DIVISIONAL FOREST OFFICER,RAIGARH vs. INCOME TAX OFFICER (TCS), BILASPUR

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ITA 155/RPR/2018Status: DisposedITAT Raipur21 July 20225 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a clerical mistake in depositing TCS with the wrong PAN should not lead to penalization. The revenue authorities can rectify such errors, and the assessee cannot be denied credit for taxes already paid.

What were the facts?

The assessee inadvertently deposited Tax Collected at Source (TCS) with the PAN of deductees instead of its own TAN. This led to a demand of Rs. 14,60,301/- under sections 201(1) and 201(1A) of the Income-tax Act. Both the Assessing Officer and CIT(A) upheld this demand.

What were the issues?

Whether the assessee can be penalized for inadvertently depositing TCS with the deductee's PAN instead of the assessee's TAN, and whether credit for taxes paid can be denied due to such a clerical error.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM

Hearing: 21/07/2022Pronounced: 21/07/2022

O R D E R

Per Arun Khodpia, AM :

1.

This appeal is filed by the assessee against the order passed by the CIT(A), Bilaspur, dated 06.10.2016, on the following grounds :-

1. In the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has grossly erred in dismissing the appeal and confirming the order of Assessing Officer creating aggregate demand of Rs. 14,60,3 01/- under sections 201(1) and 201(1 A) of the Income-tax Act, 1961 overlooking the fact that the appellant had in fact collected due tax at source but inadvertently deposited said amount with PAN of deductees instead of appellant’s TAN.

2. The learned Commissioner of Income-tax (Appeals) erred in confirming the order under section 201(1) and 201(1 A) of the Income-tax Act, 1961 denying the submission that mistake of depositing the amount of TCS with PAN of deductees instead of appellant’s TAN was a clerical mistake and occurred due to lack of knowledge of law.

3. The learned Commissioner of Income-tax (Appeals) erred in confirming the order under section 201(1) and 201(1 A) of the Income-tax Act, 1961 on the ground that it is not possible to give credit of amount deposited in PAN of Deductee instead of depositor’s TAN.

4. The learned Commissioner of Income-tax (Appeals) erred in confirming the order under section 201(1 A) and (1 A) of the 2 Income-tax Act, 1961 on the ground that e-filing of Quarterly e- TCS returns with the erroneous details is not acceptable.

5. The learned Commissioner of Income-tax (Appeals) erred in confirming the order under section 201(1 A) and (1A) of the Income-tax Act, 1961 without calling for confirmations and supporting documents from deductees in whose PAN the amount of TCS was deposited and TCS certificates in FORM 27D were issued to calculate net loss of revenue and the order is arbitrary as there is no loss of revenue to the Department.

6. That on the facts and circumstances of the case the order of the learned Commissioner of Income-tax (Appeals) is bad-in- law.

7.

The Appellant reserves right to add, alter, amend, omit, and withdraw any of the grounds of appeal

2. Brief facts of the case are that a survey u/s.133A of the Act was conducted by the ITO-TDS and various TCS files, cash book, bill/vouchers files were produced and the same were test checked. The asked for proof of quarterly e-TCS return 27EQ for the period 2010-11 to 2012-13, however, the assessee could not produce the same before AO resulting into raising of demand of Rs.14,60,301/- on account of non- calculation of TCS/Short collection of TCS. Aggrieved thereby the assessee preferred appeal before the CIT(A) and the CIT(A) upheld the assessment order and dismissed the appeal of the assessee, against which the assessee is in further appeal before the Tribunal.

3. Ld. AR before us submitted that both the authorities have overlooked the fact that the assessee had in fact collected due tax at source but inadvertently deposited the said amount with PAN of dudectees instead of assessee’s TAN. It was also submitted by the ld. AR that mistake of depositing the amount of TCS with PAN of deductees instead of assessee’s TAN was a clerical mistake, which was pointed out 3 and explained before both the authorities, however, both the lower authorities without considered the explanation of the assessee. Therefore, ld. AR submitted that the AO may be directed to give credit of taxes already paid. To support his contentions, ld. AR placed reliance on the decision ITAT Jaipur Bench of the Tribunal in the case of LIC of India, in ITA Nos.222&223/JP/2013, order dated 09.10.2015.

4. On other hand, ld. Sr. DR supported the orders of the lower authorities.

5.

We have considered the rival submissions and perused the material available on record. At the outset, on perusal of the assessment order as well as the appellate order, it is found that the assessee has inadvertently deposited the said amount with PAN of dudectees instead of assessee’s TAN, on which the authorities below have opined that it is not possible to give credit of amount deposited in PAN of deductee instead of depositor’s TAN. Without going much into the merits of the case, prima facie, it is clear that there is a mistake on the part of the assessee in depositing the amount of TCS with PAN of deductees instead of assessee’s TAN. However, on careful perusal of the decision of the coordinate bench of the Tribunal in the case of LIC of India (supra), we found that the Tribunal has recorded the findings of the CIT(A) that the assessee cannot be penalized for such mistake which can be rectified by the revenue authorities and demand cannot be raised u/s.201(1)/201(1A) of the Act. In view of the above, the Tribunal has dismissed the appeal filed by the revenue and decided the issue in favour of the assessee after observing as under :-

3.

Being aggrieved, the assessee filed first appeal before Id. CIT (Appeals) who has set aside the order of the AO and directed to give credit of taxes paid by the assessee after verifying the tax payment. The relevant para 3.3 of the order of the Id. CIT (A) setting the order of AO is as under " 3.3. I have duly considered the submission of the Id. A/R and the material available on records. On the perusal of the copies of challans filed by the appellant, it is noticed that the appellant has used wrong challans for payment of tax. However, he cannot be penalized for the same and demand cannot be raised u/s 201(1)/201(1A) of the Act. AO is directed to verify the tax payments and give credit to the taxes paid by assessee. Similarly, he should also verify the Form No. 16 produced by the assessee and give credit to the tax deducted at source."

4.

Now the Revenue is before us.

5. We have heard rival contentions and perused the material available on record. After considering the order of the Id. CIT (A), we find no infirmity with the order of Id. CIT (A). However, to facilitate rectification of the above mistakes, the assessee is directed to furnish a detailed correction statement to the AO. Merely because of clerical mistake in mentioning the PAN No. instead of TAN No., assessee cannot be denied credit of TDS. The AO is directed to re-compute the tax demand and interest after verifying TDS deposited with the original challans and correction statement, and allow relief to the assessee as per law.

6.

Respectfully following the decision of the coordinate bench of the Tribunal in the above case, we direct the AO to verify the tax payments as claimed by the assessee and give credit to the tax paid by the assessee. The assessee is also directed to furnish the required documents before the AO for correction of the same. Accordingly, we set aside the order of both the authorities below and allow the appeal of the assessee for statistical purposes.

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