MUTHUSWAMY NAGARAJAN IYER,MUMBAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI

I have heard the counsels for both the parties and perused the material place on record, considering the entire factual position as explained before me and also keeping in view, the principles laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that were substantial justice is pitted against technicalities of non-deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which occurred in filing the appeal and construing the expression "sufficient cause" liberally I am inclined to condone the delay in filing the appeal before Ld. CIT(A).

From the records, I noticed that as per the submissions of the assessee, he was a salaried employee of Karvy Stock Broking Ltd and had filed its return of income for the year under consideration declaring Rs.38,70,910/- on which Income Tax of Rs.9,74,007 was payable out of which Rs. 9,69,825/- was paid through ITTDS on salary deducted by the employer i.e Karvy Stock Broking Ltd . Since the employer of the assessee had deducted TDS, in this regard copies of payslips evidencing deduction of income tax by Karvy Stock Broking Ltd have been placed Dhanbir Suri,. Mumbai. on record. Therefore, as per assessee, after adjusting the amount deducted by the employer, the assessee had also paid balance amount of Rs.44,150/- vide Challan.

After having gone through the facts of the case and also hearing the parties, I found that AO disallowed the entire claim of TDS credit as the said amount was not updated in form 26AS therefore after analysing the documents placed on record and the arguments put forth by the assessee, I am of the view that assessee is entitled for the TDS credit already deducted by the employer Karvy Stock Broking Ltd and the denial of such credit would cause undue hardship and amounts to penalising the assessee for an Act beyond his control. Therefore in my view the ends of justice would be met, in case the matter is restored back to the file of AO for limited purpose of verification regarding the depositing of the deducted TDS by the employer with the Central Government and thereafter to allow credit to the assessee. Therefore, matter be restored back to AO with the above directions.

Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the AO independently in accordance with law.