Testec Asia Limited v. The Dy.Director of Income Tax

Parties Involved

Facts Summary

Testec Asia Limited, a foreign company, invested in American Depository Receipts (ADRs) of Vedanta Ltd. from FY 2012-13 to 2016-17. In November 2021, Vedanta Ltd. announced the redemption of these ADRs, and Citibank NA was appointed as the depository to manage the redemption process. Upon redemption, Vedanta Ltd. withheld tax amounting to Rs. 57,28,565 (equivalent to USD 76,493) since the assessee did not have a PAN in India at that time and could not provide the necessary information to Citibank NA before the cut-off date. The assessee subsequently obtained a PAN and filed a revised ITR in India on December 31, 2022, declaring income of Rs. 13,44,540 from the redemption of ADRs under Section 115AC of the Act. The assessee sought a refund of Rs. 55,88,730. The assessee submitted its PAN and confirmations from Credit Suisse AG to Citibank NA to facilitate the transfer of TDS credit. Despite continuous coordination, no TDS credit was reflected in Form 26AS at the time of filing the ITR. The CIT(A) held that the assessee had not adequately complied with Rule 37BA of the Income Tax Rules, 1962, and had failed to take sufficient actions to ensure the transfer of TDS credit. The CIT(A) decided against the assessee, stating that the necessary steps were not taken as required by the rules.…

Legal Issues

• 1. Validity of the Order
• 2. TDS claim not allowed u/s 143(1) of the Act
• 3. TDS credit denial

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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