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Facts
The assessee claimed TDS credit of Rs. 1,79,606 which was short allowed by the AO while processing the return under Section 143(1). The assessee's return included TDS credit of Rs. 19,93,700, but only Rs. 18,14,094 was allowed.
Held
The Tribunal found the assessee's plea for claiming TDS credit reasonable and remitted the issue to the Assessing Officer for verification. The AO was directed to allow credit for TDS deducted in the current year pertaining to revenue booked in earlier years if verified.
Key Issues
Dispute over short allowance of TDS credit and its allowability when revenue is recognized in an earlier year but TDS is deducted in the current year.
Sections Cited
143(1), 154, 244A, 139(1)
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI MAHAVIR SINGH & BEFORE SHRI MAHAVIR SINGH & BEFORE SHRI MAHAVIR SINGH & MAHAVIR SINGH & SHRI SHRI MANISH AGARWAL SHRI SHRI MANISH AGARWAL
PER MAHAVIR SINGH, VP PER MAHAVIR SINGH, VP PER MAHAVIR SINGH, VP PER MAHAVIR SINGH, VP This appeal by the assessee is arising out of the order of Additional/JCIT(A)-4, Delhi in appeal No.NFAC/2021-22/10261201 dated 12th November, 2025. The return of income was processed by the CPC, Bangalore under Section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) and against this, the assessee filed rectification application and rectification order was passed under Section 154 of the Act dated 19th May, 2023, the impugned order before learned CIT(A).
The short point for adjudication before us is for allowance of TDS credit of `1,79,606/-, which was short allowed by the Assessing Officer while processing return under Section 143(1) of the Act. Brief facts are that the assessee is engaged in the business of real estate and is a regular income tax assessee and filed its return for the relevant assessment year 2022-23 on 29th October, 2022 under Section 139(1) of the Act. The return of income was processed by the CPC, Bangalore on 8th March, 2023. The assessee claimed credit for TDS at `19,93,700/- in the income tax return filed as appearing in Form 26-AS. The CPC, Bangalore allowed refund of `19,22,930/-. The assessee, while going through the working of computation of income vide order under Section 143(1) of the Act, noticed that credit against TDS deducted was allowed to the extent of `18,14,094/- as against TDS deducted and deposited of `19,93,700/-. The CPC, Bangalore did not allow credit for TDS at `1,79,606/- i.e., the short credit by this amount. The assessee moved rectification application under Section 154 of the Act before the CPC, Bangalore, by virtue of which, the demand of `81,620/- was raised. Vide this order, the TDS credit of `19,93,700/- is not fully allowed and also the interest allowed under Section 244A of the Act of `1,08,840/- in intimation under Section 143(1) of the Act was reduced to `27,211/-. Due to this, a demand of `81,620/- was raised. Assessee filed another rectification application and order under Section 154 of the Act dated 19th May, 2023 was passed increasing demand of `99,770/- as against earlier demand of `81,620/-. Aggrieved, assessee preferred appeal before the learned CIT(A). Learned CIT(A) remitted the issue to the file of the Assessing Officer to verify the facts and rectification intimation order and recalculate the interest payable to the assessee. Aggrieved, assessee is in appeal before the Tribunal.
We have heard the arguments of learned Senior DR and gone through the facts and circumstances of the case. We noted that the assessee is engaged in real estate business and follows percentage of completion method for recognition of Revenue. It was also claimed that due to introduction of IND-AS 115 with effect from 1st April, 2018 relevant to assessment year 2019-20, revenue was recognized on offer of possession offered to customers. Due to specific nature of business and timing difference in revenue recognition in books and receipt of amount from customers in different periods, TDS is deducted by the customers at the time of making payment to the assessee irrespective of the fact when the invoice was raised by the assessee or when the revenue is recognized by the assessee. As per the assessee, the revenue is recognized in different periods and amounts are paid and TDS deducted in different periods by customers and therefore, there is bound to be difference in the receipts as per profit & loss account and return of income and as per Form 26-AS. There is no dispute about TDS deducted of `19,93,696/- but, TDS credit is allowed only to the extent of `18,14,094/-. The assessee company explained that it booked revenue in earlier years on the basis of offer of possession given to customers and customers deducted and deposited TDS during assessment year 2022-23. As the assessee cannot claim TDS in respect of revenue booked in earlier assessment years as time to file revised return is over, hence, TDS was claimed as and when TDS was deducted and deposited, that is the case in assessment year 2022-23. Assessee’s claim was that it offered higher income in earlier years and claimed credit for TDS as and when customers deducted TDS and deposited TDS. We find that the assessee’s plea is quite reasonable and as per law. But, the facts need to be verified whether any TDS deducted by these parties on whose account the assessee company booked revenue in the earlier years on the basis of offer of possession to the customers. This needs verification. Hence, we remit this issue to the file of the Assessing Officer just for the purpose of verification whether the assessee has offered revenue in the earlier years on the basis of offer of possession. In case revenue is booked in the earlier year but TDS deducted in this year, the Assessing Officer will allow credit for the same.
In the result, the appeal of the assessee is allowed for statistical purposes. Decision pronounced in the open Court on conclusion of hearing on 1st April, 2026.