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Facts
The assessee filed an ITR for AY 2021-22, claiming higher TDS credit than granted by CPC under Section 143(1). A rectification petition under Section 154 was rejected, and the CIT(A) dismissed the subsequent appeal, holding that the appeal against a Section 154 order was a "back-door entry" for an issue arising from Section 143(1).
Held
The ITAT, to ensure natural justice, set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer. The AO is directed to re-examine the assessee's full TDS credit claim, considering all relevant documents, and pass a detailed speaking order after providing a fresh opportunity of hearing to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal against a Section 154 order on jurisdictional grounds, and whether the assessee was entitled to the full TDS credit as claimed, necessitating a re-examination by the Assessing Officer.
Sections Cited
143(1), 154, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2021-2022 Abhishek Kanoria,……………………...………Appellant 2, Mayurbhanj Road, Mominpur, Kolkata-700023, West Bengal [PAN:AFNPK5326F] -Vs.- Income Tax Officer,……………….…………...Respondent Ward-3(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Miraj D. Shah, A.R., appeared on behalf of the assessee Shri L.N. Dash, Addl. CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 23, 2025 Date of pronouncing the order: March 17, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 7th February, 2024 passed for Assessment Year 2021-22.
(A.Y. 2021-2022) Abhishek Kanoria 2. Brief facts of the case are that the assessee is an individual, who filed his return of income for assessment year 2021-22 declaring total income of Rs.35,47,500/- as income from salary and interest income of Rs.5,055/-. CPC processed the return under section 143(1) of the Act on 19.01.2022 by granting TDS credit of only Rs.7,75,595/-, whereas the appellant has claimed TDS credit of Rs.8,45,595/- during the impugned assessment year. Thereafter the assessee filed rectification petition on 03.01.2023 under section 154 of the Income Tax Act before CPC, but the same was rejected by CPC.
Aggrieved with the order of ld. Assessing Officer/CPC, the assessee preferred an appeal before the ld. CIT(Appeals).
After considering the submissions made by the assessee, the ld. CIT(Appeals) dismissed the appeal filed by the assessee saying that the original cause of action in the present case had arisen at the stage of the proceedings under section 143(1) and not under section 154. The appellant was trying to make a back-door entry by filing an appeal against the order under section 154. Therefore, the ld. CIT(Appeals) opined that this issue cannot be adjudicated upon in the present appeal, and dismissed the grounds raised by the assessee.
On being aggrieved, the assessee preferred an appeal before the ITAT and raised the following issues:- (1) For that the adjustment made in the order u/s 154/143(1) of the Income Tax Act, 1961 is beyond (A.Y. 2021-2022) Abhishek Kanoria the scope of law and hence the adjustment be held to be bad in law. (2) For that in the facts and circumstances of the case the Ld. CIT(Appeals) erred in rejecting the appeal and plea on the issue that the assessee has taken back door entry by filing appeal against order u/s 154 of the Income Tax Act, 1961 rather than the appeal should have been filed against order u/s 143(1) of the Income Tax Act, 1961. The finding of Ld. CIT(Appeals) is completely invalid and not tenable as per law. The appellate order passed on such basis be quashed. (3) For that in the facts and circumstances of the case the Ld. CIT(Appeals) erred in dismissing the order without considering the written submission filed by the assessee. The same is bad in law and thus the appellate order passed be set aside. (4) For that in the facts and circumstances of the case the assessing officer did not grant full credit for TDS and Ld. CIT(Appeals) upheld the action of assessing officer without diving into the merit of the case. Hence the assessing officer be directed to grant full credit of TDS as per law. (5) For that the adjustment made by the Centralized Processing Center in the intimation u/s 154/143(1) of the Income Tax Act 1961 is beyond the scope and the same is debatable and hence the said order be quashed and/or adjustment made be deleted. (6) For that the interest computed u/s 234 A/B/C of the Income Tax Act, 1961 is over charged and wrongly calculated and or is not applicable to the assessee case hence the interest be deleted and or correctly computed.
I have heard both the sides. It was the submission of the ld. Counsel for the assessee that TDS return has already filed but not considered by the CPC. He further submitted that the assessee has filed AS-25 before the Tribunal as well as paper book and pleaded to remit the matter back to the file of ld. Assessing Officer to (A.Y. 2021-2022) Abhishek Kanoria consider AS-25 in the assessment order and for granting full credit of TDS.
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate his claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have perused the relevant material available on record. It is not in dispute that the assessee has filed the TDS and ld. Assessing Officer granted the TDS credit amounting to Rs.7,75,595/-, whereas the appellant has claimed TDS credit for an amount of Rs.8,45,595/-. Therefore, I am of the view that it is a fit case to remit the matter back to the file of ld. Assessing Officer with a direction to examine the TDS credit filed by the assessee and pass a detailed speaking order. The assessee is also directed to file the relevant TDS documents before the ld. Assessing Officer. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. Assessing Officer with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I (A.Y. 2021-2022) Abhishek Kanoria also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Assessing Officer failing which the Ld. Assessing Officer shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17/03/2025.