2022 (6) TMI 1318 - AT - Income Tax

Disallowing credit of TDS deducted by the employer but not deposited to Government Account - HELD THAT - We find that the assessee filed an appeal before CIT(A) on 28.06.2018. The appeal of the assessee was transferred to NFAC in term of notification of CBDT dated 25.09.2020. The ld. CIT(A)/NFAC passed the order on 08/09/2021. CIT(A)/NFAC passed its order on the basis of details of intimation U/s 143(1) of the Act and the statement of fact was pleaded by assessee in Form 35 (the appeal filed the ld. CIT(A)/NFAC). Before us, assessee has furnished a copy of Form 26-AS for the financial year under consideration. On perusal of copy of entry in Form 26AS, we find that there are certain tax credit shown in Form 26AS, therefore, we restore the case to the file of Assessing Officer/CPC to verify the facts and grant the credit/set off of tax shown in Form 26AS and passed the speaking order in accordance with law. AO is directed to grant reasonable opportunity to the assessee before passing the order. The assessee is also directed to provide all necessary information and evidence including the copy of Form-26AS to the AO. The AO is also directed to consider the decision of Kartik Vijaysinh Soanvane 2021 (11) TMI 682 - GUJARAT HIGH COURT and pass the order in accordance with law. In the result, the ground of appeal raised by the assessee is allowed for statistical purposes. In the result, the appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
1. Assessment year 2016-17: Credit of TDS not deposited to Government Account.
2. Assessment year 2017-18: Credit of TDS not deposited to Government Account.

Assessment Year 2016-17:
The assessee appealed against the order of the ld. CIT(A)/ National Faceless Appeal Centre (NFAC) for the assessment year 2016-17. The issue revolved around the credit of TDS deducted by the employer but not deposited to the Government Account. The assessee contended that the employer, ABG Shipyard Ltd., had deducted tax at source, but the TDS returns were not filed, resulting in a demand raised by the CPC/AO. The ld. CIT(A)/NFAC dismissed the appeal, stating that the TDS was not reflected in Form 26AS due to non-remittance to the government account. However, the assessee argued for the credit of TDS based on similar cases and a decision by the Jurisdictional High Court. The Tribunal directed the AO to verify the facts, grant the credit/set off of tax shown in Form 26AS, and consider the decision of the High Court. The appeal was allowed for statistical purposes.

Assessment Year 2017-18:
For the assessment year 2017-18, the assessee raised a similar issue regarding the credit of TDS deducted but not deposited to the Government Account. The facts were akin to the previous assessment year, with the only variation being the amount in question. The Tribunal, considering the similarity in facts and circumstances, applied the findings from the earlier assessment year's case. Consequently, the appeal for the assessment year 2017-18 was also allowed for statistical purposes.

In both cases, the Tribunal emphasized the importance of verifying the details in Form 26AS, granting the credit/set off of tax accordingly, and considering relevant legal precedents. The decisions highlighted the significance of ensuring proper credit for TDS deductions made by the employer, even if not deposited to the government account. The appeals were allowed for statistical purposes, providing relief to the assessee based on the specific circumstances and legal considerations presented during the proceedings.