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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM
आदेश / O R D E R Per Arun Khodpia, AM:
1. The captioned appeal is filed by the assessee against the order of Addl/ JCIT (A)-6, Kolkata, [in short “Ld. CIT(A)”], u/s 250 of the Income Tax Act, 1961 (in short “The Act”), for the AY 2019-20 dated 25.10.2024, which in turn arises from the order u/s 154 dated 28.01.2021 (against Intimation u/s 143(1) dated 13.01.2021), passed by Asstt. Director of Income Tax, Centralized Proceedings Centre (CPC), (in short Ld. AO”).
2. The grounds of appeal raised by the assessee are as under:
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 (passed under section 154 of the Act against intimation order issued under section 143(1) of the Act) of not granting credit of TDS deducted by the deductor amounting to Rs.1,82,20,456 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 the 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.
Interest under section 2348 & 234C
2.1. On facts and in the circumstance of the case and in law, the Hon'ble CIT(A) erred in confirming the levy of consequential interest under section 234B and 234C of the Act.
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.
Further, the Appellant craves leave to submit such facts/ documents/ evidence in the course of hearing as may be necessary.
BRIEF FACTS OF THE CASE:- The appellant is a non-banking financial Company and derives income from Business of lending and providing finance. The appellant filed return of income for the A.Y 2019-20 on 29.11.2019 declaring total income of Rs:1,10,13,53,140/-. Subsequently, the Appellant revised its return of income for AY 2019-20 on 28.11.2020 declaring total income of Rs.1,08,94,96,020/-.
The return was processed u/s 143(1) by CPC on 13.01.2021 accepting the returned income but raising demand of Rs.2,75,45,259/-. CPC then rectified the Intimation dated 13.01.2021 and issued order u/s 154 dated 28.01.2021 again accepting the returned income but reducing the demand raised to Rs.2,69,77,960/-.
4 . Being aggrieved with the aforesaid order u/s 154 assessee preferred an appeal before the Ld. CIT(A), who remitted the matter back to the jurisdictional Assessing Officer with the direction to reexamine and verify 26AS again and allow credit of TDS as eligible to the assessee. The relevant observations of Ld. CIT(A) are as under:
V. DECISION: - 5.1 I have carefully gone through the original Intimation passed u/s 143(1) and the rectified Intimation passed u/s 154 as well as grounds of appeal and submission made by the appellant. Briefly stating facts of the case is that the appellant filed return of income which was first processed u/s 143(1) on 13.01.2021 giving short credit of Xander Finance Private Limited vs ACIT, Central-1(1), Raipur TDS by Rs.2,54,70,378/-. After being pointed out by appellant, the CPC then rectified the first Intimation and issued an order u/s 154 on 28.01.2021 where credit to some more TDS was given but still the credit was short by Rs.2,48,37,091/-. The appellant again requested for rectifying the defect towards short credit of TDS and CPC issued another order u/s 154 on 09.08.2021 but again there was short credit of TDS by Rs.1,82,20,456/-. The present appeal is against the 154 order dated 28.01.2021. But since another order u/s 154 was passed on 09.08.2021 subsequent to filing of this appeal, the appellant has revised the grounds of appeal only revising the amount of short credit of TDS. The other grounds of appeal are related to consequential levy of interest u/s 234B and 234C of the Act.
5.2 In this regard, without going into the merits of the issues involved and without going into what different Tribunals and Courts have given judgements on similar issues, I would like to mention the limitation of this authority regarding examination and verification of TDS / TCS and advance taxes paid by an assessee. The assessing officers (CPC including) are guided by circulars and instructions issued from time to time by CBDT that TDS credit to the extent of only that matching with 26AS shall be given. It is no fault of the assessing officers if the respective deductors either fail to deduct TDS properly or after deducting fails to deposit it with govt. account properly or even after deducting and depositing fails to upload it in the 26AS system properly. It is more so apparent in the present case itself when CPC carried out two rectifications of the original Intimation u/s 143(1) by giving credit of TDS as updated in 26AS from time to time. The jurisdictional assessing officer is therefore directed to examine and verify 26AS again and allow credit of TDS as eligible to the appellant. This ground of appeal is therefore allowed subject to the above examination and verification.
5.3 As regard the levy of interest u/s 234B and 234C, it is again reiterated that charging of such interest are mandatory as per Act. These depend on the amount and dates of payment of prepaid taxes which again are not accessible to this authority. On this Xander Finance Private Limited vs ACIT, Central-1(1), Raipur issue also, the jurisdictional assessing officer is therefore directed to examine and verify the dates and amount of payment of prepaid taxes and determine the quantum of interest as per provisions of the Act. This ground of appeal is also therefore allowed subject to the above examination and verification.
In result, the appeal is allowed subject to the above examination and verification.
Aggrieved with the aforesaid decision of Ld. CIT(A), assessee preferred the present appeal for our consideration.
At the outset, Shri Ravi Agrawal, CA representing the assessee (in short “Ld. AR”), submitted that the assessee in the present case has been saddled with the liability to pay the taxes which are deducted from his income, whereas as the provisions of section 205 r.w.s. 201 of the Income Tax Act, the default is on the part of deductor for which there are sufficient provisions in Income Tax Act to recover the TDS amount from the persons who as deducted it. The assessee, therefore, should not be penalized for the act of deductors. Ld. AR placed his reliance on the following judgments and office memorandum issued by CBDT:
a. Smt. Anusuya Alva Vs. DCIT [ 278 ITR 206 (Kart.)] -- relevant page - 97 and 98 of PB b. Pushkar Prabhat Chandra Jain Vs. Union of India [ 309 CTR 218 (Born) ] - Page - 104 of PB, d. Yashpal Sahni Vs. Rekha Hajamavis, ACIT [ 293 ITR 539 (Born)] Page 118-119 of PB e. Shri Rajesh Dadu Vs. DCIT [ order dt.31/03/2023 (Hydrabad Bench of ITAT) - at page- 131 & 132 of PB f. Office Memorandum issued by CBDT on 11/03/2016 - page - 133 of PB.
Further reliance is placed on following decisions: a. Ashok Kumar Chowatia Vs. JCIT (TDS) [435 ITR 499 (Mad) ] b. ACIT Vs. Om Prakash Gattami [242 ITR 638 (Gau)] c. Ahluwalia & Associates Vs. ITO [33 SOT 1 (Ahm)] d. Chandrashekhar Sadashiv Potphode Vs. DCIT [ 147 taxmann.com 260 (Pune ITAT)]
Ld. AR drew our attention to the office memorandum F. No. 275/29/2014-IT(B) dt. 11.03.2016, the same is culled out for the sake of reference:
In backdrop of the aforesaid submissions, it was the prayer by Ld. AR that Ld. AO be directed to allow the credit of TDS sought granted and consequently, deleting the demand raised on the appellant including erroneous levy of interest u/s 234B, 234C of the Act.
Per contra, Smt. Tarannum Verma, Sr. DR representing the revenue, vehemently supported the order of Ld. CIT(A) and have submitted that the issue was judiciously decided by the First Appellate Authority by directing the Ld. AO to allow the available credits in accordance with data available in Form No. 26AS of the assessee. Ld. Sr. DR further furnished before us, a copy of communication from Income Tax Gazetted Officers Association, West Bengal Unit to the Chief Commissioner of Income Tax (CCA), Kolkata, dated 01.11.2013 referring to Instruction No. 5/2013 dated 08.07.2013 regarding SOP in the matters of TDS mismatch to be adhered to by the Assessing Officers. Copy of the said letter dated 01.11.2013 is culled out hereunder for the sake of clarity.
Based on the aforesaid submissions, Ld. Sr. DR submitted that since the matter is restored to the file of Ld. AO, the assessee is not remediless and can claim the eligible credits before the Ld. AO. In view of such facts, Ld. CIT(A) have rightly adjudicated the issue, fairly in the interest of justice, the same deserves to be sustained.
We have considered the rival submissions, perused the material available on record and case laws relied upon by the Ld. AR. Admittedly, on perusal of the copy of ITR acknowledgment, computation of income etc. It is apparent that the assessee had claimed an amount of Rs.23,66,44,625/-, however, Form 26 of the Assessee is not showing the entire credit of TDS which the assessee had claimed in its ITR. The sole grievance of the assessee is that the deductions made by various deductors are not reflected in it’s 26AS, but the AO should allow the same based on assessee’s claim without referring to 26AS. On the other hand, it was the contention by revenue that the Ld. AO is abided by the guideline’s issues by CBDT and accordingly, he cannot accept the claim of assessee brushing aside the guidelines so issued. Since the assessee had furnished before us various documents, like copy of ITR Acknowledgment and Computation, copy of Form 26AS dated 30.08.2021, chart showing disallowed TDS claim, party wise ledgers, Bank Xander Finance Private Limited vs ACIT, Central-1(1), Raipur statements etc., all such documents and information needs verification and examination by the Ld. AO, which could not have been done as the same were not there before the Ld. AO, while the return of assessee was processed by CPC u/s 143(1) and further rectified u/s 154 of the Act, for this reason the matter requires to be set aside so as to decide the issue legitimately. As the matter is already restored to the file of Ld. AO by the Ld. CIT(A), the assessee had all the opportunities to substantiate with the support of corroborative evidence that such deductions are made by the respective deductors to establish that such claim of TDS is not reflected in Form 26AS on account of default on the part of the deductors. The claim of the assessee thereafter can be permitted as per the provisions of the Act and in accordance with instructions issued by CBDT in this respect. Ld. AO is directed to afford reasonable opportunity of being heard from the assessee and the assessee would be at liberty to raise the contentions based on facts, law and jurisprudence in the set aside assessment proceedings.
In backdrop of the aforesaid observations, we concur with the order of Ld. CIT(A) in setting aside the matter back to the files of Ld. AO, with slight modification to allow the claim of TDS and the enforcement of demand on account of mismatch of credit of TDS, in accordance with the mandate of law.
Xander Finance Private Limited vs ACIT, Central-1(1), Raipur 13. In result, the appeal of the assessee in is partly allowed for statistical purposes, in terms of our aforesaid observations.
Order pronounced in the open court on 31/01/2025.