2020 (7) TMI 711 - AT - Income Tax

Non-grant of TCS credit - Rectification of mistak u/s 154 - Amount of TCS was not reflected (shown) in the name of assessee, but corresponding income declared by the assessee - HELD THAT - In the return of income, though the assessee has claimed TCS, however, in absence of reflection of the TCS in the name of the assessee in Form No. 26AS, while processing the return of income, the credit of TCS has not been granted to the assessee. During the rectification proceedings, the assessee has submitted before AO that though TCS has been collected in the name of Shri Bheru Singh Tak, the corresponding revenues have been offered by the assessee in his return of income - also not disputed the said fact that revenues have been offered by the assessee in his return of income but at the same time, has rejected the said claim stating that TCS was deducted in the name of Shri Bheru Singh Tak having different PAN and therefore, the credit of the same cannot be allowed to the assessee. It is a settled legal proposition that the TCS is a form of advance payment on behalf of the assessee and where the assessee has offered the income in particular assessment year and the income has been brought to tax in the hands of the assessee, the corresponding TCS should be allowed to the assessee. Therefore, in the instant case, where there is no dispute that the income has been offered by the assessee and brought to tax, the assessee should be eligible for corresponding TCS subject to the fact that the same has not been claimed by Shri Bheru Singh Tak. See M/s Jai Ambey Wines vs ACIT, CPC 2017 (1) TMI 986 - ITAT JAIPUR . We accordingly agree with the contention of the ld AR that where complete purchase and sale of main licensee have been considered in case of sub-licensee, i.e the assessee, the credit for TCS should also be granted to the assessee subject to the condition that no claim of such TCS have been made by the main licensee in his individual return of income. TCS credit to be allowed, subject to verification of facts. - Matter remanded back.

Summary

Issues:
Appeal against non-grant of TCS credit of ?2,28,713 in proceedings u/s 154 for Assessment Year 2013-14.

Analysis:
The appeal was filed challenging the non-grant of TCS credit of ?2,28,713 in proceedings u/s 154 for Assessment Year 2013-14. Initially, the matter was disposed of, but upon the assessee's application, the order was recalled for fresh adjudication. The facts revealed that the assessee's TCS was collected in the name of another party, Shri Bheru Singh Tak, with a different PAN. The Assessing Officer dismissed the rectification application under Rule 37BA. The CIT(A) upheld this decision, stating that the conditions under Rule 37BA(2) were not fulfilled by the deductee. The assessee contended that as per an agreement with Shri Bhairu Singh, he was not claiming any TCS in his personal tax return. The assessee argued for TCS credit based on similar cases where the matter was remanded for verification. The Department argued that the conditions under Rule 37BA(2) were not met by the assessee and distinguished the relied-upon cases due to lack of declarations by the main licensee regarding TCS claims.

During the proceedings, it was established that though TCS was collected in the name of Shri Bheru Singh Tak, the corresponding income was offered by the assessee and taxed. The Tribunal noted that TCS is an advance payment on behalf of the assessee and should be allowed if the income has been offered and taxed. Referring to similar cases, the Tribunal emphasized that TCS credit should go to the person assessed to tax, irrespective of the deductee. The Tribunal agreed with the assessee's argument that TCS credit should be granted, subject to the main licensee not claiming it. The matter was remanded to the Assessing Officer to verify if TCS was claimed by Shri Bheru Singh Tak and to allow the TCS corresponding to the income declared by the assessee.

In conclusion, the appeal was disposed of with directions to grant TCS credit to the assessee if not claimed by Shri Bheru Singh Tak, based on the income declared by the assessee in the return of income for the relevant assessment year.