KAMLA,SIRSA vs. ADDL/JCIT (A)-5, CHENNAI

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ITA 3210/CHNY/2024Status: DisposedITAT Chennai11 August 2025AY 2022-234 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Addl. CIT(A)'s confirmation of the CPC's action in denying the full TDS credit under Section 154/143(1) was not agreed with. The Tribunal reasoned that since the TDS was deducted and paid from the assessee's receipts and reflected in its accounts, the assessee was eligible to claim the TDS credit. The Tribunal directed the Assessing Officer (AO) to verify the TDS claim and allow it in accordance with the law. The appeal was allowed for statistical purposes only. The Tribunal did not explicitly decide whether the assessee was a commission agent or a trade entity, nor did it comment on the applicability of Section 194I versus Section 194Q, which was observed by the Addl. CIT(A).

What were the facts?

The assessee, Kamla, filed an appeal for Assessment Year 2022-23 against an order of the Addl. CIT(A), Chennai. The order challenged was an intimation under Section 143(1) issued by the Centralized Processing Center (CPC), Bengaluru, dated 17.02.2023. The CPC had allowed credit for TDS of Rs. 9,654/- against the assessee's claim of Rs. 60,250/-. The assessee appealed to the Addl. CIT(A), who dismissed the appeal, opining that the assessee's transactions were trade-related, not as a commission agent, and that the CPC had correctly adjusted the TDS credit under Rule 37BA. The assessee contended that the CPC denied TDS credit without opportunity or reasons and that as a commission agent, it was eligible for the full TDS claim.

What were the issues?

1. Whether the Tribunal had to decide if the CPC's denial of full TDS credit under Section 143(1) was justified, considering the assessee's claim of being a commission agent eligible for the full credit. Assessee's Contention: The assessee argued that the CPC denied the claim for TDS credit without providing any opportunity or reasons. The assessee asserted its status as a commission agent, making it eligible for the full TDS claim as TDS was deducted from its receipts. Revenue's Contention: The Learned Departmental Representative relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 37BA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI JAGADISH

Hearing: 09.07.2025Pronounced: 11.08.2025

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2022-23 arises out of the order of Learned Commissioner of Income Tax, Appeal, Addl/JCIT(A)-5, Chennai [hereinafter “Addl. CIT(A)”] dated 17.10.2024 in the matter of intimation u/s. 143(1) issued by the Centralized Processing Center, Bengaluru (CPC) dated 17.02.2023.

2.

The CPC, in the intimation issued u/s. 154/143(1) of the Act, has allowed the credit of TDS credit of Rs. 9,654/- as against the claim of Rs.60,250/-. Aggrieved by the same, the assessee preferred an appeal before the Ld. Addl. CIT(A). However, the Ld. Addl. CIT(A)

1.

dismissed the appeal, observing that the transactions undertaken by the assessee during the year are in the nature of trade and not in the nature of a commission agent , therefore, CPC has correctly made the adjustment by invoking the provisions of Rule 37BA.

3.

The assessee in the ground of appeal has stated that the CPC has denied the claim of credit of TDS, in the order passed u/s.154 r.w.s 143(1) of the Act without providing any opportunity or giving reasons. The assessee has further stated that the assessee is a commission agent and eligible for the TDS claim, as the TDS has been deducted from its receipts.

4.

On the other hand, the Ld. Departmental Representative (DR) relied on the orders of the lower authorities.

5.

We have heard the case with the help of Ld. DR and perused the materials available on record. The assessee, in the return of income, has claimed TDS of Rs. 60,250/-, but CPC has allowed credit of only Rs. 9,654/-. The CPC has not given reasons for not granting full credit of TDS. The Ld. Addl. CIT(A) has confirmed the denial of credit, stating that the assessee is only a commission agent, and the ITR does not support that the trade debtors’ balance corresponds to the sales turnover. It was also observed that the TDS should have been deducted u/s. 194I and not u/s. 194Q. We do not agree with the Ld. Addl. CIT(A) in confirming the action of CPC in the order u/s. 154/143(1) of the Act denying the credit of TDS deducted from the assessee’s account. As the TDS has been deducted and paid from assessee’s receipt, and the same is reflected in its account, the assessee is eligible to claim the TDS credit. Accordingly, we direct the A.O to verify the claim of TDS and allow the same in accordance with law. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on 11th day of August, 2025 at Chennai.

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