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Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar
Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 26.11.2021 passed for assessment year 2018-19.
The assessee has taken seven grounds of appeal. However, its grievance revolves around a single issue, namely the action of the CPC in not allowing credit of TDS of Rs.1,01,659/- is against the law.
Brief facts of the case are that the assessee has filed its return of income electronically declaring total income of Rs.50,60,501/-. In this return, the assesese has claimed TDS Credit of Rs.2,20,722/-. This return
ITA No. 36/KOL/2022 Assessment Year: 2018-2019 Bildrite Construction Company was processed under section 143(1). The CPC Unit has allowed the TDS Credit of Rs.1,19,063/- as against Rs.2,20,722/- claimed by the assessee. In this way, a TDS Credit of Rs.1,01,659/- has been disallowed to the assessee. Dissatisfied with this action, the assessee filed a rectification application under section 154, which was rejected by the CPC.
The assessee took the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) concurred with the ld. Assessing Officer by recording the following finding:- “5. I have carefully considered the facts of the case, the order u/s 154 of the I T Act of CPC, grounds of appeal and statement of facts. During assessment, intimation u/s 143(1) dated 10.01.2020 was passed in the case of appellant disallowing full credit for TDS claimed in the return of income. During the course of appellate proceedings, the appellant in the statement of facts contended that “Return of income was filed by the appellant declaring total income of Rs 50,60,501/- and was duly processed by the CPC u/s 143(1). On-going through the order it will be found that full credit on account of TDS has not been given to the appellant and thus petition u/s 154 was filed on 05.02.2020 and the same was rejected by the CPC. The matter relates to the appellant working with South East Central Railways where there was an arbitration award in respect of dues available to the appellant from the railways and the appellant was found entitled to Rs 50,82,956/- relating to its contractual work done with the Railways. This amount was duly shown by the appellant as the part of its turnover for the A Y 2005-06 and tax on the same was accordingly paid. The Railways paid'the outstanding amount along with interest in the A Y under appeal i.e. 2018-19 and theJax deducted on the amount of contractual receipts as well as accrued interest worked out at RS.2,20,722J- was deducted by the Railways. However, the CPC though credit of TDS on the amount relating to interest which was paid bfirailways during the year, credit in respect of amount of TDS deducted on the contractual work Whidh has suffered tax during the A Y 2005-06 was not given. Thus the sole issue involved in this appeal relates only to the amount of credit of TDS which is available to the appellant as per the relevant income has already suffered tax in an earlier year. .
5.1 From the facts of the case it is noticed that the appellant had claimed TDS credit of Rs.2,20,722/- in the return of income, however, at the time of processing return u/s 143(1) as well as in rectification order passed u/s 154 of the I T Act, the appellant was allowed credit of TDS of Rs 1,19,363/- relating to interest which was paid by railways during the year but credit in respect of amount of TDS deducted on the contractual work which has suffered tax during the A Y 2005-06 was not given.
During the appellate proceedings, it is contended that the matter relates to the appellant working with South East Central Railways where there was an arbitration award in respect of dues available to the appellant from the railways and the appellant was found entitled to Rs 50,82,956/- relating to its contractual work done with the Railways and that Rs 50,82,956/- relating to contractual work done by the appellant with the Railways was shown by the 2
ITA No. 36/KOL/2022 Assessment Year: 2018-2019 Bildrite Construction Company appellant as part of turnover during A Y 2005-06 and tax on the same was accordingly paid. It is further contended that the Railways paid the outstanding amount along with interest in the A Y under appeal i.e. 2018-19 and the tax deducted on the amount of contractual receipts as well as accrued interest worked out at Rs 2,20,722/- was deducted by the Railways. 5.2. On perusal of the rectification order, it is noticed that the reason for rectification has been mentioned as “as seen from the e-filed return of income filed by you, there is a variance in the tax credits claimed and allowed. This variance is due to non-availability of TDS/TCS credits in your account/ 26AS or invalid TAN/incorrect entry of deducted year or amount/such TDS/TCS/Part BTT not filed". Thus it is seen that the appellant had offered contractual work with Railways as part of turnover for A Y 2005-06 and paid due taxes thereon. The said dues along with interest was paid by the Railways in the year under appeal and accordingly TDS was made on contractual receipts along with accrued interest in the year under consideration. Accordingly, the appellant claimed credit for TDS in the year under appeal. During the appellate proceedings, no documentary evidence to the effect that the amount of Rs 50,82,956/- was offered for tax in A Y 2005-06 and due taxes were paid thereon, have been furnished by the appellant. The appellant has also not furnished Form No. 26AS / TDS details for A Y 2005-06 and the year under appeal, as such the claim of the appellant cannot be verified. Mordbver, it is observed that the appellant had offered this amount to tax in A.Y 2005-06'and is claiming credit for TDS in the year under appeal, which is nearly after a period of 17 years. In light of the above discussion, the action of AO of disallowing credit for TDS on contractual receipts is upheld and this ground of appeal is dismissed. In the result, the appeal is dismissed”.
With the assistance of ld. Representatives, we have gone through the record carefully. The stand of the assessee is that it had worked for South East Central Railways, where certain disputes were sent for arbitration. The Arbitration Award has been received vide which the assessee was found to be entitled for Rs.50,82,956/- relating to its contractual work done with the Railways. This contractual work was done in A.Y. 2005-06 and it was part of the turnover. Tax on the same was accordingly paid. The TDS Credit was also related to that and on receipt of this amount after arbitration, it is offered as income. The assessee has claimed TDS Credit and contended that it should be either given in A.Y. 2005-06 or in this year when income is offered on the award. The Computer Processing Centre did not accept this claim of the assessee for want of complete information at its end. To our mind, once a legitimate claim was filed by the assessee and if the respondent-revenue is not able to process that claim for want of complete details at its end, then it 3
ITA No. 36/KOL/2022 Assessment Year: 2018-2019 Bildrite Construction Company cannot reject that claim summarily by making prima facie adjustment. It is a debatable one and should have not been adjusted in this manner. Therefore, we allow the claim of assessee and direct the Revenue to provide complete credit of the TDS claimed by the assessee in the return.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on September 23, 2022. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 23rd day of September, 2022
Copies to : (1) Bildrite Construction Company, 115E, Lenin Sarani, Moulali, Kolkata-700013
(2) Deputy Commissioner of Income Tax, Circle-33, Kolkata, Aayakar Bhawan Poorva, 110, Shanti pally, Kolkata-700107 (3) Commissioner of Income Tax (Appeals), NFAC, Delhi (4) Commissioner of Income Tax, Kolkata-1; (5) The Departmental Representative (6) Guard File