2023 (8) TMI 637 - AT - Income Tax

Denial of credit of advance tax paid by assessee - AR submitted that the assessee has filed an application before CBDT u/s 119(2)(b) for condonation of delay in claiming the advance tax credit which is pending consideration and also placed on record a copy of the challan payments of advance tax as well as relevant extracts of Form 26AS wherein the aforesaid payment is duly reflected - HELD THAT - It cannot be disputed that the claim made by the assessee was limited to the grant of credit of the aforesaid advance tax paid during the year under consideration and the same doesn t pertain to fresh claim of any allowance/deduction. It is not a case wherein the assessee sought credit of TDS which needs to be verified with documentation and correlated with the corresponding income. Section 219 of the Act also mandates that the credit of advance tax shall be given to the assessee in the regular assessment. Thus the inadvertence on the part of the assessee to claim the credit for the advance tax while filing its return of income or filing the revised return of income in this regard does not absolve the AO from its statutory duty as per section 219 of the Act to grant the credit in the regular assessment particularly when the said amount is duly reflected in Form 26AS which forms part of the record of the Revenue. AO erred in not rectifiying this apparent mistake when the same was pointed out by the assessee vide its application under section 154 of the Act. Accordingly we direct the jurisdictional AO to grant the credit of advance tax paid by the assessee during the financial year 2012-13 - Decided in favour of assessee.

Summary

Issues involved:
The denial of credit of advance tax paid by the assessee amounting to INR 1,10,00,000.

Issue 1: Denial of legitimate credit of advance tax
The assessee challenged the order denying legitimate credit of advance tax paid, arguing that it was otherwise allowable and could not be claimed in the return of income. The Appellate Tribunal found that the AO erred in not granting the credit for advance tax paid, which was duly reflected in Form 26AS. The Tribunal held that the AO's failure to rectify this mistake, despite it being pointed out by the assessee, was a breach of statutory duty under section 219 of the Income Tax Act. Consequently, the Tribunal directed the jurisdictional AO to grant the credit of advance tax amounting to INR 1,10,00,000 paid by the assessee during the financial year 2012-13. The impugned order of the CIT(A) was set aside, and the grounds raised by the assessee were allowed.

Conclusion:
The Appellate Tribunal ruled in favor of the assessee, allowing the appeal and directing the AO to grant the credit of advance tax paid. The Tribunal emphasized the statutory duty of the AO to grant such credit, especially when the amount was duly reflected in Form 26AS.