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Facts
The appellant, Swift India Corporate Services LLP, filed its return of income and claimed TDS credit. The CPC processed the return and disallowed a portion of the TDS credit due to mismatch. The CIT(A) dismissed the appeal for lack of details.
Held
The Tribunal noted that the issue involved short-grant of TDS credit due to TDS mismatch in Form 26AS and charging of interest under Sections 234B and 234C. The Tribunal set aside the order of the CIT(A) and restored the matter to the AO for verification of details and correct TDS credit grant.
Key Issues
Short-grant of TDS credit due to mismatch in Form 26AS and charging of interest under Sections 234B and 234C.
Sections Cited
234B, 234C, 143(1), 250, 199, 37BA
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI RATNESH NANDAN SAHAY
O R D E R
Per : Ratnesh Nandan Sahay, Accountant Member:
This appeal has been filed by the appellant against the Order of the Ld. CIT (Appeals) passed u/s. 250 of the Income Tax Act [the ‘Act’ in short] Swift India Corporate Services LLP; A. Y.2022-23 vide DIN & Order No. ITBA/APL/S/250/2024-25/1064049241(1) Dated 12/04/2024 for the Assessment Year 2022-23.
Following grounds of appeal have been raised by the appellant: “GROUND NO. I: SHORT-GRANT OF CREDIT OF TDS AMOUNTING TO RS.3,48,134/- :
1. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the decision of the Ld. AO in not granting TDS credit to the extent of Rs.3,48,134/-
2. The Appellant prays that it be granted balance credit of TDS of Rs.3,48,134/-.
3. Without prejudice, a direction be given to grant the credit in the year in which TDS credit is reflected in Form 26AS. GROUND NO. II: CHARGING INTEREST UNDER SECTION 234B AND 234C OF THE ACT:
1. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the decision of Ld. AO in charging interest under Sections 234B and 234C of the Act.
2. The Appellant prays that the interest chargeable under Sections 2348 and 234C of the Act be accordingly corrected/reduced. GENERAL The Appellant Company craves leave to add, alter and/or amend or delete all or any of the grounds of appeal at the time of hearing.”
3. Mainly, there are two grounds of appeal one relating to the short-grant of credit of TDS and another is charging of interest u/s. 234B and 234C of the Income Tax Act. The facts of the case, in brief, are that the appellant is a Limited Liability Partnership (LLP) firm engaged in providing corporate advisory services. The appellant has filed its Swift India Corporate Services LLP; A. Y.2022-23 original return of income on 21/10/2022 declaring total income of Rs.4,11,47,310/-. The return of income was processed u/s. 143(1) by the ADIT, CPC, Bangalore on a sum of total income of Rs.4,11,47,310/-. However, while processing the return of income, the TDS credit of Rs.3,93,475/- was not allowed with the following comments “mismatch between tax credits claimed and allowed for Rs.3,93,475/-“.
4. Aggrieved by the order of the AO (CPC), the appellant filed the appeal before the Ld. Commissioner of Income Tax appeal. The Ld. CIT (A) vide the impugned order dismissed the appeal of the assessee on the ground that despite numerous notices were issued to the appellant on 13/12/2023, 26/02/2024 and 13/03/2024, it could not produced any relevant details in support of the claim of TDS.
During the appellate proceedings before us, the appellant had submitted as under: “In the case of Swift India Corporate Services LLP (the Appellant')
Year Appeal By 2020-21 Assessee 2022-23 Assessee ITA No. 3469/MUM/2024 2023-24 Assessee Swift India Corporate Services LLP; A. Y.2022-23 Brief Synopsis The captioned matters were heard on September 02, 2024 before Your Honours. At the conclusion of the said hearing, the Hon'ble Bench has directed to file a brief synopsis, the same is being filed under this note The sole and common issue involved in the captioned appeals is regarding short credit of TDS on account of TDS mismatch in Form 26AS. All these appeals arise from the initiation u/s. 143(1) of the Income-tax Act, 1961 (the Act'). The Appellant is a Limited Liability Partnership Firm, engaged in the business of corporate consultation and advisory services. The revenue from the said business activity is recognised once the service is rendered and invoice is booked and the same is accordingly offered for taxation. The table below captures the summary of TDS credit claimed in Appellant's return of income ("ROI") and the TDS credit granted by the CPC in the impugned intimations: Assessment Amount of Amount of TDS credit Year TDS Credit TDS Credit short granted claimed in the granted by ROI CPC 2020-21 52,21,155 48,08,241 4,12,914 2022-23 63,20,050 59,26,575 3,93,475 2023-24 87,10,204 82,35,435 4,74,769 The major reasons for mismatch in TDS credit are as under: i. TDS credit is appearing in Form 26AS of subsequent years and hence there is overlap of TDS credit between AY 2020- 21, AY 2022-23 and AY 2023-24. (Please refer Factual Paper Book Pg 90 of filed for AY 2020- 21). ii. Some of the vendors account for payments on cash basis and hence they make TDS deduction at the time of actual payment and however the Appellant has accounted for the income on mercantile basis and hence there will be overlap of TDS credit over different years. (Please refer Factual Paper Book Pg 90 of ITA No. 3468/MUM/2024) iii. Failure on the part of some of the vendors while filing their TDS return to disclose TDS credit on transactions pertaining to the Appellant. (Please refer Factual Paper Book Pg 90 of ITA No. 3468/MUM/2024) Ld. CIT(A) has, although stated that the Appellant has filed its submissions on 22/09/2022, has wrongly stated that the Appellant has not filed any reconciliation. This is fact is incorrect in light of the reconciliation statement filed alongwith Swift India Corporate Services LLP; A. Y.2022-23 the submissions which have been reproduced in the order of the Id. CIT(A) (Reconciliation statement is at Pg. 90 of the FPB). As is evident from the said reconciliation statement, there is an overlap of TDS Credits across different years and the same needs to be granted for the correct assessment year in which the Appellant has offered the corresponding income for tax in the return of income which will be in line with the provisions of s. 199 of the Act read with Rule 37BA. In view of the foregoing, it is most humbly submitted that the order of the Id. CIT(A) for all 3 years be quashed and the matters be sent back to the file of the Id. Jurisdictional Assessing Officer for verification of the necessary details and grant the correct TDS credit for respective assessment year.”
We have considered the facts of the case and the impugned order and it would be in the interest of the justice that the claim of the appellant in all the three assessment years are considered in view of the submissions made by the appellant. We, therefore, set aside the order of the Ld. CIT (A) and restore the file back to the Ld. AO to verify the claim of the appellant after taking into consideration all the relevant details/documents submitted by the appellant. The appellant is also directed to produce all relevant details before the Ld. AO to make Swift India Corporate Services LLP; A. Y.2022-23 necessary verifications into the claims of the appellant and allowed the TDS credit accordingly.
In the result, the appeal is allowed for statistical purpose. Order pronounced in the open court on 21.10.2024.