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2019 (3) TMI 992 - AT - Income TaxRectification of mistake u/s 154 - debatable issue - AO withdrawing TDS credit in an order u/s 154 on the ground that corresponding income has not been offered for tax in the relevant assessment year - CIT-A confirmed AO order - HELD THAT - We are of the view that the issue is debatable and would not come within the purview of section 154 of the I.T.Act. The Delhi Bench of the Tribunal in the case of Bikramjit Ahluwalia 2017 (5) TMI 1667 - ITAT DELHI had held that when tax has been deducted and paid into the Government account, the credit of the same should be given to the assessee in the year of deduction of TDS. Similar view was held by the Visakhapatnam Bench of the Tribunal in the case of ACIT v. Peddu Srinivasa Rao 2011 (3) TMI 1495 - ITAT VISAKHAPATNAM and PARDEEP KUMAR DHIR. 2007 (4) TMI 294 - ITAT CHANDIGARH-B shows that the issue raised u/s 154 of the I.T.Act is a debatable one. For the aforesaid reasons, we are of the view that withdrawal of tax credit which was given in the assessment completed u/s 143(3) of the I.T. Act by resorting rectification proceedings u/s 154 of the I.T.Act is legally untenable and cannot be sustained. However, we make it clear that TDS which is given due credit in this assessment year, the same should not be given credit during any other assessment year when income was offered for taxation - Decided in favour of assessee.
Issues:
- Whether the credit of ?2,57,500 given in the assessment order can be withdrawn in an order passed under section 154 of the Income Tax Act on the ground that corresponding income was not offered for tax in the relevant assessment year? Analysis: 1. The appeal was filed by the assessee against the CIT(A)'s order confirming the withdrawal of TDS credit of ?2,57,500 by the Assessing Officer under section 154 of the Income Tax Act. The issue revolved around whether the credit could be withdrawn due to non-disclosure of corresponding income in the relevant assessment year. 2. The assessee, a film producer and director, had the tax credit of ?2,57,500 wrongly granted as the corresponding receipt was not declared as income during the assessment year 2008-2009. The Assessing Officer issued a notice under section 154 to rectify this mistake, which was objected to by the assessee but eventually passed the order on 09.07.2014. 3. The CIT(A) upheld the Assessing Officer's decision based on a Third Member order of the Tribunal, stating that the assessee cannot claim the tax credit if the corresponding income was not disclosed in the relevant assessment year. 4. The assessee argued before the Tribunal that the issue was debatable, citing a Delhi Bench Tribunal case where it was held that TDS credit should be given to the assessee to avoid complications. The Tribunal agreed that the issue was debatable and not suitable for rectification under section 154, referencing similar decisions by other Tribunals. 5. The Tribunal concluded that the withdrawal of the tax credit under section 154 was legally untenable and allowed the appeal. However, it specified that the TDS credit should not be claimed in any other assessment year when the income was offered for taxation. The decision was pronounced on March 15, 2019. 6. In summary, the Tribunal ruled in favor of the assessee, emphasizing that the issue of withdrawing TDS credit due to non-disclosure of corresponding income was debatable and not appropriate for rectification under section 154 of the Income Tax Act. The decision was supported by precedents from various Tribunals, ultimately allowing the appeal and directing the treatment of the TDS credit accordingly.
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