2011 (8) TMI 1364 - AT - Income Tax

Summary

Issues Involved:
1. Whether the CIT(A) was correct in directing the AO to allow TDS credit of Rs. 31,47,636 instead of Rs. 16,67,367.
2. Whether the AO's rejection of the assessee's application u/s 154 was justified.
3. Whether the assessee was required to file a revised return to claim the excess TDS.

Summary:

1. TDS Credit Allowance:
The CIT(A) directed the AO to allow TDS credit of Rs. 31,47,636 as against Rs. 16,67,367 allowed by the AO. The assessee had filed TDS certificates totaling Rs. 31,47,636 along with the return, but due to inadvertence, only Rs. 16,67,134 was claimed. The AO allowed only the claimed amount, leading to a shortfall in TDS credit.

2. Application u/s 154:
The AO rejected the assessee's application u/s 154, stating no mistake apparent from the record. However, the CIT(A) found that the AO failed to consider the TDS certificates and audited P&L account filed with the return, which clearly showed the correct TDS amount. The Tribunal held that the AO should have adjusted the entire TDS of Rs. 31,47,636 as per the statutory requirement of s. 143(1).

3. Requirement of Revised Return:
The Department argued that the assessee should have filed a revised return to claim the excess TDS. The Tribunal, however, found no merit in this argument, stating that the TDS certificates and audited P&L account filed with the return were sufficient to establish the correct TDS amount. The Tribunal emphasized that the AO was duty-bound to amend the intimation under s. 155(14) if the TDS certificates were subsequently produced, which was not the case here as they were filed along with the return.

Conclusion:
The Tribunal confirmed the CIT(A)'s order, directing the AO to allow the full TDS credit of Rs. 31,47,636 and grant consequential refund. The Department's appeal was dismissed, finding no error in the CIT(A)'s decision.