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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI P.M. JAGTAP, VICE- & SHRI T.R. SENTHIL KUMAR
आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ ‘A’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD ] ] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No. 71/Ahd/2019 Assessment Year : 2016-17 Mukesh M. Shah & Co., DCIT, 7th Floor, Heritage Chambers, Vs CPC-Bengaluru B/h. Bikanerwala, Nr. Azad Society, Nehrunagar, Ahmedabad – 380015 PAN : AAIFM 0810 A अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri M.J. Shah, AR Revenue by : Shri Shramdeep Sinha, Sr. DR सुनवाई क� तार�ख/Date of Hearing : 23/08/2022 घोषणा क� तार�ख /Date of Pronouncement: 28/09/2022 आदेश/O R D E R PER P.M. JAGTAP, VICE-PRESIDENT :
This appeal filed by the assessee is directed against the order of learned Commissioner of Income-tax (Appeals)-4, Ahmedabad [“CIT(A)” in short] dated 03.01.2019 and the grounds raised by the assessee therein read as under:-
The learned C.I.T. (Appeals) is not justified in not allowing the full credit of TDS of Rs.32,28,248/- as claimed by the appellant in its return of income.
The learned C.I.T. (Appeals) while not granting the full credit of TDS as claimed by the appellant in its return of income has overlooked the fact that the appellant follows “Cash Method” of accounting as per statutorily permitted in terms of the provisions of Section 145 of the Income-tax Act, 1961 regularly and has claimed credit of TDS made by the deductor against Professional receipts offered to tax during the previous year irrespective of the financial year in which such TDS was made by the deducotr, in compliance with the provisions of Section 199 read with Rule 37BA of the Income-tax Rules, 1962
ITA No. 71/Ahd/2019 Mukesh M. Shah & Co Vs. DCIT AY : 2016-17 2
The assessee, in the present case, is a partnership firm which filed its return of income for the year under consideration on 17.08.2016 claiming credit for TDS amounting to Rs.32,28,248/- and consequently showing refund of Rs.4,46,630/-. While processing the said return under Section 143(1) of the Income-tax Act, 1961 (“the Act” in short), the Assessing Officer (CPC) granted TDS credit only to the extent of Rs.9,33,296/- and raised a demand of Rs.20,97,939/-. Thereafter, the assessee filed an application under Section 154 of the Act seeking rectification of the mistake in allowing the full amount of TDS as claimed by it in the return of income. The said application was disposed of by the Assessing Officer (CPC) vide an order dated 17.03.2017 thereby credit for TDS was granted to the extent of Rs.9,46,105/- (increased by Rs.12,809/- only) and a demand of Rs.20,83,376/- was raised.
Against the order passed by the Assessing Officer (CPC) dated 17.03.2017 under Section 154 of the Act, an appeal was filed by the assessee before the learned CIT(A) and after considering the submissions made by the assessee as well as the material available on record, the learned CIT(A) decided the issue relating to assessee’s claim for credit of TDS vide his impugned order dated 03.01.2019 as under:-
“The fact remains that the first appellate authority also doesn't have much of evidences and even if filed have limited mandate to which verification could be done as the preliminary examination of such evidences has not been done by the assessing officer having natural jurisdiction over the case. It is also noted that there is very limited sphere of power with the department u/s, 143(1) to undertake adjustments in the returned income as per provisions of IT Act, 1961 and entries in Form 26AS are important guiding light for any such action. This is a reality which must be accepted by the appellant.
ITA No. 71/Ahd/2019 Mukesh M. Shah & Co Vs. DCIT AY : 2016-17 3 Therefore, I decide to direct the AO to grant credit of any TDS deducted in A.Y.2016-17 provided the commensurate receipt is also brought to tax in A.Y. 2016-17. Similarly, the credit for TDS deducted in A.Y. 2017-18 should be granted in A.Y. 2017-18 without leaving out any commensurate income for assessment in A.Y. 2017-18. The Form No.26AS would not be causing any problem to either party provided the deductor has uploaded the correct details in TDS returns. The appellant has to interface with AO only, in case certain mistakes crept in because of wrong punching while uploading TDS details by the deductors. The All Gujarat Federation of Tax Consultants vide communication dated 28/04/2017 has urged CBDT to direct the AOs to grant credit for the TDS if the same is reflected in 26AS of tax payer. While concurring with this proposal dated 28.04.2017, it is my opinion that the related bills should also be part of total turnover for the related assessment year. The TDS and the income has to go hand in hand. Therefore, while adjudicating ground no.1 of this appeal, I direct the AO to give TDS credit in A.Y.2016-17 for the deductions made in F.Y. 2015-16 by ensuring that the total commensurate amount is brought to tax in A.Y.2016- 17 itself. It is my conscious decision not to accede to the demand of appellant for allowing TDS credit pertaining to A.Y. 2010-11, A.Y. 2011-12, A.Y. 2012-13, AY. 2013-14, A.Y. 2014-15 & A.Y. 2015-16. The ground No.1 is accordingly dispose off with the direction to AO to issue revised demand notice.”
Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both the sides and also perused the relevant material available on record. The learned Counsel for the assessee has submitted that another application for rectification under Section 154 was filed by the assessee before the Assessing Officer and while disposing of the same vide an order dated 28.06.2019 passed under Section 154, the Assessing Officer allowed full credit of TDS of Rs.32,28,248/- as claimed by the assessee in the return of income. He has submitted that the appeal filed by the assessee before the learned CIT(A) and the impugned order passed by the learned CIT(A) disposing of the said appeal has become infructuous and urged that the same may be cancelled. After having perused the copy
ITA No. 71/Ahd/2019 Mukesh M. Shah & Co Vs. DCIT AY : 2016-17 4
of the order dated 28.06.2019 passed by the Assessing Officer under Section 154 of the Act - copy of which is placed on record before us, we are inclined to accept the contention of the learned Counsel for the assessee. Even the learned Departmental Representative has not raised any objection in this regard. We accordingly set aside the impugned order passed by the learned CIT(A) and allow this appeal of the assessee.
Order pronounced in the open Court on 28th September, 2022 at Ahmedabad.
Sd/- Sd/-
(T.R. SENTHIL KUMAR) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad, Dated 28/09/2022 *Bt आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त ( अपील ) / The CIT(A)- 5. �वभागीय ��त�न�ध आयकर अपील�य अ�धकरण/DR,ITAT, Ahmedabad, , 6. गाड� फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण
ITAT, Ahmedabad Date of dictation- 21.09.2022……two pages dictation pad attached …… 2. Date on which the typed draft is placed before the Dictating Member …22.09.2022 ………… Other member.…27.08.2022 ………. 3. Date on which the approved draft comes to the Sr.P.S./P.S. - …27.08.2022…………… 4. Date on which the fair order is placed before the Dictating Member for Pronouncement …28.09.2022. 5. Date on which the file goes to the Bench Clerk…28.09.2022………… 6. Date on which the file goes to the Head Clerk……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order………………… 8. Date of Despatch of the Order………………