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Income Tax Appellate Tribunal, JAIPUR BENCHES ‘B’ JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1025/JP/2019
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘B’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1025/JP/2019 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke M/s S. Bhandari & Co. Deputy Commissioner of Vs. Chartered Accountants, Income Tax, Circle-07, P-7, Tilak Marg, C- Scheme, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAGFS7543C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P. P. Pareek (CA) jktLo dh vksj ls@ Revenue by : Smt Runi Pal (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/11/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 29/11/2019 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of ld. CIT(A)-3, Jaipur dated 11.06.2019 for A.Y 2014-15 and the sole ground of appeal relates to denial of credit of tax deducted at source amounting to Rs. 1,23,596/-
The ld. AR submitted that the assessee is a firm of Chartered Accountants and it follows cash basis of accounting and the professional fees received during the year is booked as income and credit of TDS is taken corresponding to income offered to tax and the remaining TDS credit is carried forward to the next years. On perusal of the records, it was noticed that an amount of Rs. 11 lacs received from M/s K.C. India Ltd was booked under professional fees and duly offered to tax in the return of income. However due to an over site by the assessee, the corresponding credit of TDS amounting to Rs. 1,23,596/- was carried forward to subsequent year and the assessment proceedings were completed accordingly. Subsequently, the assessee moved M/s S. Bhandari & Co., Jaipur Vs. DCIT, Cirecle-7, Jaipur an application for rectification of mistake u/s 154 on 10.03.2017 seeking credit of TDS in respect of income already offered to tax and pursuant thereto, the AO passed the rectification order dated 29.09.2017 where the claim of the assessee was found correct and the findings of the AO reads as under:-
“In this case the return of income for AY 2014-15 was filed on 28.11.2014 on total income of Rs. 66,92,510/- claiming refund of Rs. 6,34,301/-. Further the order u/s 143(3) was passed on 21.11.2016 at total income of Rs. 66,92,510/- giving TDS credit of Rs. 21,09,249/- as per 26AS matching. Thereafter, the assessee had filed an application on 01.03.2017 to the undersigned and claimed that refund has not been issued as per claim in return of income. The application of assessee is considered carefully and on perusal of the record, the claim of the assessee is found correct and credit of the TDS is now given. Therefore, the mistake being apparent from record is rectified accordingly.”
Subsequently, when the assessee received the cheque of income tax refund for the subject assessment year on 03.07.2018, it was noticed that even though the AO stated in his rectification order u/s 154 that the claim of the assessee has been found correct, however, while processing of refund claim, credit of Rs. 1,23,596/- was again not given to the assessee. As soon as the assessee received the refund cheque on 03.07.2018 wherein there was short credit of TDS of Rs. 1,23,596/-, the assessee moved an appeal before the ld. CIT(A) on 25.07.2018. It was submitted that the ld. CIT(A) has dismissed the appeal of the assessee holding that since the order u/s 154 was passed on 29.09.2017, there was delay in filing the appeal and therefore the appeal of the assessee was dismissed at admission stage. In this regard, it was submitted by the ld. 2 M/s S. Bhandari & Co., Jaipur Vs. DCIT, Cirecle-7, Jaipur AR that as far as the order passed by the AO u/s 154 is concerned, the assessee prayer was accepted by the AO. Therefore, there was no cause of action which lies with the assessee at that point in time in terms of moving any appeal before the ld. CIT(A). However, only when the assessee received the cheque of income tax refund pursuant the order of section 154, it was realized that even though the directions have been given to allow the credit towards TDS, however, the same was not given effect to while processing the payment towards the refund cheque. It was accordingly submitted that only on receipt of cheque, the assessee came to know that orders so passed by the AO u/s 154 has not been acted upon by the Department and accordingly assessee moved the appeal before the ld. CIT(A). It was accordingly submitted that there was sufficient reason for not preferring the appeal on receipt of order u/s 154 and only on receipt of the income tax refund, the cause of action lies and therefore, the delay which has happened is beyond the control of the assessee and the same may be condoned. On merits, it was submitted that the assessee has offered an amount of Rs. 11 lacs received from M/s K. C. India Ltd. during the year and therefore corresponding TDS thereon amounting to Rs. 1,23,596/- as reflected in Form No. 26AS should be allowed to the assessee.
The ld. DR is heard who has opposed the said prayer of ld. AR. It was submitted that there was an inordinate delay in filing the appeal before the ld CIT(A) and the same has rightly been dismissed as barred by limitation.
After hearing both the parties and pursuing available material on record, we note that the AO has passed specific directions u/s 154 allowing the assessee’s claim towards grant of TDS credit and only when the assessee received the cheque towards the income tax refund, there was apparent inconsistency between the order passed u/s 154 and the processing of the income tax refund wherein the assessee was not granted credit for the TDS 3 M/s S. Bhandari & Co., Jaipur Vs. DCIT, Cirecle-7, Jaipur which was directed to be allowed by the AO while passing the order u/s 154 of the Act. Therefore, where the Department has accepted the claim of the assessee towards short credit of TDS, it should have suo-moto carried out the rectification and no cause of action lies with the assessee firm. Having said that, where the assessee feeling aggrieved has moved an appeal before the ld CIT(A), no doubt the order under appeal is order passed by the AO u/s 154 and the appeal should normally be filed within thirty days of receipt of the order. However, in the instant case, no fault lies with the assessee as it was under the impression that its claim has been accepted as apparent from reading of the rectification order passed u/s 154 and only on receipt of refund cheque, the assessee realized that the credit of TDS has still not been granted to it. Thereafter, the assessee has moved an appeal before the ld CIT(A) (on 25.07.2018) within a period of few days of receipt of refund cheque (on 3.07.2018). We therefore find that there is a reasonable cause beyond the control of the assessee in preferring the appeal before the ld CIT(A) and the delay so happened is hereby condoned.
On merits, we find that it is undisputed fact that the assessee has offered an amount of Rs. 11 lacs received from M/s K. C. India Ltd. during the year. Therefore where the income has been offered to tax and brought to tax by the Assessing officer, the assessee is legal eligible and well within its right to claim corresponding TDS thereon amounting to Rs. 1,23,596/- as reflected in Form No. 26AS. The AO is accordingly directed to give the TDS credit of Rs. 1,23,596/- to the assessee.
In the result, appeal of the assessee is allowed.
M/s S. Bhandari & Co., Jaipur Vs. DCIT, Cirecle-7, Jaipur Order pronounced in the open Court on 29/11/2019.