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Facts
The assessee, an NBFC, filed its return for AY 2020-21. The CPC made adjustments under Section 143(1) of the Act, disallowing TDS credit of Rs. 4,73,13,590 due to non-reflection in Form 26AS and disallowing employee's PF contribution of Rs. 6,71,222 under Section 36(1)(va) despite being paid within due dates. The Ld. CIT(A) subsequently remanded both issues back to the AO for verification.
Held
The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s order which had remanded both issues (TDS credit and employee's PF contribution) to the Assessing Officer (AO). The ITAT agreed that the AO should examine updated Form 26AS for TDS credit and original challans for PF deposits to verify the assessee's claims. Consequently, the assessee's appeal to the ITAT for direct relief was dismissed as the remand order was affirmed.
Key Issues
Whether the denial of TDS credit due to non-reflection in Form 26AS was justified, and whether the disallowance of employee's Provident Fund contribution was valid despite timely payment.
Sections Cited
Section 143(1), Section 205, Section 36(1)(va), Section 250, Section 143(3), Section 144B, Section 154
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI ARUN KHODPIA
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 28.01.2025 for the assessment year 2020-21 as per the following grounds of appeal:
1. Short grant of TDS credit 1.1. On facts and in the circumstance of the case and in law, the Hon'ble CIT(A) erred in upholding the order of the Central Processing Centre (intimation order passed under section 143(1) of the Act) of not granting credit of TDS deducted by the deductor amounting to Rs.4,73,13,590 solely on the ground that credit of such TDS is not reflecting in Form 26AS. 1.2. On facts and in the circumstance of the case and in law, the Hon'ble CIT(A) erred in not considering the4' provisions of Section 205 of the Act, per which the assessee should not be called upon to pay the tax on the income to the extent the deductor has already deducted tax from that income.
2. Disallowing deduction of Rs.6,71,222 was paid to Provident Fund within the due date 2.1. On facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not allowing the deduction for contribution to Provident Fund claimed by the Company in the return of income, while paging the appellate order under section 250 of the Act. 2.2. The Appellant prays that the Learned AO be directed to allow deduction of Rs.6,71,222 as the said amount was paid within the due date. The Appellant craves leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before or at the time of the appeal.”
2. The brief facts in this case are that the assessee is a non-banking financial company and derives income from business of lending and providing finance. The assessee company has filed its return of income for A.Y.2020-21 on 15.02.2021, declaring total income of Rs.39,18,42,890/-. Thereafter, the A.O/CPC, Bengaluru passed an intimation u/s.143(1) of the Act, dated 29.12.2021, making certain adjustments/raising tax payable over and above the returned income/tax payable. It is noted from the intimation u/s.143(1) of the Act that the adjustments were made mainly on two issues viz. (i) credit of TDS as claimed in ITR not allowed : Rs.4,73,13,590/-; and (ii) employee’s contribution to PF disallowed u/s. 36(1)(va) of the Act although the same was paid within due dates specified in the PF Act : Rs.6,71,222/-.
That being further aggrieved, the assessee company carried the matter in appeal before the first appellate authority. The Ld. CIT(Appeals)/NFAC remanded the matter to the file of JAO with a direction to verify and examine the updated Form 26AS as regards credit of TDS and also to examine and verify original challans of deposits of the respective amounts as regards employee’s contribution to PF. For the sake of completeness, the observations of the Ld. CIT(Appeals)/NFAC are culled out as follows:
“5. DECISION:- 5.1 I have carefully gone through the Intimation u/s.143(1), the grounds of appeal and submission made by the appellant in this regard. Briefly stating facts of the case is that the appellant filed return of income which was processed u/s.143(1) by CPC making certain adjustments over and above the returned income. Adjustments were made mainly on two issues — (i) credit of TDS as claimed in ITR not allowed and (ii) employee's contribution to PF disallowed u/s.36(1)(va) although paid within due dates specified in the PF Act. 5.2 The appellant by its submission dated 21.10.2024 informed that subsequent to filing of this appeal, its case was taken up for scrutiny assessment and order u/s.143(3) read with sec. 144B of the Act was passed on 27.09.2022. This order u/s.143(3) was again rectified u/s.154 of the Act by the jurisdictional assessing officer (JAO) by order dated 22.08.2023. The appellant stated that in these orders, although a further amount of TDS claimed in ITR was given credit, but still some amount of TDS was yet to be given credit. It also stated that the issue of addition on account of delayed deposit of employee's contribution to PF also remained unresolved. The appellant therefore requested to restrict the grounds of appeal to that extent. 5.3 Appellant's submission has been examined. As regard the issue of non credit of TDS is concerned, it may be stated that TDS/TCS credit is allowed to an assessee on the basis of Form 26AS for such assessee. The figures of receipts and corresponding TDS/TCS gets updated every time the deductor uploads the information. So updation of Form 26AS is a continuous process. The JAO is therefore directed to examine and verify the updated Form 26AS and allow credit of TDS as available therein. This ground of appeal is therefore allowed subject to such verification. 5.4 On the issue of employee's contribution to PF for Rs.6,71,222/-, the appellant has claimed that the disallowance was made due to reporting of incorrect dates of deposit in the tax audit report (TAR). The dates as per TAR was given as 12.08.2020 and 10.09.2020 instead of actual dates of 12.08.2019 and 10.09.2019 respectively. In this regard, the JAG is directed to examine and verify from the original challans of deposit of the respective amounts and rectify the order if appellant's claim is found to be correct. This ground of appeal is therefore allowed subject to such verification. In result, the appeal is allowed subject to verification as mentioned above.”
The Ld. Counsel for the assessee submitted that the A.O and Ld. CIT(Appeals)/NFAC has erred in not granting credit of TDS deducted by the deductor on the ground that credit of such TDS was not reflecting in Form 26AS. It was submitted by the Ld. Counsel that there was default on the part of the deductor, for which, the assessee should not suffer any tax liability.
The Ld. Sr. DR for the revenue relying on the order of the Ld. CIT(Appeals)/NFAC submitted that the issue was rightly decided by the Ld. CIT(Appeals)/NFAC by directing the A.O to verify the available credits in accordance with data available in Form 26AS of the assessee. It was also submitted by the Ld. Sr. DR that since the matter has been remanded to the A.O, then the assessee can claim the eligible credits before the A.O. Accordingly, the Ld. Sr. DR submitted that the order of the Ld. CIT(Appeals)/NFAC deserves to be confirmed.
We have carefully considered the submissions of the parties herein and perused the material available on record. On perusal of Para. 5.3 of order of the Ld. CIT(Appeals)/NFAC, it is noted that as regards non-credit of TDS, the figures of receipts and corresponding TDS/TCS gets updated every time the deductor uploads the information and therefore, updation of Form 26AS is a continuous process. Therefore, the Ld. CIT(Appeals)/NFAC had correctly set aside the issue to the file of the A.O with a direction to examine and verify the updated Form 26AS and allow credit of TDS as available therein. Accordingly, we concur with the view taken by the Ld. CIT(Appeals)/NFAC in setting aside the matter back to the file of the A.O for verification and adjudication as per law. The order of the Ld. CIT(Appeals)/NFAC is therefore upheld.
As regards, the issue of disallowance of employee’s contribution to PF, the Ld. CIT(Appeals)/NFAC remanded the issue back to the file of the A.O with a direction to examine and verify from the original challans of deposit of the respective amounts and adjudicate thereafter as per law. In this regard also, we concur with the view taken by the Ld. CIT(Appeals)/NFAC. The same is upheld.
As per the above terms grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 18th day of June, 2025.