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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
ORDER PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-47, Mumbai [hereinafter referred to as ‘the CIT(A)’] vide order dated 27.01.2021 for the Assessment Year (AY) 2016-17. The assessee has raised the following grounds of appeal:
1. The Ld CIT(A) has erred on the facts of the case and in law by not allowing credit of TDS deducted by the employer but not deposited to Government Account. Nil.
2. PRAYER 2.1 The Credit for TDS Rs. 1,55,610/- may kindly be allowed. 2.2 Personal hearing may be granted (A.Y. 2016-17) 2.3 Any other relief that your honours may deem fit may be granted.
2. Brief facts of the case are that the assessee filed its return of income on 10.03.2018 under section 139(4) of the Income Tax Act, 1961 (for short ‘the Act’) declaring income of Rs. 12,53,910/- against which his employer M/s ABG Shipyard Ltd., Surat deducted TDS amounting to Rs. 2,07,610/- total liability of tax of assessee was Rs. 2,07,208/- on declared income.
3. An intimation under section 143(1) was issued to the assessee dated 31.05.2018 under section 143(1) of the Act. With this intimation, CPC, Bangalore communicated that there is a mismatch in the amount of TDS as claimed by the assessee and reflected in Form No. 26AS. Hence, the total credit given to the assessee was only Rs. 52,000/- and balance Rs. 1,55,610/- was not allowed on the ground that his employer has failed to credit the TDS to the Government Account and failed to file relevant TDS return.
4. Against this intimation issued by CPC, Bangalore under section 143(1) of the Act, rejecting assessee’s claim of TDS, assessee filed an appeal with the office of ld. CIT(A)-47, Mumbai. 5. Against this appeal of assessee, the ld. CIT(A) held as under: “6. DECISION: The only issue involved in the present case is non credit of TDS of Rs.1,55,610/-. Both the grounds 1 and 2 deals with this issue and therefore, for the sake of convenience, these grounds are decided together. 7. As stated above, the assessee could not be given credit of TDS of Rs. 1,55,610/- by CPC because his employer has failed to credit the TDS to the Government account and failed to file relevant TDS returns. Consequently, this amount had not been reflected in the Form no.26AS and therefore, CPC was not in a position to give credit to the assessee, resulting - into demand in the hands of the assessee. While the assessee is not responsible for this situation, which has been entirely created by his employer. However, the credit of TDS to him could not be given on the basis of salary slips alone. In the circumstances, the assessee is advised to approach the TDS Authorities i.e. [ITO(TDS)/CIT(TDS), Surat] for appropriate action (A.Y. 2016-17) against ABG Shipyards Ltd., the erring company. The Assessing Officer is also advised to write to the ITO(TDS)/ CIT(TDS) for redressal of grievance of the assessee. Till such times this grievance is addressed, the Assessing Officer is advised not to press recovery of this demand, because from the details submitted by the assessee, TDS has apparently been done by the employer company. 7.1 In view of the above discussion, no relief could be granted to the assessee regarding allowing credit of the TDS amount at this stage. Both the assessee and the Assessing Officer are advised to take up necessary steps with the concerned ITO/CIT (TDS) for pressing upon the company to pay the TDS amount to the Government account and file TDS return for the same, by which this problem will get automatically solved. 7.2 As regards various case laws relied upon by the assessee, it may be mentioned that they relate to collection of the outstanding demand on account of non credit of TDS and do not address the issue of non credit of TDS. As has been held in the forgoing paras, the Assessing Officer is advised not to press for collection of outstanding demand on account of non credit of TDS till the matter gets solved by the TDS authorities. 7.3 For statistical purposes, the ground no.] and 2 taken by the assessee are rejected. 7.4. Ground no.3 is general in nature and does not require adjudication.
In view of the above facts, the appeal of the assessee is partly allowed.”
We have gone through the order of AO, submission of the assessee before the ld. CIT(A) and order of ld. CIT(A). We have considered the submissions of the assessee along with Paper Book filed. Moreover, the assessee’s matter is covered by his own case for AY 2017-18 vide on similar issue.
Respectfully following the decision of the Co-ordinate Bench in assessee’s own matter, we follow the findings of the Co-ordinate Bench held as under: “4. In view of the decision of the Hon’ble High Court (supra), we feel it appropriate to restore this issue back to the file of jurisdictional AO for verification from the books of account and other records of the employer i.e. M/s ABG Shipyards Ltd. about the fact the tax at source was deducted on the salary paid to the assessee and after verification, if it is found that tax has been deducted by the employer, then the Ld. AO shall allow credit of said amount of TDS which has been deducted from the salary of the assessee irrespective of the (A.Y. 2016-17) fact whether it has been deposited in Govt. account or not.. The appeal of the assessee is accordingly allowed for statistical purposes.”
8. It is further directed to the assessee to produce all the salary slips (reflecting deduction of tax), bank statement reflecting credit of salary from M/s ABG Shipyards Ltd.
The credit of the tax shall be given to the appellant and if in the interregnum any recovery or adjustment is made by the Revenue, the appellant shall be entitled to the refund of the same with the statutory interest.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 3rd day of June, 2022.