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Facts
The Revenue appealed against the CIT(A)'s order for Assessment Year 2010-11, concerning an assessee's claim for additional Tax Deducted at Source (TDS) credit of Rs. 2,28,36,127/-. The assessee sought this credit through a rectification application, which the Assessing Officer rejected on the ground that it was not made in the original return of income.
Held
The Income Tax Appellate Tribunal upheld the CIT(A)'s decision, stating that a procedural lapse should not deny legitimate TDS credit if the assessee is otherwise entitled, especially when the tax has already been deducted at source and deposited. The Tribunal directed the Assessing Officer to verify the claim and grant the credit in accordance with law.
Key Issues
Whether additional TDS credit can be claimed through rectification under Section 154, and if the CIT(A) was justified in directing the AO to verify and grant such credit despite the claim not being made in the original return.
Sections Cited
154, 119(2)(b), 155(14)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal has been preferred by the Revenue against order dated 02.08.2024 passed by the Ld. Commissioner of Income-tax- 56, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2010-11 in relation to rectification order passed by the Assessing Officer in terms of section 154 of the Income-tax Act, 1961 (in short ‘the Act’).
The grounds raised by the Revenue are reproduced as under: The grounds raised by the Revenue are reproduced as under: The grounds raised by the Revenue are reproduced as under:
Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred to directed the A.O to verify and law the Ld. CIT(A) erred to directed the A.O to verify and law the Ld. CIT(A) erred to directed the A.O to verify and grant the additional TDS credit of Rs. 2,28,36,127/ the additional TDS credit of Rs. 2,28,36,127/-.
2. Whether on the facts and circumstances of the case and in 2. Whether on the facts and circumstances of the case and in 2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred to consider the assessee's letter dated law the Ld.CIT(A) erred to consider the assessee's letter dated law the Ld.CIT(A) erred to consider the assessee's letter dated 30.03.2021 wherein the assessee had not filed revised return 30.03.2021 wherein the assessee had not filed revised return 30.03.2021 wherein the assessee had not filed revised return or application or application u/s 119(2)(b) of • the Act for claiming additional u/s 119(2)(b) of • the Act for claiming additional TDS of Rs. 2,28,36, 127/ TDS of Rs. 2,28,36, 127/-• 3. Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred not to consider the adjudication of the CIT(A) erred not to consider the adjudication of the CIT(A) erred not to consider the adjudication of the AO as to the provisions of section 155(14) of the Ac AO as to the provisions of section 155(14) of the Act are not t are not applicable to the assessee.
We have carefully considered the submissions advanced by We have carefully considered the submissions advanced by We have carefully considered the submissions advanced by both parties and have perused the relevant material on record. The both parties and have perused the relevant material on record. The both parties and have perused the relevant material on record. The primary issue for our consideration is whether the assessee's claim primary issue for our consideration is whether the assessee's claim primary issue for our consideration is whether the assessee's claim for additional credit o for additional credit of Tax Deducted at Source (TDS) amounting to f Tax Deducted at Source (TDS) amounting to Rs. 2,28,36,127/- could be entertained in the course of rectification could be entertained in the course of rectification could be entertained in the course of rectification proceedings. The assessee, through its rectification application, proceedings. The assessee, through its rectification application, proceedings. The assessee, through its rectification application, sought credit for the aforesaid TDS amount. However, the Assessing sought credit for the aforesaid TDS amount. However, the Assessing sought credit for the aforesaid TDS amount. However, the Assessing Officer rejected the claim on the ground that it had not been made ejected the claim on the ground that it had not been made ejected the claim on the ground that it had not been made in the original return of income filed by the assessee. The Assessing in the original return of income filed by the assessee. The Assessing in the original return of income filed by the assessee. The Assessing Officer was of the view that the appropriate course of action for the Officer was of the view that the appropriate course of action for the Officer was of the view that the appropriate course of action for the assessee was either to file a revised return within the prescribed assessee was either to file a revised return within the pr assessee was either to file a revised return within the pr time or to seek relief by way of an application under section time or to seek relief by way of an application under section time or to seek relief by way of an application under section 119(2)(b) of the Act. . Upon appeal, the learned CIT(A) CIT(A), after due consideration, directed the Assessing Officer to verify the claim and consideration, directed the Assessing Officer to verify the claim and consideration, directed the Assessing Officer to verify the claim and allow the TDS credit in accordance with the law. The relevant allow the TDS credit in accordance with the law allow the TDS credit in accordance with the law finding of the Ld. CIT(A) is reproduced as under: finding of the Ld. CIT(A) is reproduced as under:
23. Accordingly, the A.O. is directed to verify and grant the 23. Accordingly, the A.O. is directed to verify and grant the 23. Accordingly, the A.O. is directed to verify and grant the additional TDS credit of Rs.2,28,36.127/ additional TDS credit of Rs.2,28,36.127/- to the appellant as per to the appellant as per law. Ground Nos. 1 to 4 of the appeal is hereby treated as law. Ground Nos. 1 to 4 of the appeal is hereby treated as law. Ground Nos. 1 to 4 of the appeal is hereby treated as allowed for statistical purpose.
4. In our opinion, the finding of the Ld. CIT(A) on the issue in In our opinion, the finding of the Ld. CIT(A) on the issue in In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned as he has only directed to verify the claim dispute is well reasoned as he has only directed to verify the claim dispute is well reasoned as he has only directed to verify the claim and allow in accordance with law. The approach adopted by the and allow in accordance with law. The approach adopted by the and allow in accordance with law. The approach adopted by the learned CIT(A) is in conso learned CIT(A) is in consonance with the principles of natural nance with the principles of natural justice. The mere fact that the claim was not made in the original justice. The mere fact that the claim was not made in the original justice. The mere fact that the claim was not made in the original return cannot, by itself, be a ground to deny the legitimate credit of return cannot, by itself, be a ground to deny the legitimate credit of return cannot, by itself, be a ground to deny the legitimate credit of TDS if the assessee is otherwise entitled to the same. The object of TDS if the assessee is otherwise entitled to the same. The object of TDS if the assessee is otherwise entitled to the same. The object of tax administration is to ensure correct and fair assessment of ration is to ensure correct and fair assessment of ration is to ensure correct and fair assessment of income, and any procedural lapse should not result in an undue income, and any procedural lapse should not result in an undue income, and any procedural lapse should not result in an undue burden on the taxpayer. It is well established that where a tax has burden on the taxpayer. It is well established that where a tax has burden on the taxpayer. It is well established that where a tax has already been deducted at source and deposited with the already been deducted at source and deposited with the already been deducted at source and deposited with the government, the cor government, the corresponding credit must be granted to the responding credit must be granted to the assessee, subject to verification of facts. Accordingly, we find no assessee, subject to verification of facts. Accordingly, we find no assessee, subject to verification of facts. Accordingly, we find no infirmity in the order of the learned CIT(A) in directing the infirmity in the order of the learned CIT(A) in directing the infirmity in the order of the learned CIT(A) in directing the Assessing Officer to verify the claim and grant the credit as per law. Assessing Officer to verify the claim and grant the credit as per law. Assessing Officer to verify the claim and grant the credit as per law. We, therefore, uphold the said direction, emphasizing that the uphold the said direction, emphasizing that the uphold the said direction, emphasizing that the Assessing Officer shall ensure due verification before granting the Assessing Officer shall ensure due verification before granting the Assessing Officer shall ensure due verification before granting the credit of TDS to the assessee. We order accordingly. The grounds of credit of TDS to the assessee. We order accordingly. credit of TDS to the assessee. We order accordingly. appeal of the Revenue are accordingly dismissed. appeal of the Revenue are accordingly dismissed.
In the result, app In the result, appeal of the Revenue is dismissed. eal of the Revenue is dismissed.
Order pronounced in the open Court on nounced in the open Court on 19/02/2025. /02/2025.