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Facts
The Revenue filed an appeal against the CIT(A)'s order which allowed the assessee's claim for TDS credit based on an updated Form 26-AS. The initial assessment involved a dispute over CSR expenses, and a subsequent computation restricted the TDS credit.
Held
The Tribunal noted that the Revenue's appeal was infructuous as the Department conceded the issue. The Tribunal affirmed the CIT(A)'s order, allowing the TDS credit as per Form 26-AS, and directed the AO to verify and grant the credit.
Key Issues
Whether the CIT(A) erred in allowing excess TDS credit claimed by the assessee after filing the return, in violation of Sections 239 and 155(14).
Sections Cited
143(3), 263, 154, 139, 239, 155(14)
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
This appeal is filed by the Revenue against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], dated 31.01.2023, for the Assessment Year (AY) 2017-18, wherein the CIT(A) allowed the claim of the assessee for TDS credit based on the updated Form 26-AS.
The solitary ground of appeal raised by the Revenue reads as under: “Whether, on the facts and circumstances of the case, Ld. CIT(A) has erred in allowing the excess T.D.S. credit claimed by assessee after filing its Return of income u/s.139 of Income tax Act, 1961, in violation of section 239 and section 155(14) of the Income tax Act, 1961.”
3. The brief facts of the case are that the assessee was initially assessed under section 143(3) of the Income Tax Act on 28/12/2019, determining an assessed income of Rs.9,15,21,29,220. Subsequently, the CIT (Exemption), Ahmedabad, invoked section 263 of the Act and set aside the order passed under section 143(3) of the Act on the ground that the AO had not properly examined certain issues, including the disallowance of CSR expenses. Pursuant to the revisionary order under section 263 of the Act, the AO passed a fresh assessment order under section 143(3) r.w.s. 263 of the Act , wherein the AO observed a clerical discrepancy in CSR expenses as per Form 3CD and the Profit & Loss account. The CSR expenses were initially recorded as Rs.26,00,000 in Form 3CD, but in the Profit & Loss account, they were debited as Rs.2,60,00,000, leading to an addition of Rs.2,34,00,000.
3.1. Further, the AO recomputed the income and made various additions. As a result, the total assessed income was determined at Rs.9,17,55,29,222/-. In the computation sheet annexed to the order, the AO restricted the TDS credit to Rs.1,40,00,64,531/-, as against Rs.1,42,83,11,367/- as per Form 26AS, resulting in a shortfall of Rs.2,82,46,836/-. The assessee filed rectification application before the AO but observed some discrepancies in allowing TDS credit in the computation sheet (dated 29/09/2023) attached to the order u/s. 154 of the Act passed by the AO.
Aggrieved by the order of AO, the assessee filed an appeal before the CIT(A). The CIT(A), after due consideration, allowed the increased TDS credit totaling to Rs.1,42,83,11,367/- relying on the updated Form 26AS. The CIT(A) directed the AO to verify the updated Form 26AS and grant credit accordingly.
During the course of the hearing before us, the Learned Departmental Representative (DR) conceded the issue. The DR submitted that the Department does not contest the correctness of the TDS credit as determined by the CIT(A). The DR submitted that the matter may be referred to the AO for verification and necessary compliance as per the CIT(A)’s directions.
The Authorized Representative (AR) of the assessee sated that the corresponding revenue from which the TDS was deducted is already offered for taxation. The AR also relied on the order of the Co-ordinate Bench in for AY 2019-20 (in assessee’s own case) dated 13/12/2024, wherein the Co-ordinate Bench has dismissed the appeal of the Revenue.
In light of the Department's concession and the facts on record as also considering the order of the Co-ordinate Bench(supra), we find no infirmity in the order of the CIT(A). The CIT(A) has correctly allowed the TDS credit as reflected in the updated Form 26-AS and directed the AO to verify and grant the credit. It is a settled principle of law that TDS credit appearing in Form 26-AS must be allowed when the revenue relating to such credit is already offered to tax, subject to verification.
Accordingly, we dismiss the Revenue's appeal as infructuous. The AO is directed to verify the updated Form 26-AS for the relevant assessment year and grant TDS credit Rs.1,42,83,11,367/- as determined by the CIT(A). The AO is also directed to verify that the corresponding revenue is included in the total income of the assessee.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the Open Court on 6th March, 2025 at Ahmedabad.