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Facts
The assessee claimed TDS credit of Rs. 9,15,724/- in its return of income, despite having TDS deducted to the tune of Rs. 11,63,996/-. The assessee sought rectification under Section 154 of the Income Tax Act, 1961, to claim the remaining credit, but the AO rejected the application.
Held
The Tribunal held that the assessee is entitled to the benefit of entire TDS deducted, but subject to verification of any mismatch and the reason for not claiming the full amount in the original return. The issue of whether the assessee provided sufficient evidence to the lower authorities was deemed not to go into at this stage.
Key Issues
Whether the assessee is entitled to the full TDS credit claimed, and whether the lower authorities correctly rejected the rectification application without proper verification.
Sections Cited
250, 154, 143(3), 265
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 27.12.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2005-06.
Though the Assessee has deducted TDS of Rs. 11,63,996/- however in the return of income it has claimed to the extent of Rs. 9,15,724/- and therefore on realizing its mistake and in order to rectify the same, preferred application u/s 154 of the Act before the Assessing Officer (in short “AO”) who vide order dated 04.12.2019 u/s 154 of the Act and by taking refuge of the appeal order passed by the Ld. CIT(A), in first round of litigation, rejected such application of the Assessee by holding “that entire credit of TDS of Rs. 915724/- as claimed by the Assessee in his return of income for A.Y. 2005-06, has been granted to the assessee. There is no mistake apparent from record, which can be rectified u/s 154 of the Act”.
The Assessee being aggrieved challenged the said order before the Ld. Commissioner, who vide impugned order dismissed the appeal of the Assessee, by holding as under:
“5.1 The assessee is in appeal against the order of the AO u/s 154. The assessee claimed TDS of Rs.9,15,724/- in computation of income in ITR. The assessee has explained that he has attached the TDS certificates of Rs.10,90,770/- along with return but with mistake he could not claim the complete amount. The assessee also states that during assessment proceedings, the assessee submitted further TDS certificates of Rs.73,226/- thereby claiming total TDs credit of Rs.11,63,996/-. During pendency of the appeal against the order u/s 143(3), rectification application was pending and due to that the issue of the credit of TDS certificates were not decided by the CIT(A). Later on, the rectification application has been rejected by the AO against which this appeal has been filed. 5.2 During appellate proceedings the appellant had submitted details of the parties and amount of TDS amounting to Rs.11,63,996/-. The assessee also furnished name of the parties along with TDS certificates of Rs.73,226/. The AO rejected application u/s 154 as what the assessee has claimed in the return, which has been granted to the assessee. The appellant in reply dated 4/2/2023 has stated that amount on which TDS deducted was Rs.6,92,30,595/- whereas total income offered on the said assessment order was Rs.7,31,56,692/- and which is reflected in schedule H. The appellant also relied on judicial pronouncement. 5.3 Ostensibly that TDS of Rs.11,63,996/- has been deducted out of which he has claimed only uptoRs.9.15,724/- in the return of income. The appellant has not demonstrated that which are certificates which are not attached to original return and for which TDS has not been claimed. It is a matter of reconciliation that the corresponding receipts are accounted for in the audited accounts of the assessee. From the case record, it cannot be said that receipts corresponding to balance of the TDS which assessee failed to claim in original ITR is actually reflected in the audited accounts. Therefore, the facts of the case required verification by the AO. Since TDS and corresponding receipts require verification showing that all the receipts in the year concerned are reflected in ITR. In other words, the issue becomes debatable/unascertainable, being not apparently visible from record. In the absence of supporting evidences, the issue will need verification and it is not an apparent mistake being in the ambit of section 154. The appellant could not submit party ledger of each parties whose TDS could not be claimed and the corresponding receipts of which are reflected in profit and loss account. In the absence of such evidence, adverse inference has to be drawn against the appellant, in terms of provision of sec. 114 of the Indian Evidence Act 1872. Therefore, the order of the AO u/s 154 rejecting the claim is upheld. 5.4 In absence of requisite documentary evidence the issue is not analyzed in legal matrix.
In the result the appeal is dismissed.”
The Assessee being aggrieved is in appeal before this Court. At the outset, the Ld. Counsel Ms. Priyanshi has claimed that the Assessee though had duly filed all the relevant documents before the Ld. AO as well as Ld. Commissioner; however, both the authorities dismissed the contentions raised by the assessee mainly on the reason that it is a debatable issue. And therefore the orders passed by Authorities below are liable be set aside, by allowing appeal of the Assessee.
On the contrary Ld. DR refuted the claim of the Assessee by submitting that the Assessee has failed to establish its case by not filing requisite documents and therefore in the absence of supporting document/evidence, the authorities below were constrained to decide this issue against the assessee Thus, the impugned order specifically, does not require any interference.
6. Heard the parties and perused the material on record. Admittedly TDS has been deducted to the tune of Rs. 11,63,996/- but the Assessee somehow inadvertently or otherwise, has claimed the benefit of TDS in part by not in total , however, it is a fact that the Assessee has duly filed its computation/details of the TDS deducted. At this stage, this Court is inclined not to go into the controversy “whether the Assessee had filed the relevant document before the authorities below or not”. May be the Assessee has committed a mistake but that cannot be taken as sword against the Assessee for levy of taxes, as it is the mandate of Article 265 of the Constitution of India “ that no tax shall be levied or collected except by authority of law”. Thus the Assessee is entitled to get benefit of entire TDS deducted, however subject to verification of mismatch in the TDS and/or reason for non-claiming the entire TDS deducted, in original return of income.
In the result, the appeal of the Assessee is allowed in the aforesaid terms.
Order pronounced in the open court on 11.06.2025.