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Facts
The assessee, a charitable trust, filed its return declaring Nil income. The AO added ₹ 9,68,569/- based on Form 26AS entries, which the assessee claimed did not pertain to it due to erroneous PAN quoting. The CIT(A) upheld the addition.
Held
The Tribunal noted that the addition was made solely based on Form 26AS entries without independent verification. Since the assessee expressed willingness to provide confirmations from deductors and Section 133(6) empowers the AO to verify, the matter was remitted back.
Key Issues
Whether addition can be made solely on the basis of Form 26AS entries without independent verification, especially when the assessee claims the income does not belong to it and offers to provide confirmations?
Sections Cited
12A, 80G, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 28.03.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 1, Gurugram [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds:
1. Whether, on facts and circumstances of the case and in law, the Ld. CIT (A) was right in allowing the Addition in respect of difference in Income on the basis of Annual respect of difference in Income on the basis of Annual respect of difference in Income on the basis of Annual Information Report or entries contained in Form 26AS of Rs. Information Report or entries contained in Form 26AS of Rs. Information Report or entries contained in Form 26AS of Rs. 9,68,569/- while while computing computing the the taxable taxable income income for for the A. Y.2016 Y.2016-17? 2. Briefly stated, the facts of the case are that the assessee is a Briefly stated, the facts of the case are that the assessee is a Briefly stated, the facts of the case are that the assessee is a public charitable trust established on 02.11.1970, duly registered public charitable trust established on 02.11.1970, duly registered public charitable trust established on 02.11.1970, duly registered with the Office of the Charity Commissioner, Mumbai. The assessee with the Office of the Charity Commissioner, Mumbai. The assessee with the Office of the Charity Commissioner, Mumbai. The assessee is also registered under sections 12A and 80G of the Income-tax is also registered under sections 12A and 80G of t is also registered under sections 12A and 80G of t Act, 1961 (hereinafter referred to as Act, 1961 (hereinafter referred to as “the Act”). The trust is engaged ). The trust is engaged in running various schools and colleges and is carrying out in running various schools and colleges and is carrying out in running various schools and colleges and is carrying out charitable activities for the promotion of education and social charitable activities for the promotion of education and social charitable activities for the promotion of education and social advancement of women and children. For the year under advancement of women and children. For the year advancement of women and children. For the year consideration, the assessee filed its return of income on 11.10.2016 consideration, the assessee filed its return of income on 11.10.2016 consideration, the assessee filed its return of income on 11.10.2016 declaring total income at declaring total income at Nil.
2.1 The return was selected for scrutiny and statutory notices The return was selected for scrutiny and statutory notices The return was selected for scrutiny and statutory notices under the Act were issued and duly complied with. During the under the Act were issued and duly complied with. During the under the Act were issued and duly complied with. During the course of the assessment course of the assessment proceedings, the Assessing Officer proceedings, the Assessing Officer observed that certain items of income observed that certain items of income including contract work, including contract work, interest etc, on which tax had been deducted at source in the , on which tax had been deducted at source in the , on which tax had been deducted at source in the Permanent Account Number (PAN) of the assessee and accordingly Permanent Account Number (PAN) of the assessee and accordingly Permanent Account Number (PAN) of the assessee and accordingly reflected in Form No. 26AS prescr reflected in Form No. 26AS prescribed under the Income ibed under the Income-tax Rules, 1962, were not shown in the income and expenditure account of the 1962, were not shown in the income and expenditure account of the 1962, were not shown in the income and expenditure account of the assessee.
2.2 When confronted, the assessee explained that the said income When confronted, the assessee explained that the said income When confronted, the assessee explained that the said income did not pertain to it and had erroneously appeared in its Form No. did not pertain to it and had erroneously appeared in its Form No. did not pertain to it and had erroneously appeared in its Form No. nadvertent quoting of its PAN by the deductors 26AS owing to inadvertent quoting of its PAN by the deductors nadvertent quoting of its PAN by the deductors concerned. The assessee requested that the Assessing Officer may concerned. The assessee requested that the Assessing Officer may concerned. The assessee requested that the Assessing Officer may verify the matter by issuing notice under section 133(6) of the Act to verify the matter by issuing notice under section 133(6) of the Act to verify the matter by issuing notice under section 133(6) of the Act to the respective deductors, since the assessee could not procure the respective deductors, since the assessee could not procure the respective deductors, since the assessee could not procure confirmations directly. Reliance was also placed on the decision of ons directly. Reliance was also placed on the decision of ons directly. Reliance was also placed on the decision of CIT v. Deloitte Touche Tohmatsu (ITA No. the Co-ordinate Bench in ordinate Bench in CIT v. Deloitte Touche Tohmatsu 276/Mum/2016), wherein it was held that additions cannot be 276/Mum/2016), wherein it was held that additions cannot be 276/Mum/2016), wherein it was held that additions cannot be made merely on the basis of entries in the Annual Information made merely on the basis of entries in the Annual Information made merely on the basis of entries in the Annual Information Return (AIR).
2.3. The Assessing Officer, however, was not satisfied with the . The Assessing Officer, however, was not satisfied with the . The Assessing Officer, however, was not satisfied with the explanation. In the absence of confirmation fr explanation. In the absence of confirmation from the deductors, he om the deductors, he held that since the TDS credit stood in the name of the assessee, held that since the TDS credit stood in the name of the assessee, held that since the TDS credit stood in the name of the assessee, the corresponding income also pertained to it. Accordingly, he the corresponding income also pertained to it. Accordingly, he the corresponding income also pertained to it. Accordingly, he added a sum of ₹ 9,68,569/ 9,68,569/- to the total income of the assessee. On to the total income of the assessee. On further appeal, the Ld. CIT(A) confirm further appeal, the Ld. CIT(A) confirmed the addition. ed the addition.
We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and perused the material available on record. The controversy centers perused the material available on record. The controversy perused the material available on record. The controversy around the addition of ₹ 9,68,569/-, being income reflected in Form around the addition of , being income reflected in Form No. 26AS of the assessee. It is a settled propo No. 26AS of the assessee. It is a settled proposition that where TDS sition that where TDS has been deducted and credited in the account of a particular has been deducted and credited in the account of a particular has been deducted and credited in the account of a particular assessee, prima facie, the corresponding income is assessable in its assessee, prima facie, the corresponding income is assessable in its assessee, prima facie, the corresponding income is assessable in its hands. However, the assessee has contended that the income does hands. However, the assessee has contended that the income does hands. However, the assessee has contended that the income does not pertain to it and has been wrongly not pertain to it and has been wrongly reflected due to erroneous reflected due to erroneous mention of its PAN by the deductors. The assessee has also asserted mention of its PAN by the deductors. The assessee has also asserted mention of its PAN by the deductors. The assessee has also asserted that no credit of TDS corresponding to the impugned income has that no credit of TDS corresponding to the impugned income has that no credit of TDS corresponding to the impugned income has been claimed in its return. been claimed in its return.
3.1 Before us, the learned counsel for the assessee submitted that Before us, the learned counsel for the assessee submitted that Before us, the learned counsel for the assessee submitted that the assessee is now in a position to obtain necessary confirmation assessee is now in a position to obtain necessary confirmation assessee is now in a position to obtain necessary confirmation from the deductors to establish that the impugned income actually from the deductors to establish that the impugned income actually from the deductors to establish that the impugned income actually pertains to other entities. It was further submitted that the said pertains to other entities. It was further submitted that the said pertains to other entities. It was further submitted that the said income has been duly offered to tax in the hands of those entities. income has been duly offered to tax in the hands of those e income has been duly offered to tax in the hands of those e 3.2 In our considered view, the issue is essentially one of factual In our considered view, the issue is essentially one of factual In our considered view, the issue is essentially one of factual verification. The authorities below have made the addition merely verification. The authorities below have made the addition merely verification. The authorities below have made the addition merely on the basis of entries in Form No. 26AS without independently on the basis of entries in Form No. 26AS without independently on the basis of entries in Form No. 26AS without independently ascertaining whether the income indeed pertained to the assessee. ascertaining whether the income indeed pertained to th ascertaining whether the income indeed pertained to th Since Since Since the the the assessee assessee assessee has has has expressed expressed expressed willingness willingness willingness to to to furnish furnish furnish confirmation from the deductors, and the statute itself empowers confirmation from the deductors, and the statute itself empowers confirmation from the deductors, and the statute itself empowers the Assessing Officer to cause verification under section 133(6) of the Assessing Officer to cause verification under section 133(6) of the Assessing Officer to cause verification under section 133(6) of the Act, we deem it just and proper to remit the matter back to the the Act, we deem it just and proper to remit the matter the Act, we deem it just and proper to remit the matter file of the Assessing Officer. file of the Assessing Officer.
3.3 The Assessing Officer shall verify, on the basis of confirmation The Assessing Officer shall verify, on the basis of confirmation The Assessing Officer shall verify, on the basis of confirmation from deductors or through independent enquiry, whether the from deductors or through independent enquiry, whether the from deductors or through independent enquiry, whether the income of ₹ 9,68,569/ 9,68,569/- in question pertains to the assessee or to in question pertains to the assessee or to other entities, and whether such income has already been declared d whether such income has already been declared d whether such income has already been declared by the rightful recipient. Subject to such verification, the Assessing by the rightful recipient. Subject to such verification, the Assessing by the rightful recipient. Subject to such verification, the Assessing Officer shall decide the issue afresh in accordance with law after Officer shall decide the issue afresh in accordance with law after Officer shall decide the issue afresh in accordance with law after affording reasonable opportunity of hearing to the assessee. affording reasonable opportunity of hearing to the assessee. affording reasonable opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for result, the appeal of the assessee is allowed for result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 09 nounced in the open Court on 09/09/2025. /09/2025.