ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CHENNAI, CHENNAI vs. ACQUEON TECHNOLOGIES PRIVATE LIMITED, CHENNAI

The Ld.CIT(A) has erred in allowing the appeal of the assessee on the grounds which were not emanating from the order that was appealed against.

The Ld.CIT(A) has erred in allowing the fresh claim that has been made at the appellate stage without any basis.

The Ld.CIT(A) ought to have remitted the issue to the AO to verify the documentary evidences stated to have been verified by the Ld.CIT(A) and hence the Ld.CIT(A) has erred in not affording opportunity to the AO which is in violation of Rule 46A.

The Ld.CIT(A) has failed to verify and give a finding on whether the corresponding income was offered by the assessee and allow the TDS credit accordingly and has been blanketly allowed the appeal of the assessee by directing the AO to allow credit for taxes paid as per Form 26AS.

For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored.

The brief facts of the case are that the assessee is a private limited company engaged in the business of software development. For the impugned assessment year, the assessee filed its return of income on 28.09.2009 declaring a total loss of Rs.10,91,70,655/-. The case was selected for scrutiny assessment and completed by the AO u/s.143(3) of the Act on 22.03.2013 making various additions including claim for purchase of software licenses and delay remittance of employee’s contribution to PF. Aggrieved, assessee carried

Pursuant to the directions of this Tribunal, the AO passed an order dated 20.12.2020 without giving any relief on account of delayed remittances of employees’ contribution to PF stating that no details were furnished by the assessee. Aggrieved, assessee preferred appeal before the ld.CIT(A) who vide the impugned order dated 22.05.2024 confirmed the addition on account of delayed remittances of employees’ contribution to PF relying upon the judgment of the Hon’ble Supreme Court in Checkmate Services P. Ltd v. CIT. Further, the ld.CIT(A) observed that the credit for TDS as appearing in Form 26AS of the assessee was Rs.2,80,39,740/-, whereas AO has granted credit only for an amount of Rs.2,04,74,986/- resulting in short credit of Rs.75,64,754/-. The ld.CIT(A), thus directed the AO to grant credit for TDS of Rs.2,80,39,740/- as per Form 26AS of the assessee.

Against the relief given by the ld.CIT(A) relating to grant of short credit of TDS of Rs.75,64,754/-, Revenue has preferred the appeal before this Tribunal.

The ld.DR for the Revenue submitted that the ld.CIT(A) has erred in directing the AO to grant credit for shortfall of TDS of Rs.75,64,754/- though the same was not emanating from the impugned assessment order passed pursuant to the directions of this Tribunal. Further, there is a gross violation of Rule 46A of the Income tax Rules by the ld.CIT(A) in not calling for remand report from the AO while confirming the additional claim of TDS as eligible by the assessee and directing the AO to grant the credit of the same. Hence, the ld.DR prayed for remitting the issue back to the file of the AO to verify the credit for TDS and corresponding income by setting aside the order of the ld.CIT(A).

Per contra, the ld.AR for the assessee submitted that the ld.CIT(A) has granted the relief for TDS based on the Form 26AS which according to him is not a violation of Rule 46A, since the same is available in the portal of the Income Tax Department.

We have carefully considered the rival submissions, perused the orders of the lower authorities, and examined the material available on record, including the paper book submitted by the assessee. The sole issue arising for :-5-: ITA. No:1805/Chny/2024

We observe that in the original return of income, the assessee had claimed TDS credit of Rs.2,04,74,986/-, which was duly allowed by the AO while passing the order giving effect to the directions of this Tribunal. During the course of appellate proceedings before the ld.CIT(A), the assessee raised an additional claim for TDS credit based on the details available in Form 26AS, which was accepted by the ld.CIT(A), who accordingly directed the AO to allow credit for TDS as per Form 26AS. However, it remains unclear why the assessee had originally restricted its claim to Rs.2,04,74,986/-, when the total TDS reflected in Form 26AS is Rs.2,80,39,740/-, thereby leaving a differential amount of Rs.75,64,754/-.

In view of the above, we consider it appropriate to restore the matter to the file of the AO for the limited purpose of verifying the correctness of differential TDS amount of Rs.75,64,754/-. The assessee is directed to furnish before the AO a reconciliation statement clearly demonstrating the TDS claimed in the return of income and the amount of TDS reflected in Form 26AS. In the event the AO is satisfied that the explanations furnished along with the reconciliation by the assessee for such corresponding additional amount of TDS of Rs.75,64,754/- claimed by the assessee, shall be granted the same in accordance with law. Accordingly, the grounds raised by the Revenue are allowed for statistical purposes.

In the result, appeal of the Revenue is allowed for statistical purposes.

अपीलाथ)/Appellant 2. *+यथ)/Respondent 3.आयकर आयु5त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 3वभागीय *'त'न ध/DR 5. गाड फाईल/GF