VINAYAK SUDHIR DIWAN,PUNE vs. INCOME TAX OFFICER WARD 67(92), PUNE, PUNE

Ld.AR filed paper book, wherein it was submitted as under: “Grounds of Appeal - U/S 154. 1) Wrong filling of income tax return, without availing credit of TDS done - The appellant had not claimed the refund based on the TDS credit by mistake, however while processing the return u/s 143(1) the Assessing authority erred in not giving the due credit of the taxes deducted and reported against the PAN of the aseessee. As per Sec 143(1) of the income tax act Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax, interest and fee, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any 2 rebate allowable under Part A of Chapter VIII, any tax paid on self- assessment and any amount paid otherwise by way of tax, interest or fee As per Sec 143(1) above, the intimation shall be sent to the assessee after calculating the total income of the assessee by correcting the arithmetical errors incorrect claims, disallowing losses wrongly claimed, disallowing expenditure wrongly claimed, addition to income appearing in Form 26AS of the assessee, the tax shall be computed on the basis of such total income assessed and sum payable to the assessee shall be determined after adjustment of tax deducted at source, any advance tax paid. Here the assessing officer is supposed to compare the total income / Loss claimed by the assessee with the income appearing in Form 26AS, as well as the Tax deducted at source claimed by the assessee in return of income should be compared with the TDS appearing in Form 26AS. The appellant by mistake did not claim the refund of taxes deducted as per Form 26AS, however, the Assessing Authority also has erred in not taking cognizance of the TDS credit reflected in Form 26AS. Appellant thus requests your good self to direct the Assessing Authority to give due credit of TDS done for the assessment year in question and process the refund accordingly.

In this case the assessee filed return of income for AY 2023-24 u/s 139(1) of the Act. Inadvertently. assessee failed to claim credit for Tax Deducted at Source (TDS) in the Return of Income. The Return of Income was processed u/s 143(1) by the Centralized Processing Centre (CPC) of Income Tax on 19/02/2024 raising a Demand of Rs.1,47,490/-. Aggrieved by the Order u/s 143(1) the assessee filed an appeal before Commissioner of Income Tax (Appeal)[CIT(A)].

The ADDL/JCIT(A) held as under : “ 4.6 As per the provisions of section 143(1) of the Act, the Assessing Officer (through CPC) is empowered to make adjustments only on the basis of arithmetical errors, incorrect claims apparent from information in the return, or disallowances specifically provided under the said section. The grant of TDS credit is based on the claim made by the assessee in the return of income. If no such claim is made, there is no mandate under section 143(1) to suo motu allow such credit merely because it appears in Form 26AS.

7 The Hon'ble Courts have consistently held that Form 26AS is only a corroborative document and does not override the return of income filed by the assessee. Responsibility to correctly claim TDS credit lies squarely on the assessee at the time of filing the return. Further, the appellate proceedings are not meant to substitute or revise a return of income. The omission to claim TDS credit is not an error attributable to the Assessing Officer but is a mistake committed by the appellant himself. Such an omission cannot be cured through appellate proceedings under section 246A of the Act.

8 With regard to the appellant's contention of genuine hardship, it is noted that hardship by itself cannot override clear statutory provisions.

In view of the foregoing discussion, the grounds of appeal raised.”

Aggrieved by the Order u/s 250 of the Act, the Assessee has filed an appeal before this Tribunal.

We have heard both the parties. It is an admitted facts by both the Parties that Assessee had filed Return of Income u/s 139(1) of the Act and failed to claim TDS credit of Rs.2,18,140/- in the Return of income. Ld.CIT(A) has mentioned in the order u/s 250 of the Act that the TDS credit is reflected in the Form 26AS. Form 26AS is always available for verification to CPC, AO and CIT(A) online on the Income Logistics (India) Pvt. Ltd, in ITA No.4151/Del/2024 the ITAT, Delhi has dismissed Revenue‟s appeal and held that CIT(A) was right in directing AO to allow TDS credit which was reflecting in 26AS but not claimed by assessee.

Similarly, ITAT Mumbai in ITA No. 5338/Mum/2025 in the case of Daiwa Capital Markets India Private Limited vs ACIT, has allowed assessee‟s appeal on identical facts, where in ITAT observed as under :

Accordingly, we direct the AO to allow the assessee TDS credit appearing in 26AS for the year.

In the result appeal of the assessee is allowed.

The concerned Pr.CIT, Pune

DR, ITAT, „SMC‟ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, ////