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Facts
The appeals were filed after the expiry of the period of limitation with an application for condonation of delay. The common grievance in both appeals relates to the non-grant of TDS credit, though the quantum may differ. The assessee claims the income on which TDS was deducted is exempt from tax in India.
Held
The Tribunal held that tax credit cannot be denied if it is reflected in Form 26AS. Therefore, the AO is directed to allow the tax credit. However, the assessee must demonstrate that the income is not taxable in India.
Key Issues
Whether TDS credit can be denied if reflected in Form 26AS, even if the income is claimed to be exempt in India.
Sections Cited
Rule 37BA of the Income Tax Rules, 1962
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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SMT. KAVITHA RAJAGOPAL, HON’BLE
O R D E R PER NARENDRA KUMAR BILLAIYA, AM: & I.T.A. No. 2170/Mum/2024, are two separate appeals by the assessee preferred against two separate orders of the ld. CIT(A)-58, Mumbai, dt. 08/06/2023 and 31/01/2024, pertaining to AY 2017-18 and 2018-19, respectively. 2 2. The captioned appeals are filed after the expiry of period of limitation with an application for condonation of delay. We have carefully considered the reasons for delay in filing of the appeal and we are convinced that the assessee was prevented by sufficient cause for not filing the appeals on time. Hence, the delay is condoned and the appeals admitted.
Since common grievance is involved in both the appeals, they were heard together and are disposed off by this common order for the sake of convenience and brevity.
The common grievance relates to the non-grant of TDS credit, though the quantum may differ.
The quarrel revolves around Rule 37BA of the Income Tax Rules, 1962 (in short ‘the Rules’), according to which TDS credit is allowable in the year in which the assessee has offered corresponding income for taxation. Since the income of the assessee, as claimed by the ld. Counsel for the assessee, is exempt from tax in India, therefore, the same was not offered for taxation in the return of income filed by the assessee.
Since the payer has deducted tax at source out of abundant precaution, the assessee claimed refund of the tax deducted at source by filing the impugned returns of income and the said credit was denied by the revenue authorities drawing support from Rule 37BA of the Rules, though the credit is duly reflected in Form 26AS in the Income-tax portal.