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Income Tax Appellate Tribunal, DELHI “F” BENCH: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI ANUBHAV SHARMA
ORDER PER SHAMIM YAHYA, AM : This appeal by the assessee is directed against the order of the National Face Appeal Centre (NFAC), New Delhi, dated 19.11.2021 pertaining to Assessment Year 2016-17.
The grounds of appeal reads as under:-
I. That the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre ['Ld. CIT(A) has erred in the law and facts and circumstances of the case in confirming the addition of Rs. 181,500/- as assessed by the learned Assistant Commissioner of Income Tax, circle 2(2)(1), Ghaziabad ("Ld. AO"). II. That the Ld. CIT (A) erred in law and facts of the case while confirming the addition of Rs. 181500 without application of mind. 1 | P a g e III. That the Ld. CIT (A) has erred on the law and facts and circumstances of the case in confirming the addition of Rs. 181,500/- without appreciating the facts that the appellant follows the cash basis of accounting and said amount had already offered to tax during the assessment year under consideration and hence confirmed the double addition made by the Ld. AO. IV. That the Ld. CIT (A) has erred in law and facts and circumstances of the case in confirming the order of the Ld. AO in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961 ("the Act"). V. That the Ld. CIT (A) has erred in law and facts and circumstances of the case in confirming the order of the Ld. AO in initiation penalty proceedings Section271(1)(c) of the Act.
Brief facts of the case are that the assessee is a practicing Chartered Accountant firm. The assessee filed return of income for the AY 2016-17 declaring total income of Rs.30,43,570-. The AO while passing order u/s 143(3) of the Income Tax Act, 1961 dated 26.11.2018 assessed the total income at Rs.35,11,020/- after making an addition of Rs.4,67,450/- on account of mismatch of TDS. The assessee filed rectification application u/s 154 on 03.01.2019 against the assessment order. The AO considered and duly verified the Form 26AS and record available. The AO found that there was a total difference of TDS amounting to Rs.46,745/- between the amount of TDS of assessee and the ITS data available. Out of this amount Rs.1750/- in TDS has been due to revised TDS return. The AO vide order dated 27.05.2019, rectified the differential amount of TDS to Rs.44,995/- and assessed the total income of the assessee at Rs.34,93,520/- after addition of Rs.4,49,950/-.
Upon assessee’s appeal, the Ld. CIT(A) considered the submission of the assessee and granted part relief to the assessee as under:-
5.3.6. In view of the aforementioned factual matrix, it is an admitted fact that the appellant assessee is claiming that a part of the Gross receipts do not pertain to the relevant FY 2015-16 even through the TDS of Rs.28,598/- has been deducted in FY 2015-16, though deposited and reflected in Form 26AS as FY 2016-17. Hence, the corresponding income of TDS amount of Rs.28,598/- should be assessed in the AY 17-18 and not in AY 16-17. The Appellant thus gets relief to that extent. However, in case of TDS of Rs.18,150/- which has been deposited belatedly, yet pertains to the payments received during the relevant assessment year 2016-17, it is clear that while following the cash system of accounting, the Appellant should offer the income received in the relevant previous year for taxation and also claim TDS credit only for that corresponding to the declared income. 5.3.7. In view of the aforementioned analysis and appreciation of the facts of the case and in light of the provisions of the Act, I am of the considered view that the addition to the income of the Appellant for AY 16-17 should be restricted to Rs.1,81,500/- and the balance should be assessed in the AY 17-18. Similarly, the TDS credit granted should be restricted to Rs.13,51,954/- for the concerned AY 16-17. The balance TDS credit should be made available to the Appellant when the corresponding income is offered to tax, i.e. during AY 17-18.
Against the above order, the assessee is in appeal before the Tribunal.
We have heard both the parties and perused the records. The ld. Counsel for the assessee reiterated that the assessee had already recognized the income constituting 90% of the fee which was realized during the AY 2016-17. He claimed that only TDS component of Rs.46,748/- had not been recognized as the same was not reflecting in Form 26AS as on the date of filing of return.
Hence, the ld. Counsel for the assessee stated that this is a case of double taxation and the issue may be remitted to the file of the AO to examine the veracity of the plea of the assessee.
Per contra, the Ld. DR did not oppose the above proposition.
Accordingly, in the interest of justice, we remit this issue to the file of the AO. The AO shall examine the assessee’s claim that the assessee has already recognized the income in AY 2016-17 itself. To the extent revenue has been recognized in AY 2016-17, the assessee shall be granted relief. Needless to say that the assessee be given opportunity of being heard.
In the result, the appeal of the assessee stands allowed for statistical purpose.
Order pronounced in the open Court on 18th May, 2023.