. The Mumbai Bench of the ITAT has held²³ as follows.

In ground No. 10 of appeal, the assessee has assailed addition made on account of mismatch in books of the assessee and tax statement in Form 26AS. The contention of the assessee is that the assessee has furnished reconciliation statement, the same is at page No. 69 of the Paper Book. A perusal of the draft assessment order shows that the AO had proposed addition of Rs. 7,30,99,620 on account of mismatch in Form 26AS. In proceedings before the DRP, the assessee furnished additional evidence. Remand report was sought from the AO on additional evidences filed by the assessee. After reconciliation the difference was reduced to Rs. 30,29,102. The assessee in order to reconcile the difference furnished statements giving party-wise details of receipts on which tax was deducted. The statements were further classified into tonnage & non-tonnage receipts. Since, the assessee has been able to reconcile substantial entries and there was discrepancy only in respect of minuscule part of entries in Form 26AS, it would not be justified to make addition merely on the basis of AIR information keeping in view the fact that the assessee is in shipping business having tonnage & non-tonnage receipts, there would always be some possibility of mismatch in Form 26AS vis-a-vis books of assessee. We find that in the case of A.F. Ferguson & Co. vs. JCIT (supra), the Tribunal held that the Revenue cannot made addition solely on the basis of AIR information. The assessee cannot be asked to prove in negative, the onus is on the AO to prove that the assessee has received the income. The relevant extract of the findings of Tribunal read as under:

We have considered the rival contentions of the ld. representatives of the parties. It is an undisputed fact on the file that the professional fees shown by the assessee in its P&L account far exceeds than the amount shown in the AIR information. Even the assessee has reconciled the major portion of the receipts. It has not been denied by the Revenue Authorities that full and complete details of the parties are not mentioned in the AIR information. The addition in this case has been made by the lower authorities solely on the basis of AIR information. In our view, the addition, made solely on the basis of AIR M/s. A.F. Ferguson & Co. information, especially in the absence of full details of parties and when the professional receipts declared by the assessee far exceeds than the amount mentioned in the AIR information, is not sustainable in the eyes of law. Our above view is fortified with the decision of the Bangalore Bench of the Tribunal in the case of “DCIT vs. Shree G. Selva Kumar” in ITA No. 868/ Bang/2009 decided on 22-10-2010 and another in the case of “Mrs. Arati Raman vs. DCIT” in ITA No. 245/Bang/12 decided on 05-10-2012 wherein it has been held that the assessment order based only on the AIR information would not stand in the eyes of law. If the assessee denies that he is in receipt of income from a particular source, it is for the AO to prove that the assessee has received income as the assessee cannot prove the negative. Reliance can also be placed on the decision of Mumbai Bench of Tribunal in the case of Shri S. Ganesh vs. ACIT in ITA No. 527/M/2010 decided on 08-12-2010 wherein the Tribunal has held that in the absence of any material brought by the revenue authorities that the assessee has received amount more than the professional fees which has been declared by him in the P&L account and when the professional income declared by the assessee far exceeds the professional fees shown in the AIR information, then additions solely based on the AIR information are not sustainable. In view of our above observations and in the facts and circumstances of the case, the additions made by the Revenue solely based on the AIR information are not sustainable and the same are hereby ordered to be deleted. Ergo, in the facts of case and in light of above decision, we find no reason to sustain addition made in respect of mismatch in Form 26AS. Consequently, ground No. 10 of the appeal is allowed.

7. Credit for tax deducted at source [Section 199]

Section 199 provides for tax deducted at source to be treated as payment of tax on behalf of two classes of persons: (i) the person from whose income the deduction was made, and (ii) the owner of the security, or depositor or owner of property or of unitholder or of the shareholder, as the case may be.

Section 198 deems tax deducted at source under the provisions of Chapter XVII as income of the assessee for the purposes of computation of income. Tax paid by employer on non-monetary perquisites under section 10(10CC) is not covered under this deeming provision. This is because the non-monetary perquisites themselves are exempt from being included as income in the hands of the employees.

Such tax deducted at source is, however, treated as the tax paid on behalf of the employee person in respect of whose income such payment of tax has been made²⁴. The tax deducted on such non-monetary perquisites is actually a tax on the income of the employee and this provision enables a non-resident employee from being entitled to credit for such tax deducted in his home country for doubly taxed income.

7.1 Pre-requisite for credit

The old procedure for submission of TDS certificate furnished under section 203 for grant of credit has been done away with effective from 01-04-2009. Under the new provisions, credit in respect of tax deducted or tax paid would be given as per rule 37BA. As per rule 37BA, credit for TDS shall be granted on the basis of the information provided by the deductor (which appears in Form 26AS of the assessee) and the information in the return of income for claim of TDS credit.

7.2 Rule 37BA

Rule 37BA(1) of the Act provides rules relating to have credit for the purpose of section 199 of the Act as is provided in section 199(3) of the Act. Rule 37BA(3):

1. Mandates that credit for tax deducted at source and credited to the Government shall be given for the assessment year for which such income is assessable.
2. Rule 37BA(3) provides that where tax has been deducted at source paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. As per the said rule, an assessee is entitled to get credit of the tax deducted at source once such income is included in his total income. But this rule is required to be not read literally but in context. The following case law emphasises that.

8. Credit available in which year

Cash method of accounting and year of TDS credit

In Pushpa Vijoy²⁵, the assessee, following cash method of accounting, did not offer interest income from bank deposits but claimed the entire TDS on such interest as tax paid for the year. The assessee contended that the TDS amount itself should be assessed as “income” and the assessees are entitled to refund of the balance amount. The Kerala High Court did not agree with the assessee and observed that, under section 199, the assessee is entitled to credit based on TDS certificate only in the assessment year in which income from which tax is deducted is assessed. According to the Court, because of the practical difficulty to retain TDS certificates for several years until the interest is returned for assessment on cash basis, prudent assessees should return income on which tax is recovered and remitted by the payer in the assessment year following the year in which such income is subject to deduction of tax and remittance by the payer. The Court observed that, if income is not assessable in the assessment year and at the same time assessees are entitled to credit of tax recovered and remitted in respect of such income, the Department will be compelled to refund the entire tax amount every year together with mandatory interest, which will defeat the purpose of TDS provisions in the Act.

In Chander Shekhar Aggarwal²⁶, the assessee claimed the entire tax deducted at source contained in a TDS certificate but offered only a portion of the relevant income due to cash system of accounting followed by him. The Assessing Officer contended that the assessee is not entitled to credit for the TDS in that assessment year if the relatable amount of income mentioned in the TDS certificate is not assessable in that year. The ITAT held that the TDS deducted by a deductor on behalf of the assessee and offered as income is to be allowed as credit in the year of deduction of tax at source. According to the ITAT, rule 37BA(3) is only applicable where entire compensation is received in advance but the same is not assessable to tax in that year but is assessable in a number of years. A literal interpretation of the rule would mean that, in a case where an assessee follows cash system of accounting and the assessee never realises the income earned and does not offer the same to tax, the tax deducted by the deductor at the time of credit of such expense will never be available for credit to him. Hence, the ITAT concluded, rule 37BA(3) has no applicability, where assessee follows cash system of accounting and the said rule cannot be interpreted to say that tax deducted at source and deposited to the account of the Central Government is though income of the assessee but is not eligible for credit of tax in the year when such TDS was offered as income.

The rulings in Pushpa Vijoy and Chander Shekhar Aggarwal are diametrically opposite in their conclusions. In Pushpa Vijoy, the Kerala High Court was concerned with section 199 before it was substituted with effect from 1-4-2008. The pre-substituted section required credit for tax deducted at source to be available ‘for the assessment year for which such income is assessable’. In contrast, in Chander Shekhar Aggarwal, the Delhi Bench of the ITAT was dealing with the section after its substitution and read with rule 37BA. Though the mandate in rule 37BA(3) is on similar lines, a literal interpretation of the same would lead to absurdity as was explained in the latter case.

1. Transmission Corporation of P. Ltd. vs. CIT [1999] 105 Taxman 742/239 ITR 587 (SC).
2. GE India Technology  (P.) Ltd. vs. Commissioner of Income-tax [2010] 193 Taxman 234/7 taxmann.com 18 (SC).
3. Circular No. 285 dated 21-10-1980 and Circular No. 769 dated 6-8-1998 (in the context of
   section 195).
4. Commissioner of Income-tax vs. Madras Fertilisers Ltd. [1985] 20 Taxman 349 (Mad.).
5. Commissioner of Income-tax vs. Emilio Ruiz Berdejo [2010] 186 Taxman 390/320 ITR 190 (Bom).
6. Hindustan Coca Cola Beverages (P.) Ltd. Commissioner of Income-tax [2007] 163 Taxman 355/293 ITR 226 (SC).
7. Commissioner of Income tax vs. Adidas India Marketing P. Ltd. [2006] 157 Taxman 519/[2007] 288 ITR 379 (Delhi).
8. Section 206C(6).
9. Section 202
10. Ansaldo Engergia vs. SPA  ITO [2003] 133 Taxman 795/261 ITR 476 (Mad.).
11. Larsen and Tubro vs. ACIT [2010] 190 Taxman 373/326 ITR 514 (Bom); SIS Live [2011] 15 taxmann.com 131/[2012] 211 Taxman 151 (Delhi).
12. Circular No. 4 of 2002 dated 16-7-2002.
13. Vide Notification No. Circular No. SO 1323, dated 13-6-2012.
14. 8733-8734 of 2018 (SC)/[2021] 125 taxmann.com 42/281 Taxman 19 (SC).
15. Sunil Shinde vs. Assistant Commissioner of Income-tax, Circle-14(1), Bengaluru [2017] 85 taxmann.com 297/166 ITD 597 (Bangalore-Trib.).
16. CIT vs. Yawar Rashid [1996] 218 ITR 699 (Madhya Pradesh).
17. Y. Rathiesh vs. Commissioner of Income-tax [2014] 51 taxmann.com 59/227 Taxman 202 (Andhra Pradesh).
18. Income-tax Officer vs. Hans Road Carriers (P.) Ltd. [2010] 7 taxmann.com 39/[2011] 45 SOT 149 (Ahmedabad).
19. Assistant Commissioner of Income-tax vs. Smt. Reeta Loiya [2013] 30 taxmann.com 106 (Bilaspur-Trib.).
20. Satoru Tanaka vs. Assistant Commissioner of Income-tax [2009] 30 SOT 9 (Delhi).
21. Deputy Commissioner of Income-tax vs. Rajeev G. Kalathil [2014] 51 taxmann.com 514/[2015] 67 SOT 52 (Mumbai-Trib.).
22. LSG Sky Chef India P. Ltd. vs. Deputy Commissioner of Income-tax [2014] 45 taxmann.com 256/148 ITD 367 (Mumbai-Trib.).
23. Greatship (India) Ltd vs. DCIT ITA No. 1457/MUM/2016 (A.Y. 2011-12) dated 31-8-2021.
24. Section 199(2).
25. CIT vs. Pushpa Vijoy & Anr. [2012] 19 taxmann.com 157/206 Taxman 22/247 CTR 575 (Kerala).
26. Chander Shekhar Aggarwal vs. Assistant Commissioner of Income-tax, Circle 37(1), New Delhi [2016] 67 taxmann.com 62/157 ITD 626 (Delhi-Trib.).