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Facts
The assessee, a Canadian non-resident, sold a property for Rs. 4,65,00,000/- and had TDS deducted at source. The assessee filed an ITR claiming a refund, but the CPC raised a demand by reducing the TDS credit based on a presumption under Rule 37B A(2)(i). The assessee's appeal before the CIT(A) was dismissed.
Held
The Tribunal found that the CIT(A)'s decision was vague and lacked coherence with the facts. The Tribunal held that the disallowance by CPC and confirmation by CIT(A) were unnecessary.
Key Issues
Whether the TDS credit reduction was justified, and if the CIT(A) properly adjudicated the issue after considering all facts and explanations.
Sections Cited
143(1), 37B, 195, 197
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 09.01.2025 passed for assessment year 2023-24.
Though the assessee has taken five grounds of appeal
but his grievance revolves around a single issue, namely, Revenue A.Y.2023-24
2. Authorities have erred in not allowing the refund of Rs.37,88,470/-.
The brief facts as reproduced in the order of ld. CIT (Appeals) read as under :
Statement of Facts PAN : CHEPS4310N Amardeep Sandhu A. Y 2023-24
Para 1. That the assessee is a Canadian non-resident and for the year under consideration he had sold property i.e House No 1602, Sector 36 D, Chandigarh for a consideration of Rs. 4,65,00,000/- on which Rs. 1,20,90,000/- tax was deducted at source @26%. Para 2. Accordingly Income Tax Return was filed vide Acknowledgment no 559929440191223 dated 19-12-2023 declaring net taxable income inclusive of Long Term capital gain at Rs. 3,71,29,847/- and sought of refund of Rs. 37,88,470/- Para 3. However, the assessee received intimation U/s 143(1) dated 19-01-2024 vide DIN: CPC/2324/A2/414010942 raising a demand of Rs. 29,94,960/-vide Demand Ref. No. 202320233724503863T. The demand has been raised by reducing the credit of TDS of Rs. 1,26,20,185/- to Rs. 63,26,743/- on presumption, by invoking Rule 37B A(2)(i) as through part of income is assessable the hands of some other person. No such clue emanates either from the income tax return fled by the assessee, or in F. No 26AS (Annual Tax Statement) which report the correct income ad TDS on the sale property at Rs. 4,65,00,000/- and Rs. 1,20,90,000/- being 26% of the Gross sale consideration U/s 195/197 of the Income Tax Act, 1961 as the assessee ( deductee) was a Non Resident in India. Para 4. However there is misleading reporting in the T1S showing having the same property to have been sold twine by different persons i.e The transactions has been reported as under the title No General Information category The transactions items 5 Sr. is correct 4 Sale of land or building Rs. 9,30,00,000/- Receipts from transfer of 5 Rs. 4,65,00.000/- immovable property
ITA No.92/CHD/2025 A.Y.2023-24 3
With the assistance of ld. Representative, we have gone through the record carefully. On a perusal of the impugned order passed by the CPC, Bangalore u/s 143(1) as well as the order of the CIT (Appeals), we find that there is no coherence between their conclusion vis-à-vis actual facts available on the record. The finding of the CIT (Appeals) is worthy to note in this connection which reads as under : “Decision : Here the main issue relates with short grant of TDS credit. In this regard, the assessee submitted its reply but not found acceptable because TDS share belongs to some person named Mehtab kaur. Moreover, the assessee also tailed to submit the copy of Bank account for F.Y.2022-23. Accordingly, appeal of the assessee is dismissed.” 5 This finding is totally vague. It is neither here nor there. It does not disclose as to why explanation of the assessee is not acceptable, as to how some other name crept-in in the TDS shares. The CIT (Appeals) was expected to call for complete record and thereafter adjudicate the issue specifically. After looking into the facts and the details submitted before us, we are of the view that it is unnecessary disallowance by the CPC Bangalore and unnecessarily confirmed by the CIT (Appeals). Therefore, we allow the appeal of the assessee and direct the A.Y.2023-24 4 Revenue to issue refund of Rs.37,88,470/- within one month from receipt of this order.
In the result, appeal of the assessee is allowed.
Order pronounced on 01.09.2025.