2024 (2) TMI 1147 - AT - Income Tax

Disallowing credit of TDS - TDS credit is not reflected in Form 26AS - whether the credit claimed is allowable u/s 199? - HELD THAT - In the case of Bhura Mal Raj Mal 1996 (4) TMI 114 - RAJASTHAN HIGH COURT the High Court held that the credit for tax deducted at source should not be denied on the ground that the assessment year of the payer in which the deduction is made is different from that of the recipient. In the case of Anup Rajendra Tapadia 2023 (3) TMI 35 - ITAT PUNE ITAT held that in terms of Rule 37BA(3)(i), benefit of TDS is to be given for assessment year for which corresponding income is assessable, therefore, where assessee received rental income on 31.03.2020, benefit of TDS had to be allowed in Assessment Year 2020-21 even though tenant inadvertently reported same in AY 2021-22. Thus we are of the considered view that in case the assessee has not claimed double deduction of credit of TDS, then the assessee is entitled to claim deduction of TDS in the year in which the corresponding income has been offered to tax by the assessee and the assessee has raised invoices on the payer. In the instant case, the assessee s contention is that both the services as well as invoices have been raised on the payer in the impugned assessment year i.e. A.Y. 2020-21 and further, the assessee has not claimed deduction of TDS in any prior assessment year as well. Accordingly, matter is being restored to the file of AO with a view to verify whether the assessee has claimed TDS of the aforesaid amount in any other assessment year and accordingly, relief may be granted to the assessee as per law. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues involved:
The appeal against disallowance of TDS credit; Condonation of delay in filing appeal; Allowability of TDS credit in the relevant assessment year.

Condonation of delay in filing appeal:
The appeal was time-barred by 189 days. The assessee cited lack of awareness of legal remedies against denial of TDS credit as the reason for the delay. The Tribunal found a bona fide mistake on the part of the assessee and granted condonation of delay, considering it a fit case in the interest of justice. The appeal was condoned on merits as the assessee had a strong case.

Allowability of TDS credit in the relevant assessment year:
The assessee's appeal was against the disallowance of TDS credit of Rs. 14,38,505/- as it was not reflecting in Form 26AS. The assessee contended that the TDS amount was not claimed in the previous assessment year as the services were rendered and invoices were raised in the relevant assessment year. The CIT(A) dismissed the appeal, stating that TDS not reflecting in Form 26AS justified the disallowance. However, the Tribunal allowed the appeal, considering judicial precedents and the fact that the income was offered to tax in the relevant assessment year and invoices were raised then. The matter was remanded to the Assessing Officer to verify if double deduction of TDS was claimed in any other assessment year.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, emphasizing that TDS credit should be allowed in the year when the corresponding income is assessed and invoices are raised. The matter was remanded to the Assessing Officer for further verification.