BRIG RESOLUTION SERVICES PRIVATE LIMITED,MUMBAI vs. CIRCLE 14(1)(2), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
20.08.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 3 Bengaluru [in short ‘the Ld. CIT(A)’] for assessment year 2020-21. 2. Briefly stated, the assessee filed the return of income on 22.01.2021 declaring total income of ₹76,90,890/-. The return was processed by the Cen was issued under se
Act”) on 25.06.2021
deducted at source the claim of ₹13,06,1
2.1 The short grant on the ground that t
26AS for the relevant filed by the assessee
2.2 The assessee ex deposited the tax in t the next assessment
Press Release dated by 25%. Accordingly instead of ₹2,22,000/
₹1,66,500/- only.
2.3 The Ld. CIT(A) entitled to TDS cred
However, he declined credit did not reflec
Emphasis was pla
Department and the CIT(A) directed that Brig Resolu
ITA ntral Processing Centre (CPC) an ection 143(1) of the Income-tax
1. Under the said intimation,
(TDS) was granted at ₹10,84,1
52/- made by the assessee in th t of TDS credit amounting to ₹
the said amount was not reflect t assessment year. The rectifica under section 154 of the Act wa xplained that the deductor had the subsequent financial year, c t year, and further that pursua
30.05.2020, the rate of TDS ha y, the deductor deposited TDS
/-. The assessee therefore restri acknowledged that the asses dit corresponding to the income d to grant relief on the groun ct in Form No. 26AS for the aced on the system-driven e need to avoid manual interv
TDS credit could be allowed ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
nd an intimation
Act, 1961 (“the credit for tax
52/- as against he return.
₹2,22,000/- was ted in Form No.
ation application as also rejected.
d deducted and corresponding to ant to the CBDT ad been reduced of ₹1,66,500/- icted its claim to ssee was legally e offered to tax.
d that the TDS e relevant year.
nature of the ention. The Ld.
d only after the deductor filed a corre assessee’s Form No allowed for statistica accordingly rejected b
“5.1.9. Howe paras, though for the incom
DEDUCTOR h
22 to the tun getting reflect that the Dep anomaly in th denied by the would be unr grant manua
Department is the benefit of refund related
Hence, in view allow the TDS
Deductor has reflected on t grounds stand
3. Before us, the decision of the Coord
(ITA Nos. 3004 & 30
wherein an identical were issued for grant
4. We have heard t on record. The und raised bills on the ce as income in the yea
Brig Resolu
ITA ection statement and the credit o. 26AS. The appeal was acc l purposes. The said claim of th by the Ld. CIT(A) observing as u ever, as has been, mentioned in the h the Appellant is legally entitled to get th me offered to tax, however, owing to the f has deducted and deposited the TDS in th ne of Rs. 1,66,500/-, the correct TDS ted on the 26AS of the Appellant. It may a artment is now completely system driv he returns and forms tends to be noticed e System. Moreover, for the fault of the DE reasonable to keep pushing the onus on al TDS credits when the whole emph s to go digital to make things simpler an f the taxpayers and at the same time d frauds which the manual system is su w of the above-mentioned facts, the AO i
S credit to the Appellant only after ensu filed the correction statement and the TD the PAN of the Appellant. The Appeal file ds Partly allowed for statistical purposes
Ld. counsel for the assessee dinate Bench in Sanjeev Rajend
05/Mum/2022) for Assessmen issue was examined and approp ting TDS credit.
the rival submissions and perus isputed factual position is tha ertain parties and shown the r ar under consideration following ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
t reflected in the cordingly partly he assessee was under:
proceeding's he TDS credit fact that the he A.Y 2021- credit is not also be noted ven and any d and rightly
EDUCTOR, it to the AO to hasis of the nd faster for prevent any usceptible to.
is directed to uring that the DS credit gets ed on all the .”
relied upon the dra Pandit v. ITO t Year 2021-22, priate directions sed the material at the assessee relevant amount g the mercantile system of account. H rendered, booked exp deducted in the subs
4.1 Now, the conten deducted in the sub allowed to the assess
4.2 Section 199 of t
Rules, 1962, provide assessment year for w
The provision seeks between accrual of in 4.3 But in the insta
TDS which was not a Government account possible. Firstly, the year in which the tax income is declared. S of TDS in the year in restriction of the i deduction of tax at so not deducted by the paid by assessee wa been decided by the T
Brig Resolu
ITA

However, the party to whom th penses in the subsequent year a sequent year.
ntion of the assessee, is that the bsequent year credit of the s see in the year under considerat the Act, read with Rule 37BA of es that credit for TDS shall b which the corresponding incom s to address the inherent tim ncome and deduction of tax at so ant case, the assessee is seekin at all deducted and paid by the t. In such a situation, the two o assessee could be granted credi x is deducted irrespective of th
Secondly, the assessee could b n year under consideration bu interest as the assessee was ource on corresponding income e dedcutor, then the same was ay of the advance tax. The iden
Tribunal in the case of Sanjeev R ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
he services were and tax was also e tax which was ame should be ion f the Income-tax be given in the me is assessable.
ming mismatch ource.
ng credit for the deductor to the options could be it of TDS for the he year in which e allowed credit t subject to the s subjected to but the tax was s required to be ntical issue has Rajendra Pandit

(supra), the relevant as under:
6.6
After r precedent on the benefit of produce TDS
TDS is disclo assessable. T under:
“5.7 The ded is not requ income, reco on accrual or on income w assessable.
time, betwee of tax liabili relevant pro this mismat while the co be received o yet to accru
191 and Ru shall be ava income is as of section 1
rules, 1962
amount so d for the ass assessable.
TDS as per s
(a) the ass amount of ta
(b) show tha return of the Thus, both satisfied. It i entitled to h
Brig Resolu
ITA finding of the Co-ordinate Benc referring the provisions of the law as w the issue, the Ld. CIT(A) concluded tha the TDS, the assessee was required to co certificate, secondly, to show that incom osed in return of income of the assess
The relevant finding of the Ld. CIT(A) is r duction of tax at source does not nece uired to, match alongside the corr ognition of which by the recipient could r on receipt basis. The accrual of the t would arise only on the same being/
There is thus an inherent mismatch, i en the payment of tax (per TDS) and t ity against the corresponding incom visions of law. It is in view of and t tch in time, so that the tax stands rresponding income, though accrued or though received, as by way of an a e, that the law-per section 199 r/w ule 37BA] clarifies that the credit fo ailable for the year for which the corr ssessable. It wold be evident from pla
99 of the Act and Rule 37BA of In that credit is to be given to the assess deducted in the assessment made und sessment year for which Such i
So important conditions for getting section 199 of the Act are essee should produce the certificat ax deducted at source; at income subjected to TDS is disclos assessment year as 'assessable'.
the above-mentioned conditions a is, therefore, clear that the assessee have benefit or credit for the amou ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
ch is reproduced well as judicial at for claiming omply, firstly, me subjected to ment year as reproduced as essarily, or responding d be either tax liability
/becoming in terms of the accrual me qua the to address deducted has yet to advance, is ss. 190 &
or the TDS responding ain reading ncome Tax see for the der this Act income is benefit of te for the sed in the are to be will not be unt though mentioned i income relat assessable income refer of income is only on the p system of ac other reason credit for th when incom basis in the in future w assessable
199 of the A any year b claimed und
5.8 Section declare the T on whose be for the amo certificate in for which su mentioned in to the year links up the income is as is bound to offered to t
Assessing O the income it credit is to b
In other wor of TDS, the the assesse certificate be the certificat only to give has to defer income to be allow credit deducted in f
Brig Resolu
ITA in the certificate for the assessmen table to the amount is not shown a in that assessment year. If instead rable to amount of tax deducted, only found assessable the benefit has to b portion shown. If balance income, on ccounting followed by the assessee o n is found to be assessable in future he balance TDS can be allowed only me is assessable. Credit allowed on year in which the certificate is issued where balance or such income is fou is as per the mandate of provision ct. Any amount which has not been as ut referred in the TDS certificate, er section 199 of the Act.
199 of the Act has two objectives
TDS as payment of tax on behalf of t ehalf the deduction was made and to ount so deducted on the producti n the assessment made for the assess uch income is assessable. The second n section 199 is only to answer the q in which the credit for TDS shall b e credit with assessment year in w ssessable. In other words, the Assess give credit in the year in which the tax. This section 199 does not emp
Officer to determine the year of asses tself but it only mandates the year in be given on the basis of the certificate f ds, when the assessee produces the c
Assessing Officer is required to verif ee has offered the income pertain efore giving credit. If he finds that the te is not shown, the Assessing Office the credit for TDS in that assessment r the credit being given to the year in e assessed. It does not have any m t even where TDS is not deducted future.”
ution Services Pvt. Ltd.
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nt year if and is not d of entire y a portion be allowed account of or for some e, then the y in future n pro rata d and also und to be of section ssessed in cannot be s - one to the person give credit on of the sment year d objective question as e given. It which such sing Officer income is power the ssability of which the furnished.
certificates fy whether ed to the e income of er has not t year and which the mandate to but to be 6.7
We fin provisions of not consider credit that e subsequent a deductor has tax at source
Government to the asses
Rules made deny that no which asses and not app assessment correspondin
Department deny credit o
In the insta following the concerned, subsequent same in the deducted su be allowed t if any on ac the subsequ the finding direct the Ld deducted an property whi under consid
As far as concerned th issued by th directed to verification.
credit of TDS in accordan
Assessing Of already been the assessee not be allow
Brig Resolu
ITA nd that though the Ld. CIT(A) has refe f the law and Rules thereon, howev red the request of the assessee fo either in the year under consideration assessment year. We are of the opinio s been authorized by the Department e on the income of the assessee and d account. The credit of same has to b ssee as per the provisions of the law thereunder and the Department cann o credit shall be granted because in t ssee offered income, tax has not been pearing Form No. 26AS, whereas in s year TDS is appearing in Form No.
ng income is not reflecting th cannot swallow tax paid by the ass of tax deducted, which pertains to the nt case, the assessee has offered t e accrual system. As far as rental if tax has been deducted and dep year, the assessee should be allowe year under consideration of tax which ubsequently. However, the assessee the benefit of the interest on refund w ccount of credit of tax deducted and uent assessment year. We accordingly of the Ld. CIT(A) on the issue-in-dis d. Assessing Officer to verify the amo nd deposited in respect of income fr ich has been shown by the assessee i deration and allow the credit as direc
TDS credit in respect of divided he assessee is directed to furnish TDS he deductor and the Ld. Assessing allow the credit of the said TDS
The Assessing Officer cannot simply d
S and he is bound to verify TDS certifi nce with provisions of law. Fur
Officer is also directed to verify if any n granted in the rectification applicatio e. If so then further benefit of TDS c wed. In view of the our direction a ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
erred to the ver, he did r allowing n or in the on that the t to deduct deposit into be allowed w and the not simply the year in n deducted subsequent
26AS, but here.
The essee and e assessee.
the income income is posited in d credit of h has been could not which arise deposit in y set aside spute and ount of tax from rental in the year cted above.
income is S certificate
Officer is after due decline the ficate issue rther, the y relief has on filed by credit may above, the grounds of a for statistica
4.4 Accordingly, re ordinate Bench, the the Assessing Office assessee in accordan
5. In the result, statistical purposes.
Order pronoun (RAHUL CHA
JUDICIAL M
Mumbai;
Dated: 22/12/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

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Brig Resolu
ITA appeal of the assessee are according al purposes.
espectfully following the findi issue in dispute is restored ba er for allowing the credit of t nce with law after due verification the appeal of the assessee ced in the open Court on 22/ AUDHARY)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu ution Services Pvt. Ltd.
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A No. 6361/MUM/2025
ly allowed ing of the Co- ack to the file of the TDS to the n .
is allowed for 12/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai