M/S PKF SRIDHAR & SANTHANAM LLP,CHENNAI vs. DCIT , CHENNAI

The assessee has more or less raised common grounds of appeal for both the assessment years. Therefore, for the sake of brevity grounds of appeal filed for assessment year 2018-19 are reproduced as under: “1.The impugned order of the Commissioner of Income Tax (Appeals) is opposed to law and contrary to the facts and circumstances of the case. 2. Short Credit of TDS - Rs.78,31,008/-: 2.1 The Commissioner of Income Tax (Appeals), NFAC grossly erred in upholding the action of the Assessing Officer in not giving credit for TDS to the tune of Rs.78,31,008/-. 2.2. The Commissioner of Income Tax (Appeals), NFAC ought to have allowed TDS as claimed in the return of income since the income was offered for tax in the relevant year. 2.3. The Commissioner of Income Tax (Appeals), NFAC grossly erred in not considering the fact that this arises out of multiple factors like different TAN numbers for same customer based on locations, deductions in bills and consequent reduction in TDS, other clerical issues, customers paying in subsequent year and customers doing TDS after our filing IT returns. 2.4. The Commissioner of Income Tax (Appeals), NFAC ought to have called for reconciliation between TDS as per 26AS and TDS as per Return of Income. 2.5. The Commissioner of Income Tax (Appeals), NFAC ought to have provided sufficient and adequate opportunity to the Appellant to explain the case in detail. 2.6. The action of the Commissioner of Income Tax (Appeals), NFAC in not providing sufficient and adequate opportunity to the Appellant is against the principles of natural justice.”

We have heard both the parties and considered petition filed by the assessee for condonation of delay of 89 days in filing both the appeals and considering relevant facts, we find that there is sufficient and reasonable cause for not filing appeals in time. Therefore, we condone the delay in filing both appeals and admit appeals filed by the assessee for adjudication.

The brief facts of the case are that the assessee is a limited liability partnership firm engaged in the profession of consulting and auditing. The appellant filed its return of income for the assessment year 2018-19 on 29.09.2018 declaring a total income of Rs. 5,45,49,293/-. The assessee had also filed return of income for the assessment year 2019- 20 on 29.10.2019 admitting total income of Rs. 5,84,96,540/-. The return of income filed by the assessee for both assessment years have been processed u/s. 143(1)(a) of the

The Ld. Counsel for the assessee submitted that the Ld. CIT(A) has erred in not allowing credit for TDS as claimed by the assessee, even though the assessee has filed relevant details of unclaimed TDS brought forward from earlier years and claimed in the year on the basis of mercantile system of accounting. He further submitted that the AO has allowed TDS

The Ld. DR on the other hand supporting the orders of the ld. CIT(A) submitted that as per the amended Form ITR-5, it is for the assessee to carry forward unclaimed TDS to subsequent financial years and in case the assessee does not carry forward TDS, then the CPC will allow credit for TDS as per Form 26AS. Therefore, there is no error in the order passed by the CPC in denying credit for TDS pertains to earlier years. The ld. DR also submitted that if at all the assessee has furnished relevant details and also offered relevant income to tax for the impugned assessment years, then a direction may be given to the Assessing Officer to verify the claim of the assessee and allow TDS as per law.

We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The assessee has claimed credit for TDS amounting to Rs. 3,21,27,758/- for assessment year 2018-19 & Rs. 3,62,37,959/- for assessment year 2019-20, whereas ADIT, CPC has allowed TDS credit for Rs. 2,42,96,750/- for assessment year 2018-19 & Rs. 2,63,71,542/- for assessment year 2019-20. We find that the assessee has claimed credit for TDS pertains to earlier financial years, because income relating to said TDS has been offered to tax for the impugned assessment years on the basis of mercantile system of accounting. The assessee had also furnished necessary details of TDS brought forward from earlier financial years in Form ITR-5 filed for impugned assessment years. As per the provisions of section 199 & 200 of the Act, credit for TDS should be allowed when the assessee has offered income relating to said TDS. The assessee claims that income relating to said TDS has been offered to tax for the impugned assessment years. If, the claim of the assessee is correct then the credit for TDS should be allowed on the basis of claim of the assessee including TDS brought forward from earlier

In the result, the appeals filed by the assessee for assessment years 2018-19 & 2019-20 are allowed for statistical purposes.