RAVI KUMAR LAKSHMI KANTH,BENGALURU vs. INCOME TAX OFFICER, BENGALURU

The assessee is aggrieved by the appellate order because the first appellate authority held that the short grant of credit for tax deducted at source did not

Briefly stated, the assessee is a salaried employee who earned salary from three employers. The respective employers duly deducted tax at source and remitted it to the Government of India. The assessee’s case was reopened under section 147, and notice under section 148 of the Act was issued on the ground that salary income of ₹35,41,547 received from Fincare Small Finance Bank Limited, IDFC Bank Limited, and Disha Microfin Limited during Financial Year 2017-18 could not be verified because the assessee had not filed a return of income under section 139(1) of the Act.

In response to the notice under section 148, the assessee filed a return of income on 30 April 2022 declaring total income of ₹32,57,588. The assessee also responded to notices issued during assessment by furnishing submissions, the return of income, proof of self-assessment tax paid of ₹1,55,000, computation of total income, capital gains statement, and the ITR filed by him.

Based on these materials, the assessment order dated 28 March 2023 assessed the total income at ₹32,57,590, substantially the same as the returned income.

The assessee preferred an appeal before the first appellate authority, contending that although he had claimed TDS credit of ₹6,61,819 in the return filed in response to the reopening notice, the Assessing Officer allowed credit of only ₹5,72,780. Thus, TDS credit of ₹89,239 was not allowed by the jurisdictional Assessing Officer, giving rise to the assessee’s grievance.

During the appellate proceedings, the assessee submitted that TDS credit should be granted to that extent. The learned CIT(A) held that there was no difference between the returned income and the assessed income and, therefore, the short grant of TDS credit did not arise from the assessment

The assessee is again aggrieved by the order of the first appellate authority and has raised a solitary ground challenging the denial of TDS credit.

The learned authorized representative submitted that TDS credit is an integral part of assessment and that the learned CIT(A) erred in declining appellate jurisdiction on the issue of short grant of TDS credit. It was argued that the learned CIT(A) abdicated his statutory appellate duty by directing the assessee to seek rectification under section 154 of the Act instead of directing the Assessing Officer to grant the TDS credit. It was further submitted that, under section 199 and rule 37BA, once the corresponding income is assessed, the related TDS credit ought to be allowed. Denial of such credit, despite assessment of the corresponding income, results in impermissible double taxation and defeats the substantive statutory right conferred on the appellant.

The learned departmental representative strongly supported the order of the learned CIT(A). He submitted that the assessee ought to have filed an application for rectification under section 154 of the Act, which was not done. Therefore, according to him, the learned CIT(A) was justified in advising the assessee to follow the procedure prescribed by law, and there was no infirmity in the appellate order. He further submitted that the assessee’s failure to file an application under section 154 before the Assessing Officer was itself unexplained.

We have carefully considered the rival contentions and perused the orders of the learned lower authorities. The only issue in this appeal concerns the short

In the result, all grounds raised by the assessee are allowed, and the appeal is restored to the file of the learned Assessing Officer for adjudication in terms of the directions above.