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Facts
The Revenue appealed the CIT(A)'s order allowing the assessee credit for TDS certificates that were not reflected in Form 26AS on TRACES. The assessee claimed credit based on physical TDS certificates submitted for the first time before the CIT(A).
Held
The Tribunal found merit in the Revenue's contention that physical TDS certificates submitted for the first time require verification. The Tribunal modified the CIT(A)'s direction, ordering the AO to verify the TDS certificates before allowing credit.
Key Issues
Whether the CIT(A) was justified in allowing credit for physical TDS certificates not appearing in Form 26AS without prior verification by the AO.
Sections Cited
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Income Tax Appellate Tribunal, MUMBAI “H” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI SANDEEP SINGH KARHAIL
Assessment Year : 2010-11 Deputy Commissioner of Tata Communications Limited, Income Tax-1(3)(1), Videsh Sanchar Bhavan, Room No. 540, vs. Mahatma Gandhi Road, 5th Floor, Fort, Mumbai G.P.O. Aayakar Bhavan, Maharashtra-400001. M.K. Road, Churchgate, PAN : AAACV2808C Mumbai-400020. (Appellant) (Respondent) Assessee by : Shri Nitesh Joshi a/w. Shri K.A. Damania Revenue by : Shri Ajay Chandra, CIT-DR Date of Hearing : 02-06-2025 Date of Pronouncement : 12-06-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 22-08-2024, pertaining to Assessment Year (AY) 2010-21, wherein the Revenue has taken the following limited grounds of appeal, reads as under: “Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in allowing the appeal of the assessee on the ground of credit against physical TDS certificate to the extent of Rs.15,84,05,028/- which were not appearing in 26AS on the TRACES site without verification of the same by the AO as directed by the Hon'ble ITAT in previous years in the own case of the assessee?”
During the course of hearing, the Ld. CIT-DR taken us through the findings of the Ld. CIT(A), which are contained in paras 6.2 and 6.2.1, of the impugned order which read as under: “6.2 Decision: In this regard, the Appellant has submitted that in its revised return of income the assessee claimed an amount of Rs. 240,09,08,940/- based on the physical TDS certificates available with it at the time of filing the return, whereas the actual credit against the TDS certificates granted is Rs. 230,34,17,119/- in the above referred order. It is further stated that the 26AS balance on the TRACES site as on date is Rs 241,84,01,081/-. Subsequently, on comparing the party-wise breakup of the same with the TRACES, it was discovered that for an amount of Rs. 2,18.98,924/-, physical TDS certificates are available, however the same are not appearing in 26AS on the TRACES website. It has thus been contended that the assessee will be entitled to an overall credit of Rs. 2,44,03,00,005/- being total of balance as per TRACES site and the physical certificates available with the assessee which are not appearing on the TRACES site. In this connection, reliance has been placed on the decision of the Hon'ble Delhi High Court in the case of Court on Its Own Motion vs. CIT dated 14-3-2013 (Writ Petition (Civil) 2659/2012). The appellant has further relied upon the Order dated July 20, 2015 passed by the Hon'ble ITAT, Mumbai in the case of the appeal filed for the above captioned AY 2010-11, where in relation to ground for short TDS credit, the Tribunal accepted the argument that this issue is covered in favour of the assessee by the decision of the Mumbai Tribunal in the case of "Citicorp Finance (India) Limited. Vs. Addl. CIT (ITA No. 8532/Mum/2011). Accordingly, the Tribunal held that the income tax department is required to give credit for TDS once the valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by the assessee regarding deduction of tax at source and on the basis of indemnity bond to give the credit of tax deducted at source to the assessee. 6.2.1 Respectfully following the aforesaid decision of the Hon'ble ITAT in appellant's own case for the year under consideration itself, AO is directed to give the credit of TDS of Rs. 2,44,03,00,005/- to the appellant. Ground no. 2 is thus allowed.”
It was submitted that the Ld. CIT(A) has directed the AO to give credit of TDS of Rs. 2,18,98,924/- in terms of physical TDS certificates, which have been submitted for the first time before the Ld. CIT(A). It was submitted that the grievance of the Revenue is that the Ld. CIT(A) has erred in directing the AO to allow the credit against the physical TDS certificates, which were not appearing in Form-26AS on the TRACES website without verification of same by the AO. It was submitted that since these TDS certificates have been submitted for the first time before the Ld.CIT(A), the same needs to be verified before the credit thereof can be allowed to the assessee.
Per contra, the Ld. AR was heard, who has not objected to the matter being set aside to the file of the AO for limited purposes of verification of physical TDS certificates amounting to Rs 2,18,98,924/-.
After hearing both the parties and considering the material available on record, we find merit in the contention of ld CIT DR that where the physical TDS certificates have been submitted for the first time before the ld CIT(A), the same would require verification or a report could have been called by the ld CIT(A) before directing the AO to allow the credit thereof. We accordingly modify the directions of the Ld.CIT(A) to the extent of physical TDS certificates amounting to Rs. 2,18,98,924/-. The AO is hereby directed to carry out the necessary verification of these TDS certificates and on such verification, whether the same are found to be in order, allow the necessary credit to the assessee.