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Facts
The assessee, M/s. Samhith Fintech Private Limited, inadvertently failed to claim TDS of Rs. 6,66,366.44 (which was reflected in Form 26AS) while filing its return for AY 2024-25. The CPC denied the credit during processing under Section 143(1), and the Ld. CIT(A) upheld this denial, citing Rule 37BA(4).
Held
The Tribunal found that the omission to claim TDS was a procedural lapse and the substantive right under Section 199 could not be denied on technical grounds. The matter was remanded to the Assessing Officer to verify if the corresponding income was offered for taxation and then grant the due TDS credit.
Key Issues
Whether TDS credit, although reflected in Form 26AS, can be denied if inadvertently not claimed in the original return, and the interpretation of Section 199 and Rule 37BA regarding such a procedural omission.
Sections Cited
143(1), 199, 250, 254, Rule 37BA(4)
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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Shri Ravish SoodShri Madhusudan Sawdia
(िनधा�रण वष�/Assessment Year: 2024-25) M/s Samhith Fintech Vs. Dy.CIT Private Limited, Circle 3 (1) Hyderabad Hyderabad PAN:ABLCS1930Q (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri Srinivas Bharath NK, CA राज� व �ारा/Revenue by:: Shri Waseem UR Rehman Sr. DR सुनवाई की तारीख/Date of hearing: 03/12/2025 घोषणा की तारीख/Pronouncement: 10/12/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.:
This appeal is filed by M/s. Samhith Fintech Private Limited (“the assessee”), feeling aggrieved by the order passed by the Learned ADDL/JCIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. First Appellate Authority”) dated 30.06.2025 for the A.Y.2024-25.
The assessee has raised the following grounds of appeal:
The brief facts of the case are that the assessee is a company and filed its return of income for the Assessment Year 2024–25 on 29.10.2024 declaring a total loss of Rs.38,61,336/-. During the year, total TDS of Rs.6,66,366.44 was deducted in the case of the assessee and such deduction was duly reflected in Form No.26AS. However, while filing the return of income, the assessee inadvertently did not claim credit of the said TDS. Consequently, the Centralized Processing Centre (“CPC”), while processing the return of the assessee under section 143(1) of the Income Tax Act, 1961 (“the Act”) vide intimation dated 29.10.2024, did not grant credit for the TDS.
Aggrieved with the intimation of CPC, the assessee preferred an appeal before the Ld. First Appellate Authority. The Ld. First Appellate Authority, however, dismissed the appeal on the ground that since the assessee did not claim the TDS credit in Page 3 of 6 the return of income, the same could not be granted in view of Rule 37BA(4) of the Income Tax Rules, 1962 (“the Rules”).
Aggrieved with the order of the Ld. First Appellate Authority, the assessee is in further appeal before this Tribunal. During the course of appellate proceedings, the Learned Authorised Representative (“Ld. AR”) submitted that the TDS of Rs.6,66,366.44 is duly reflected in Form No.26AS and was deducted in the name of the assessee. He submitted that the omission to claim the credit in the return was purely inadvertent and procedural and the assessee should not be deprived of the benefit of tax already deducted. He therefore prayed that the TDS credit may be directed to be allowed upon verification.
Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the order of the Ld. First Appellate Authority and submitted that since the assessee did not claim the TDS credit in the original return, the CPC was justified in denying the same. He argued that in terms of Rule 37BA of the Rules, it is necessary that the assessee makes a claim in the return and therefore the denial of credit is in accordance with law.
We have carefully considered the rival submissions and perused the material available on record. It is not in dispute that TDS is reflected in Form No.26AS in the name of the Page 4 of 6 assessee. In this regard, it is crucial to go through the provisions of Section 199 of the Act, which is to the following effect: “199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. (2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. (3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given.”
On a perusal of above, it is evident that Section 199 of the Act clearly provides that credit for tax deducted at source shall be given to the assessee from whose income such tax has been deducted. In our considered view, the omission to claim the credit in the return is purely procedural in nature, and the substantive right under section 199 of the Act cannot be denied merely on such technicality. However, before granting the credit, the Ld. AO must verify whether the income corresponding to the said TDS has been offered for taxation by the assessee. In the interest of justice, we therefore deem it appropriate to restore the matter to the file of the Ld. AO with a direction to verify the TDS reflected in Form No.26AS and grant due credit to the assessee after verifying
Page 5 of 6 whether the corresponding income has been offered for taxation in the return of income. The assessee shall be entitled to produce all relevant documents before the Ld. AO to facilitate such verification.