TATA DIGITAL PRIVATE LIMITED,MUMBAI vs. DCIT 1(3)(1), MUMBAI

The assessee has raised the following grounds in this appeal. “General Ground:

1. On the facts and the circumstances of the case and in law, the order passed by the Hon’ble Learned Addl / JCIT (A)-2 (hereinafter referred as “Ld CIT(A)”) is bad in law and invalid.

AY 20224-25 Tata Digital Private Limited 2. Ground 2 – Denial of Tax Deducted at Source (‘TDS’) credit of Rs. 27,88,922/- 2.1 The Ld CIT(A) erred in denying the TDS credit of aforementioned amount without providing reasonable opportunity of being heard through virtual hearing to the Appellant, thereby violating the principles of natural justice and additionally not following the point 12(3) of the Notification no. 139 of 2021 dated 28 December,2021 laying down the requirement to provide an opportunity to the Appellant for virtual hearing. 2.2 On the facts and the circumstances of the case and in law, Ld CIT(A) grossly erred in denying the TDS credit of Rs. 27,88,922/- pertaining to M/s. AIX Connect Private Limited [Formerly known as M/s. AirAsia (India) Limited]. 2.3 In doing so, he failed to appreciate that: - Appellant has claimed TDS credit as per the provision of section 199 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) read with Rule 37BA of the Income Tax Rules, 1962 - Appellant has already offered to tax the corresponding income pertaining to M/s. AIX Connect Private Limited in its return of income for the year under consideration. - The said TDS of Rs. 27,88,922/- deducted by M/s. AIX Connect Private Limited has been deposited by them in the subsequent year and the same is reflected in Form 26AS for the said year. - Appellant has Claimed the TDS of Rs. 27,88,922/- in its return of income for the Assessment year 2024-25 and accordingly, credit of TDS on the said income needs to be given Assessment Year 2024-25 only i.e. year under consideration.

Ground 3- Interest u/s 244A of the Act Suitable direction may be given to AO to calculate interest u/s. 244A of the Act on TDS credit of Rs. 27,88,922/- (which was denied while processing the return u/s. 143(1) of the Act) from April 2024 to actual date of refund. The above grounds are without prejudice to each other. The Appellant craves leave to add and/or to alter, amend, rescind or modify the grounds of appeal

Brief facts of the case are that assessee filed its return declaring total loss of Rs. 11,48,78,53,452/- and claimed refund of Rs. 11,25,01,230/-. The return was processed u/s. 143(1) and the CPC issued an intimation dated 24.12.2024, AY 20224-25 Tata Digital Private Limited accepting the returned loss, but allowing refund of only Rs. 10,94,04,264/- by granting short TDS credit of Rs. 30,96,966/-. TDS claim disallowed pertains to M/s. AIX Connect Pvt Ltd. (Rs. 27,88,922/-) and M/s. MO Engage India Pvt Ltd. (Rs. 3,07,976/-). Aggrieved with the action of the CPC, the assessee preferred an appeal before Ld. CIT(A). It was contended by the assessee that it had already offered the corresponding income pertaining to M/s. AIX Connect Pvt Ltd in its return of income for AY 2024-25. The corresponding TDS of Rs. 27,88,922/- deducted by M/s. AIX Connect Pvt Ltd. has also been deposited by them in the subsequent year. With regard to the short credit of TDS of Rs. 3,07,976/- the assessee withdrew the ground of appeal as the said deductor had revised its TDS return against the credit note issued in the subsequent year. Ld. CIT(A) after referring to Rule 37BA held that the conditions prescribed therein for claiming TDS credit are not satisfied and hence, upheld the action of the CPC in denying the TDS credit. However, Ld. CIT(A) observed that w.e.f. 01.10.2023 in view of the provisions of Section 155(20) of the Act, the Assessee may consider filing of application for relief. Against the dismissal of the appeal the assessee has filed present appeal by the Ld. CIT(A) before the Tribunal.

We have heard the rival submissions and perused the applicable provisions. Undisputedly, the assessee is entitled to the credit of TDS of Rs. 27,88,922/- deducted by M/s. AIX Connect Pvt ltd. It is the assessee’s case that the corresponding income has already been offered for tax during the year under consideration and therefore, the said TDS deducted by M/s. AIX Connect AY 20224-25 Tata Digital Private Limited Pvt Ltd and deposited by them in the subsequent year should be considered in AY 2024-25 and accordingly, credit of TDS should be allowed in the year under consideration under these circumstances, we deem it appropriate to restore the matter to the Ld. jurisdictional Assessing Officer (JAO) for verification of assessee’s claim and allow credit for the impugned TDS in the relevant year in which income has been brought to tax. Needless to add the assessees should be given adequate opportunity to submit requisite details and evidences in support of its claim.

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