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Facts
The assessee initially claimed Rs. 66,209/- as TDS/TCS credit, confirmed by Form 26AS. After an initial reduction by CPC and a subsequent rectification by AO granting the full credit and refund, the CPC again passed a suo moto re-rectification order under Section 154, denying the entire credit and raising a tax demand, which was upheld by the CIT(A).
Held
The Tribunal found the assessee's claim plausible given its reflection in Form 26AS. Consequently, the matter was remitted back to the Assessing Officer to verify the correctness of the TDS/TCS claim within three months, allowing the assessee to present supporting evidence.
Key Issues
Whether the CIT(A) and CPC erred in denying the TDS/TCS credit despite its reflection in Form 26AS and whether a re-rectification order denying such credit without opportunity to assessee is justified.
Sections Cited
Section 39(1) of the Income Tax Act 1961, Section 154 of the Income Tax Act 1961, Section 194LA of the Income Tax Act, Section 72 of the Income Tax Act, Section 143(1)(a) of the Income Tax Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SHRI PRADIP KUMAR KEDIA & SHRI SUDHIR PAREEK
This appeal is filed by the Assessee against the order dated 18.06.2024 of National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as Ld. CIT(A)] pertaining to Assessment Year 2022-23, on the following grounds:
“1. Because the learned CIT (A) faceless has erred in law and on facts in not appreciating that as per the provisions of Section 39(1) of the Income Tax Act 1961 the appellant is only required to report the Page 1 of 6
ITA No.- 3315/Del/2024 Kiran Kandhari income of the assessee earned, accrued, received which is reportable as per the provisions of the income tax act. The appellant had not reported the capital loss on the long term capital asset which was to be carried forward but included and claimed the TDS deducted on the sale transaction during the year under consideration keeping in view the facts and circumstances, order of CIT (A) is being bad on facts and law.
Because the CIT (A) faceless has erred in law in not appreciating that on the processing of the original return, on filing of a rectified return with clarification and reasons, the CPC Bangalore the processing authority had accepted the rectification and as such processed and issued the refund of Rs 20600 to the assessee. Therefore, the CIT(A) faceless has erred in law in making observations in the appellate order not appreciating that they cannot be rectification of an order of rectification passed by CPC in terms of Section154 of the Income Tax Act 1961
Because the learned CIT(A) faceless erred in law and on facts that the CPC Banglore have been considered and allow the benefit of TDS mandatory deduction in terms of Section 194LA of the Income Tax Act which is accountable as a prepaid tax by the appellants whose credit has to be allowed in the computation of the tax payable by the appellants and even if the income is in negative or requires to be carried forward, the same has to be allowed by the department
Because the CIT(A) Faceless has erred in law and on facts in not appreciating that the computation filed as revised/rectified computation of claim having been accepted by the department cannot be revised/rectified as a claim of loss being required only if it could be set off against the other income in terms of Section 72 of the income tax act but this being a case of carry forward, the same cannot be assumed to be taxed or having escaped tax and falls under the category of adjustment of Section 143(1)(a) of the Income tax act. Hence this appeal.
The appellant seeks to add, amend or alter any other ground of appeal before or at the time of hearing of the appeal.”
As per the grounds of appeal, the assessee has challenged the First Appellate Order dated 18.06.2024 arising from rectification
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ITA No.- 3315/Del/2024 Kiran Kandhari order passed by the Assessing Officer (in short, “AO”) U/s 154 of the Income Tax Act, 1961 (“in short, the Act”) dated 07.08.2023.
When the matter was called for hearing, the Ld. Counsel referred to the computation sheet showing the determination of the taxable income and the claim for refund. The Counsel pointed out that, according to the computation sheet, the assessee had claimed payment of taxes by way of TDS /TCS, aggregating to Rs. 66,209/-.
Thereafter, the Ld. Counsel also referred to Form 26AS, wherein all these amounts claims by way of TDS /TCS were duly reflected. The Ld. AR thereafter pointed out that as per the intimation processed by CPC u/s 143 (1) of the Act, the TDS claimed to be Rs. 66,209/- was brought down to 21,101/-. As against the denial of remaining tax credit, the assessee filed rectification application before the AO.
The AO vide order dated 24.04.2023, granted the TDS /TCS as claimed and eventually granted refund of Rs. 20,600 as claimed.
However, by another order dated 07.08.2023, the CPC suo moto passed a re-rectified order u/s 154 of the Act, wherein the benefit of entire TDS /TCS credit claimed in the return of aggregating to Rs. 66,209/- was denied leading to a tax demand of Rs. 45,280/-.
The Ld. Counsel thereafter adverted to First Appellate Order and Page 3 of 6
ITA No.- 3315/Del/2024 Kiran Kandhari pointed out that the CIT(A) has also cursorily denied the claim of tax credits, holding that in the absence of particulars and issue becomes debatable. The Ld. Counsel submitted that there was no justification on the part of the Revenue to rectify the existing rectification order unilaterally without giving opportunity before rectification order was passed in the second round to deny the tax credit duly reflected in Form number 26AS. The Ld. Counsel thus sought suitable relief in the matter.
The learned Departmental Representative (in short, the “Ld.
DR”) for the Revenue did not offer any comment.
On careful consideration of the factual matrix pointed out on behalf of the assessee, it appears that the assessee has claimed TDS credit of Rs. 66,209/- as per the return of income in conformity with the annual statement in Form 26AS generated by the Income Tax Department.
The case presented on behalf of the assessee appears plausible. Accordingly, the matter is remitted back to the file of the AO. The Assessing Officer shall ascertain the correctness of TDS /TCS claim in the facts context of the case and pass a suitable
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ITA No.- 3315/Del/2024 Kiran Kandhari order expeditiously and preferably within three months from the date of receipt of this order. It shall be open to the assessee to present such facts before the AO as may be considered expedient to support the TDS / TCS credit claims.
In the result, appeal of the assessee allowed for statistical purposes.
Order pronounced and dictated in the open court on _ 11/11/2024.
Sd/- Sd/- (PRADIP KUMAR KEDIA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 11.11.2024 Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT NEW DELHI. Page 5 of 6 ITA No.- 3315/Del/2024 Kiran Kandhari Date of dictation 11.11.24
12.11.24 Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member
Date on which the approved draft comes to the Sr. PS/PS
Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant Registrar for signature on the order
Date of dispatch of the Order
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