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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI PRASHANT MAHARISHI & SHRI K.NARASIMHA CHARY
PER K. NARASIMHA CHARY, JM
This miscellaneous application is filed by the assessee seeking recall of the order dated 10/3/2021 in TDS credit needs to be adjudicated.
It is submitted by the Ld. AR that vide order dated 27/12/2016 learned Assessing Officer, observed that the TDS credit was claimed by the assessee with respect to the income, which were offered to tax in the assessment year 2013-14, and as per section 199 of the Income Tax Act, 1961 (for short “the Act”) such claim was permissible in the year in which the said income was offered to tax, but not in the subsequent years, and on this premise, learned Assessing Officer proceeded to add the amounts shown as TDS credit in form 26AS. Since the Ld. CIT(A), in the first appeal, did not disturb this finding and therefore the assessee preferred the appeal.
Ld. AR submitted that though the Tribunal by order dated 10/3/2021 observed that TDS credit in respect of income offered to tax in some other year, cannot be allowed to claim in this year, it missed the attention of the Tribunal to specifically delete the additions made. He submits that this is the mistake apparent on the face of record.
On a perusal of the material papers on record, and the grounds of appeal, we are satisfied that a mistake had crept in while adjudicating the appeal and it is apparent on the face of record, warranting the recall of the order dated 10.03.2021. We, accordingly and recall the order dated 10/3/2021 passed in , and proceed to dispose of the appeal.
5. It is submitted by the Ld. AR that whether or not the learned Assessing Officer allows the credit of TDS in this year relating to the income offered for tax in the earlier year, in any event, such TDS credit amount cannot be added to the income of the assessee for the simple reason that TDS credit represents the tax deducted at source in respect of the income in the earlier assessment year. Once tax is deducted and it is reflected in form 26AS, it cannot be accounted as income of the assessee since it is the deducted portion of the tax. He, therefore, prays to delete the addition of the TDS credit amount. Ld. DR places reliance on the orders of the authorities below.
6. It could be seen from the assessment order, learned Assessing Officer observed that TDS credit was claimed by the assessee even with respect to those incomes which had been offered to tax in financial year 2012-13; that since the income was already offered to tax in financial year 2012-13, the TDS credited is income received and as per section 199 of the Act, the claim of such TDS was permissible to the assessee in the year in which the said income, in respect of which the corresponding TDS aggregating to Rs. 14,56,771/-, was offered to tax; and that in the absence of the corresponding income being offered in the assessment year 2014-15, the aggregate excess TDS claimed of Rs. 14,56,771/-was proposed to be not permitted to the assessee. Then the assessing officer proceeded further and made the addition of all the TDS credit amounts as could be found from form 26AS, to the income of the assessee.
TDS credit represents the tax that had already been deducted in respect of the income, which was offered to tax in the earlier assessment year, in this case. When once this tax is deducted, adding it back to the income of the assessee for further taxation does not arise. Whether or not the learned Assessing Officer permits the TDS credit in this year is different from making an addition thereof again to the income of the assessee. It is not the income in its sense, but it is a tax deducted at source on the income offered to tax at some point of time. The addition made by the learned Assessing Officer is a misconceived one and cannot be sustained. With this view of the matter we allow the grounds of appeal.
In the result, miscellaneous application and the appeal of the assessee are allowed.