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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI S. RIFAUR RAHMAN
Present for: Assessee by : Shri Vimal Punmiya, A.R. Revenue by : Mrs. Agnes P. Thomas, D.R. Date of Hearing : 28 . 11 . 2022 Date of Pronouncement : 23 . 12 . 2022 O R D E R
Per : Kuldip Singh, Judicial Member:
1. The appellant, M/s. Gundecha Construction Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 26.08.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2014-15 on the grounds inter-alia that :- 2 M/s. Gundecha Construction Pvt. Ltd.
“1. LD. CIT(A) erred in redirecting the issue of the non credit of TDS back to the assessing officer without appreciating the facts and the documents furnished clearly indicating that the assessee has declared the income in its returns was bound to be given the credit of corresponding TDS.
2 The Appellant craves leave to add, alter, amend or delete the above ground/s of appeal.”
Briefly stated facts necessary for adjudication of the issues at hand are: the assessee company filed its return of income declaring total income of Rs.5,28,43,470/- which was processed under section 143(1) ) of the Income Tax Act,1961 (for short ‘the Act’) vide order dated 22.07.2015 but credit of TDS of Rs.34,43,640/- was not given to the assessee as claimed by the assessee in its return of income.
Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has partly allowed the same.
Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the assessee has come up before the Tribunal by way of filing present appeal.
We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.
Undisputedly, the assessee by filing the return of income for the year under consideration has claimed TDS credit of Rs.34,43,640/- the credit of which was not given by the Assessing 3 M/s. Gundecha Construction Pvt. Ltd.
Officer (AO)/CPC by sending intimation under section 143(1) of the Act. It is also not in dispute that the interest was not reflected in form 26AS by the assessee as such the AO/CPC has not given the credit of the same.
We have perused the impugned order passed by the Ld. CIT(A) who has virtually allowed the prayer made by the assessee by directing the AO to allow the credit of TDS if admissible as per provision of income tax law but has not fixed the period in which the AO is to take the action, by returning following findings: “5.1 Ground No. 2 challenges the non granting of TDS credit of Rs.34,43,640. 5.1.1 In this regard, out of 'Statement of Facts' of the appellant (reproduced entirely in Para no. 4 supra), following points being relevant for adjudication of the impugned non granting of TDS of Rs.34,43,640 are profitably listed as under- 1.
That, the appellant had entered into Memorandum of understanding (MOU) on 15th May 2006 with Mr Rajtoj B Khot for development of property at Borivali in Joint Venture. As per a clause of MOU it was agreed that Rs 5 crore to be deposited towards earnest money in Escrow Account jointly with Mr. Mahendra K Ghelani and Mr Sharad D Chitnis being the solicitors of both the parties.. 2 That, accordingly they had deposited Rs 5 crores in Escrow account on 15th May 2006 and the said amount was kept in FDR with Bank of Baroda. The interest on this FDR was subject to TDS and accordingly the said Bank had time to time credited interest on the said FDR and necessary TDS had been deducted at the prevailing TDS rates.
3. That, the TDS certificates had been issued by the bank in the name of Mr. Mahendra K Ghelani being 1st name holder of FDR. The total interest paid by the bank was Rs 37,87,556 and total TDS deducted was Rs. 34,43,640. During the FY 2013-14 the said joint venture could not materialize hence the security deposit along with interest had been refunded to us on 27.11.2013 and 26th March 2014 4. That, as the interest belongs to appellant and was to be assessed in its hand as an income under Rule 37BA of Income 4 M/s. Gundecha Construction Pvt. Ltd.
Tax Sixth Amendment Rules 2009 vides Notification No.28/ 2009 dated 16th March 2015. The appellant had offered the interest income for tax in the year of receipt that was FY 2013- 14 and accordingly credit of TDS on the same was claimed. As the TDS certificates were issued in favour of Mr. Mahendra K. Ghelani, the credit on interest was not reflecting in its Form 26AS and hence the CPC had not given credit of the same. The Ld AO erred in not giving credit of TDS of Rs 34,43,640 when the corresponding income was shown by the appellant in the return of income. 5.1.3 All the facts and circumstances related to the impugned non grant of TDS credit of Rs. 34,43,640 are duly considered. Facts of the case are that the credit on interest was not reflecting in its Form 26AS and hence the A.O. CPC had not given credit of the same. The TDS credit was disallowed in Intimation u/s 143(1) of the Act. 5.1.4 Since this is a matter of verification, the Ld. AO is directed to do the same and allow further credit for TDS, if admissible, as per provisions of Income Tax Law related Rules while giving effect to this appeal order. Needless to add that the Ld. A/R and/or the appellant Company must co-operate the Ld. A.O. in the verification process so that correct income may be assessed and correct tax liability is determined, as we all have to remember one of the three cardinal principles i.e., tax should be calculated and the demand should be collected 'not a penny more not a penny less'. Thus, Ground no. 2, is partly allowed. 6.0 As a result, this appeal is, partly allowed, for statistical purposes.”
Bare perusal of the findings returned by the Ld. CIT(A) goes to prove that relief has already been granted to the assessee qua the disallowance of credit of TDS but no time frame was given by the Ld. CIT(A) for the AO to comply with the order. This impugned order was passed on 26.08.2022 but it is informed to the Bench that till now no such the appeal effect order has been passed by the AO.
In view of the matter, we hereby direct the AO to provide the credit of TDS as claimed by the assessee after making due verifications under rules and to pass the appeal effect order within a period of two months from the date of receipt of the copy of order. 5 M/s. Gundecha Construction Pvt. Ltd.
Consequently, the appeal filed by the assessee is hereby allowed.
Order pronounced in the open court on 23.12.2022.