AJEET SINGH,GURUGRAM vs. DCIT, CIRCLE 1(1), GURUGRAM

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, B: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.- 2152/Del/2026 [Assessment Year: 2022-23] Ajeet Singh, DCIT, E-1001, Bestech Park View SPA Circle 1(1), Next, Sector-67, Gurugram-122101. Vs Vanijya Nikunj, Shankar Chowk Rd Phase V, Udyog Vihar, Sector- 19, Gurugram Haryana-122016. PAN- AQSPS6567N Assessee Revenue Assessee by Ms. Rajni Goswami, CA Revenue by Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 16.07.2026 Date of Pronouncement 22.07.2026 ORDER Per Renu Jauhri, Accountant Member:

This appeal by the assessee is directed against the order dated 16.01.2026 of the Commissioner of Income Tax (Appeals) ADDL/ JCIT, (A), Panaji, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Intimation order 05.07.2024 passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the ADIT, CPC, Bengaluru, (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2022-23.

ITA No.- 2152/Del/2026 Ajeet Singh 2. The assessee has raised the following grounds of appeal: - “1. The learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the action of CPC in restricting the TDS credit to Rs. 29,34,048 as against Rs. 37,48,277 claimed by the appellant and duly reflected in Form 26AS. 2. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the entire TDS of Rs. 37,48,277 was deducted in the name and PAN of the appellant and the corresponding income has been duly offered to tax in the return of income for Assessment Year 2022-23. 3. The learned Commissioner of Income Tax (Appeals) erred in upholding the illegal and arbitrary proportionate TDS credit formula applied by CPC, which is contrary to the provisions of Section 199 of the Income-tax Act, 1961 read with Rule 37BA of the Income-tax Rules, 1962. 4. The learned Commissioner of Income Tax (Appeals) failed to appreciate that Form 26AS is a statutory document and once TDS is reflected therein against the PAN of the assessee, the credit cannot be denied on technical, computational or procedural grounds. 5. The learned Commissioner of Income Tax (Appeals) erred in not considering the detailed reconciliation of income vis-à-vis Form 26AS submitted by the appellant during the appellate proceedings, which clearly explained the difference between gross receipts reflected in Form 26AS and taxable income reported in the return. 6. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the rectification order passed by CPC under Section 154 was without assigning any reasons and without granting an opportunity of being heard, thereby violating the principles of natural justice. 7. The learned Commissioner of Income Tax (Appeals) erred in ignoring settled judicial precedents which clearly hold that TDS credit cannot be denied where income is duly offered to tax and TDS is reflected in Form 26AS. 8. The learned Commissioner of Income Tax (Appeals) erred in sustaining the consequential levy of interest under Sections 234A, 234B and 234C, which arises solely due to the wrongful denial of TDS credit. 9. The learned Commissioner of Income Tax (Appeals) failed to appreciate that due to the wrongful denial of TDS credit and resultant incorrect demand for Assessment Year 2022-23, the Department has adjusted or withheld refunds pertaining to subsequent assessment years, thereby causing continuing prejudice to the appellant. 10. The appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the time of hearing.”

ITA No.- 2152/Del/2026 Ajeet Singh the CPC restricted the TDS credit to Rs. 29,34,048/- denying the balance of Rs. 8,14,229/- for which no reason was discernible from the system generated computation. The assessee, therefore, filed an application for rectification u/s 154 and the same was rejected.

3.1 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, Ld. CIT(A) dismissed the appeal holding that the action of CPC is strictly as per law and with the following observations:

“7.5 Ground no.05 raised by the appellant is related with the issue that the appellant prays for allowance of entire TDS credit of Rs. 37,48,277/-which is adjudicated on the basis of facts of the case, merit and impugned assessment order as under: Upon careful perusal of impugned assessment order and information available or record it is seen that grant of TDS credit cannot be directed merely on the basis of a claim made in the return of income or statement of facts. The appellant has failed to discharge the statutory burden of proof by producing documentary evidence establishing that the disputed TDS amount was correctly deducted, deposited and reported. In absence of such verification and matching, issuing a direction to allow full TDS credit would be contrary to the provisions of section 199 and Rule 37BA.Accordingly, ground no.05 raised by the appellant being devoid of merit is dismissed herewith.”

Further Aggrieved, the assessee is in appeal before us.

ITA No.- 2152/Del/2026 Ajeet Singh declared by the assessee as the returned income has been accepted by the Revenue u/s 143(1) of the Act. CPC apparently invoked section 199 r.w.s. 37BA of the Act and applied the following formula:

TDS allowed = TDS claimed x income offered Gross receipts

4.1 We are of the considered view that since the Revenue has neither disputed the income declared by the assessee nor the TDS reflected in the Form 26AS, therefore, there is no reason to partly disallow the TDS claimed simply on proportionate basis. We, accordingly, direct the AO to allow the claim of TDS after verifying the same from Form 16/16A (filed by the assessee) that the TDS has indeed been deducted.

Order pronounced in the open court on 22.07.2026

Sd/- Sd/- [MADHUMITA ROY] [RENU JAUHRI] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 22.07.2026. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4

ITA No.- 2152/Del/2026 Ajeet Singh 4. CIT(A) 5. DR

Asst. Registrar, ITAT, New Delhi,