K S RAO & CO ,HYDERABAD vs. INCOME TAX OFFICERS ,WARD -6(1), HYDERABAD

Brief facts of the case are that the assessee is a firm engaged in carrying on the profession of chartered accountants. For the assessment year 2019-20, the assessee filed its return of income on 30/10/2019 declaring an income of Rs. 1,10,67,800/-. Intimation under section 143 (1) of the Income Tax Act, 1961 (for short “the Act”) was passed on 16/03/2020 accepting the income declared, but gave credit of TDS of Rs. 32,81,767/- against the TDS credit of Rs. 36,93,506/- and determined the tax payable at Rs. 4,88,679/-.

Being aggrieved by the same, assessee preferred an appeal before the Ld. CIT(A). Ld. CIT(A) on verification of the material before him found that the assessee disclosed the professional income of Rs. 3,70,51,943/- on receipt/cash basis and claimed credit for corresponding TDS amount of Rs. 36,93,506/-, a part of which included the TDS amount pertaining to the professional income of earlier assessment years, but received during the financial year 2018-19 relevant to the assessment year 2019-20; and that while passing the intimation order, the learned Assessing Officer had denied TDS credit for an amount of Rs. 4,11,739/-, though the order itself suggests that the TDS was already deducted in the earlier years. Ld. CIT(A) further noticed that there are two instances of TDS claim by the assessee to the tune of Rs. 1,72,750/- and Rs. 4,214/- having been deducted by entities having TAN HYDN00160G and MUMI04922B respectively amounting to Rs. 80,951/- does not appear to exist in the tax deduction data base of the Income Tax department, and therefore, the learned Assessing Officer is right in disallowing the credit to the tune of Rs. 80,951/- on the ground of non-production of any proof.

Assessee is, therefore, before us in this appeal stating that the assessee had furnished the details of fee collections, TDS thereon and the assessment year in which such TDS was available in Form 26AS and when all the details relating to the claim of TDS were submitted by the assessee, it is not open for the Ld. CIT(A) to say that the two instances do not appear to be existing. It is the argument of the Ld. AR that in accordance with the provisions of section 199 of the Act read with rule 37BA(3)(i) of the Income Tax Rules 1962 (“the Rules”) credit for a TDS has to be given in the year in which income relating to such TDS is offered as income. Originally this appeal was disposed of by order dated 22/11/2021. However, at the request of the assessee that certain discrepancies have taken place in the order of the Tribunal in respect of the facts relating to the assessment year, by order dated 07/04/2022, the said order was recalled and the matter was posted for regular hearing. We heard the matter and now proceed to dispose it of in the light of the facts available on record.

It is submitted by the Ld. DR that the claim of TDS is not matching with the data available in the system of the Department and, therefore, the credit was allowed only to the extent of TDS amount which is verifiable and the balance was rightly disallowed by the authorities, and therefore, there are no grounds to interfere with the orders of the Ld. CIT(A) in this matter.

We have gone through the record in the light of the submissions made on either side. It has been the case of the assessee that the assessee firm engaged in the profession of chartered accountants and has been following cash basis of accounting since was setup about 30 years back, it has been accounting its income as and when received and claiming credit

He further submitted that even in earlier assessment years also, namely, for the assessment years 2012-13, 2013-14, 2015-16, 2016-17 and 2017-18 also there was a similar error that occurred and in the appeals preferred by the assessee, Ld. CIT(A) granted relief by directing the learned Assessing Officer to grant credit for the TDS as claimed by the assessee in accordance with Rule 37BA(3)(i) of the Rules read with section 199 of the Act.

Insofar as these facts pleaded by the assessee, absolutely there is no dispute. Even for this year also Ld. AR prayed that if the learned Assessing Officer is directed to verify the facts and to grant credit for the TDS under rule 37BA(3)(i) of the Rules and the assessee is prepared to submit all the evidences before the learned Assessing Officer.

Having regard to the fact that in the earlier assessment years also there was error committed by the CPC and was rectified by the Ld. CIT(A) by directing the learned Assessing Officer to verify the record and the evidences produced by the assessee and to grant credit for TDS in

In the result, appeal of the assessee is treated as allowed for statistical purpose.