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Facts
The assessee, Suja International, a partnership firm formed on 01.04.2011, was denied TDS credit of Rs. 9,54,132/- for AY 2012-13 because the deductor, Bosch Rexroth BV, incorrectly reported the TDS in AY 2011-12, an year the assessee did not exist. Despite the corresponding income being assessed in AY 2012-13, the AO rejected the rectification application and CIT(A) dismissed the appeal, citing non-reflection in 26AS.
Held
The Tribunal acknowledged the genuine hardship and directed the Assessing Officer to allow the TDS credit of Rs. 9,54,132/- for AY 2012-13. This allowance is conditional upon verification of facts and potentially through an application by the assessee under Section 119(2)(b) of the Income Tax Act, 1961, to address the grievance.
Key Issues
Whether TDS credit can be allowed to an assessee for the correct assessment year when the deductor mistakenly reported it in an earlier year during which the assessee was not in existence, and the income was correctly assessed in the relevant year.
Sections Cited
Section 143(1), Section 154, Section 194J, Section 119, Section 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI
Appellantby Sh. Prashant Khandelwal, Adv. Respondent by Sh. Anuj Garg, Sr. DR Date of Hearing 22/04/2024 Date of Pronouncement 26/04/2024 ORDER PER AVDHESH KUMAR MISHRA, AM
This appeal preferred by the Assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi [In Short ‘the CIT(A)’] on 16.01.2023.
The assessee has raised six grounds of appeal which revolve around sole and substantive issue of non-allowance of the credit of Tax Deducted at Source [In short ‘TDS’] of Rs. 9,54,132/- in the relevant assessment year irrespective of the fact that the consequential income thereof at Rs. 94,41,321/- had been assessed in the relevant assessment year.
3. The relevant facts, in brief, are that the Assessee, a partnership firm, came into existence on 01.04.2011. The Assessee filed its return of income for the relevant assessment year [In short ‘the A.Y.] declaring income of Rs.2,59,34,740/-. In the return of income, the appellant-assessee claimed refund of Rs.9,24,470/-. The return of income was processed u/s 143(1) of the Income Tax Act, 1961 [In short ‘the Act’]. In the processing of the ITR u/s 143(1) of the Act, the Assessing Officer [In short ‘the AO’] did not allow the credit of TDS of Rs.9,54,132/-.Therefore, the appellant assessee filed the rectification application on 3rd April, 2018 stating that the income of Rs.95,41,321/- corresponding to the TDS of Rs.9,54,132/- had been assessed in the relevant AY; therefore, the consequential credit of the TDS has to be given u/s 143(1) of the Act. The AO rejected the application of the appellant-assessee filed u/s 154 of the Act on the reasoning that the TDS of Rs.9,54,132/- claimed by the appellant-assessee did not get reflected in its 26AS; therefore, the credit of the said TDS amount cannot be allowed in the relevant year. Aggrieved, the appellant-assessee filed the appeal before the CIT(A) who dismissed the appeal. Hence, this appeal is before us.
The Ld. AR submitted that the deductor “Bosch Rexroth BV” who deducted tax of Rs.9,54,132/- u/s 194J of the Act for the AY 2012-13 had wrongly shown the said TDS amount in the AY 2011- 12 its TDS statement. Therefore, the TDS of Rs.9,54,132/- is not getting reflected in the 26AS of the appellant in the relevant year; i.e. the AY 2012-13. In support of the claim, the Ld. AR filed details of the ledger of the bank account where the aforementioned receipts corresponding to the TDS of Rs.9,54,132/- did get credited/reflected. The Ld. AR further submitted that the appellant- assessee is not getting its TDS credit due to the wrong submission of TDS statement by the deductor, “Bosch Rexroth BV” though the consequential income of Rs.95,41,321/- had been assessed in the relevant AY. It was further submitted that the appellant-assessee’s case for the AY 2011-12 was reopened based on the TDS statement filed by the deductor, “Bosch Rexroth BV”. However, the same was dropped after submission of the detailed reply, as mentioned above, by the appellant-assessee. The Ld. AR also submitted that the appellant-assessee, in view of the above facts, had requested the deductor “Bosch Rexroth BV”, a foreign company, to revise its TDS statement but in vain.
The Ld. DR submitted that the credit of TDS as mentioned above cannot be given as the same is not getting reflected in the appellant-assessee’s 26AS. The best recourse, according to the Ld. DR, is that the appellant-assessee should request the deductor “Bosch Rexroth BV” to revise the TDS statement in this regard.
We have heard both the parties at length and perused the record. We find that there is a genuine hardship to the appellant- assessee in not getting the credit of the TDS of Rs.9,54,132/- particularly when the appellant-assessee cannot file the return of income for the AY 2011-12 claiming the credit of TDS of Rs.9,54,132/- because the assessee was not in existence in the AY 2011-12. Technically, the AO is not able to give credit of the TDS of Rs.9,54,132/- in the AY 2012-13 as the same is not getting reflected in the asessee’s 26AS. Theoretically, the AO appears justified in not allowing credit of TDS of Rs.9,54,132/- in AY2012- 13 but a way out has to be worked out by the AO to address the genuine hardship of the appellant-assessee and allow credit of TDS of Rs.9,54,132/- in the AY 2012-13 after verifying the facts of the case and by resorting to the provision of Section 119 of the Act if the appellant-assessee files application u/s Section 119(2)(b) of the Act to get address its grievance as per the law.
In view of the above, the appeal of the assessee is allowed for statistical purposes. Order pronounced in open Court on 26th April, 2024