2020 (12) TMI 847 - AT - Income Tax

Application u/s 154 requesting the A.O. to give credit for above TDS and refund of the same - order rejecting the assessee s application for rectification u/s 154 assessee filed an appeal to the first appellate authority - assessee did not appear before the first appellate authority, ex parte order was passed - HELD THAT - It is the case of the assessee that it had not received the notice of hearing issued from the first appellate authority s office. Therefore, the appeal was decided ex parte. In the interest of justice and equity, we are of the view that one more opportunity should be provided to the assessee to explain its case whether it has accounted and declared the income in respect of TDS, which it is claiming refund. For the above said reasons, the case is restored to the file of the A.O. The assessee shall co-operate with the A.O. and shall furnish the necessary details called for. It is ordered accordingly.

Summary

Issues:
- Disallowance of TDS credit claimed under section 154 of the Income Tax Act, 1961

Analysis:

Issue 1: Disallowance of TDS credit
The appeal was against the CIT(A)'s order regarding the disallowance of TDS credit claimed under section 154 of the Income Tax Act, 1961 for the assessment year 2013-2014. The assessee, engaged in IT-enabled services, had filed the return of income on 01.10.2013, declaring total income of ?3,23,82,340. The assessment was completed under section 143(3) of the I.T. Act, assessing the total income at ?3,26,87,120 after disallowance of travelling expenses. The issue arose when the assessee did not claim TDS credit of ?23,87,640, as it was not available in Form No. 26AS at the time of filing the return. Subsequently, two clients remitted TDS after 30th September 2013, and the credits were available in Form No. 26AS. The assessee filed an application under section 154 of the I.T. Act requesting credit for the TDS and a refund. However, the Assessing Officer rejected the petition on the grounds that the TDS was not claimed in the return filed on 01.10.2013. The assessee then appealed to the first appellate authority, but an ex parte order was passed as the assessee did not appear. The Tribunal decided to provide the assessee with another opportunity to explain whether it had accounted for and declared the income corresponding to the TDS claimed for the refund. The case was restored to the file of the Assessing Officer for necessary actions.

In conclusion, the appeal was allowed for statistical purposes, emphasizing the importance of providing a fair opportunity for the assessee to present their case and cooperate with the authorities in furnishing the required details. The order was pronounced on October 22, 2020.