CHATURVEDI SK & FELLOWS LLP,MUMBAI vs. INCOME-TAX OFFICER 16(2)(1) MUMBAI, MUMBAI

Facts

The Assessee, a CA firm following cash basis accounting, claimed TDS credit of INR 3,30,000 against income of INR 33,00,000 offered for AY 2018-2019. The TDS was reflected in Form 26AS for AY 2016-2017. The credit was denied because the 2016-2017 return did not show a carry forward of the TDS, despite the income being offered on a receipt basis in AY 2018-2019.

Held

The Tribunal acknowledged that the Assessee offered the income on a cash basis in the relevant year and the TDS was reflected in 26AS. It restored the matter to the Assessing Officer with directions to verify if the claimed TDS corresponds to the income offered in AY 2018-2019 and if it has not been claimed in any preceding assessment years, and then to grant the credit.

Key Issues

Whether the Income Tax authorities were justified in denying TDS credit to the Assessee for AY 2018-2019, when the income was offered on a cash basis in that year, but the corresponding TDS was reflected in Form 26AS of an earlier assessment year.