DIMSOLN TECHNOLOGY LLP,GHATKOPAR EAST, MUMBAI. vs. ITO, WARD 4(2)(1), MUMBAI, AAYAKAR BHAVAN, MUMBAI

This appeal by the assessee is directed against the order dated 20.03.2026 passed by the learned Additional/Joint Commissioner of Income-tax (Appeals), Faridabad ["Ld. CIT(A)"], under section 250 of the Income-tax Act, 1961 ("the Act"), arising from the order dated 20.01.2026 passed by the Jurisdictional Assessing Officer ("JAO") under section 154 read with section 143(1) of the Act for Assessment Year 2024-25.

The assessee has also filed an additional ground seeking grant of TDS credit of Rs. 18,90,573 together with interest under section 244A of the Act. The additional ground is connected with the issue already arising from the record and is accordingly admitted.

Briefly stated, the assessee, a limited liability partnership engaged in providing technology solutions and consultancy services, filed its return of income on 08.11.2024 declaring total income of Rs. 47,24,060. In the return, it claimed TDS credit of Rs. 32,08,920 and the return was processed under section 143(1) granting such credit. Thereafter, the assessee filed an application under section 154 claiming further TDS credit of Rs. 18,90,573 on the footing that Form No. 26AS reflected aggregate TDS of Rs. 50,99,493 and that the income corresponding to the entire TDS had been offered to tax.

The JAO rejected the rectification application holding that the additional TDS credit had not been claimed in the return, that the claim required verification and, therefore, did not constitute a mistake 2

Before us, the Ld. Authorised Representative submitted that the omission to claim the entire TDS was inadvertent; that the balance credit of Rs. 18,90,573 is reflected in Form No. 26AS; and that the corresponding income has already been offered to tax. It was submitted that the credit ought not to be denied merely because the full amount was not claimed in the return. The Ld. AR requested that the matter be restored to the JAO for verification and grant of due credit together with interest under section 244A.

The Ld. Departmental Representative relied upon the orders of the authorities below.

We have heard the rival submissions and perused the material available on record. The limited issue is whether the assessee can be granted credit of the balance TDS of Rs. 18,90,573, stated to be reflected in Form No. 26AS, subject to verification that the income corresponding to such TDS has been offered to tax. Under section 199 of the Act read with Rule 37BA of the Income-tax Rules, 1962, credit for tax deducted at source is to be allowed in the assessment year in which the corresponding income is assessable. Therefore, the relevant verification is whether the TDS stands reflected against the assessee and whether the income relatable thereto has been offered to tax in the relevant year.

In the facts of the present case, the claim cannot be rejected merely for the reason that the entire TDS credit was not claimed in the original return. At the same time, the claim requires factual verification 3

The additional ground seeking interest under section 244A is consequential to the grant of TDS credit. Therefore, it does not require separate adjudication. The JAO is directed to grant interest under section 244A, if any, in accordance with law while giving effect to this order.

In the result, the appeal filed by the assessee is allowed for statistical purposes.