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Facts
The assessee sold a house property and claimed TDS credit of Rs. 48 lakhs. The CPC denied the credit, stating a mismatch with Form 26AS, which only showed a partial amount.
Held
The Tribunal held that TDS credit cannot be restricted to Form 26AS if actual evidence of deduction and deposit is provided. The AO was directed to verify the taxpayer receipt and allow the credit if found in order.
Key Issues
Whether TDS credit can be denied solely based on a mismatch with Form 26AS when actual proof of deduction and deposit is available.
Sections Cited
143(1), 37BA(3)(i)
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Income Tax Appellate Tribunal, MUMBAI “G” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI SANDEEP GOSAIN
Assessment Year : 2023-24 Sonali Dhawan, ITO, International Tax, Plot No. 495, PG Plaza, Ward-2(1)(1), Cardinal Gracias Road, vs. Mumbai. Chakala, Andheri (East) Mumbai. PAN : AQFPD5541A (Appellant) (Respondent) Assessee by : Shri Kanchun Kaushal (Virtually present) Revenue by : Shri Swapnil Choudhary Date of Hearing : 31-07-2025 Date of Pronouncement : 05-08-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Addl/JCIT(A)-Kochi [„Ld.CIT(A)‟], dated 17-03-2025, pertaining to Assessment Year (AY) 2023-24.
During the course of hearing, the Ld.AR submitted that during the financial year relevant to the impugned assessment year, the assessee has sold a house property for a consideration of Rs. 2,76,20,500/- to M/s. Jyestha Buildcon Private Limited and on the said consideration, the payer company has deducted TDS amounting to Rs. 48 lakhs. It was submitted that the said fact is evident from the sale deed itself wherein there is a clear mention of TDS been deducted and deposited through net banking on 17-06-2022. It was also submitted that the buyer also provided the assessee, a copy of the tax payer receipt wherein the TDS of Rs. 48 lakhs has been stated to be deposited on 17-06-2022. It was submitted that the assessee thereafter filed her return of income, disclosing the capital gains on sale of the said property and has claimed credit of TDS amounting to Rs. 48 lakhs. It was submitted that the return of income was processed by the CPC and in the intimation issued u/s. 143(1) of the Act, the returned income of Rs. 2,58,90,550/- has been accepted by the CPC and as such there is no dispute that the assessee has offered capital gains on sale of property. However, while granting TDS credit, the assessee has not been granted the TDS credit of Rs. 47,99,525/-, out of Rs. 48 lakhs claimed by the assessee in her return of income. As to the reasons for denial of TDS credit, the Ld.AR submitted that the CPC has stated that there is a mismatch with Form 26AS and Form-26AS contains only partial amount of TDS and, therefore, the assessee has been denied the credit of TDS so claimed in the return of income.
It was submitted by the Ld.AR that firstly, the TDS has not just been deducted, but the same has been duly deposited by the buyer of the property and which is evidenced by the sale deed as well as the taxpayer receipt which has been placed on record and it is, therefore, not a case where the TDS deducted has not been deposited. It was further submitted that as per the provisions of section 143(1)(c) of the Act, so long as the TDS is deducted even if not paid by the deductor, Coordinate Benches have gone ahead and have held that credit for TDS cannot be denied to the assessee and in support, reliance was placed on the decision of the Co- ordinate Bench of the Tribunal in the case of Mukesh Padamchand Sogani vs. ACIT, (AY. 2019-20), dt. 30-01-2023. It was submitted that the assessee‟s case is clearly on a better footing as TDS has been deducted as well as duly deposited and necessary evidence has been placed on record. It was further submitted that the mere fact that the amount of TDS has not been reflected in Form-26AS for reasons unknown to the assessee and beyond the control of the assessee cannot be a basis for denial of the TDS which has been duly deducted and deposited by the buyer of the property. It was accordingly submitted that the directions of the Addl/JCIT(A) where he has directed the AO to grant TDS credit as per relevant Form-26AS deserves to be set aside and necessary directions may be issued to the AO to grant the necessary TDS credit as so claimed by the assessee.
Per contra, the Ld.DR is heard, who has relied on the order passed by the Addl/JCIT(A) and the relevant findings contained read as under: “4.7 The submissions made in Form 35 by the appellant on this ground are considered and the grounds are decided as under: 4.7.1 In terms of Rule 37BA(3)(i), the benefit of TDS is to be given for the Assessment Year for which corresponding income is assessable, thereof, where the assessee received income assessable in Financial Year 2022-23 (AY: 2023-24), the benefit of TDS has to be allowed in the Assessment Year 2023-24. 4.7.2 Since in terms of Rule 37BA(3)(i), credit for tax deducted at source and paid to the Central Govt. shall be given for the Assessment Year for which such income is assessable, the AO is directed to duly verify the submissions made by the appellant on this Ground, provide an opportunity of being heard to the appellant and grant the further TDS claim available to the appellant as per law, taking into account the credit for TDS already granted in the relevant years after verifying 1. whether the corresponding Income pertaining to the TDS of Rs.47,99,525/- is assessable in A.Y 2023-24 and has been offered for taxation. 2. And if so, grant the further TDS claim as per relevant Form 26AS to the appellant as per law after due verification and taking into account the credit for TDS already granted in the relevant years.”
We have heard the rival contentions and perused the material available on record. The limited grievance of the assessee as so canvassed by the Ld.AR is that grant of TDS credit cannot be restricted to TDS as so reflected in Form 26AS rather the same should be based on actual evidence produced in support of TDS deducted and deposited. We find that there could be varied technological or other reasons where the relevant data pertaining to the assessee doesn‟t get reflected in Form 26AS at the relevant point in time. The CPC may have the limitation to look beyond what has been claimed by the assessee and reflected in IT system more particularly in Form 26AS. At the same time, where the assessee felt aggrieved brings the relevant evidence on record as in the instant case, the assessee cannot be denied her lawful right in terms of credit of TDS where the same has been duly deducted and deposited subject of course to necessary verification. In the instant case, we have been informed that for TDS on sale of property, the prescribed form is the tax payer receipt which contains the requisite particulars of tax deposited unlike Form 16/16A issued in other cases. In light of the same, in the instant case, we direct the AO to verify the taxpayer receipt issued by Canara Bank dated 17-06-2022 for an amount of Rs 48 lakhs as available in assessee‟s paper book page 119 and where the same is found to be in order, allow the necessary credit of TDS amounting to Rs 48 lakhs so claimed by the assessee in her return of income.