2003 (11) TMI 306 - AT - Income Tax

Summary

Issues: Appeal against order of Dy. CIT(A) regarding credit of TDS to the assessee.

Analysis:
The appeal before the Appellate Tribunal ITAT Jaipur involved a dispute regarding the credit of Tax Deducted at Source (TDS) given to the assessee. The assessee, an employee of LIC, received a supplementary payment without TDS deduction due to an audit objection. Subsequently, TDS was deducted from the salary for November and December 1993 and deposited by LIC in the Government exchequer. The assessee requested credit for this TDS, which was initially denied by the Assessing Officer but allowed by the Dy. CIT(A) in the first appeal.

Upon review, the Tribunal found that the mistake in not deducting TDS initially was due to an error by the employer, LIC, arising from an audit objection. The TDS was deducted and deposited after the objection was settled. It was noted that all assessments were completed by the time the TDS was deducted. The Tribunal observed that there was no malicious intent on the part of the assessee or the employer, especially considering LIC being a Government autonomous body. The error was attributed to internal processes within Government Departments related to audit objections and settlements. Importantly, it was highlighted that there was no loss to the Revenue, and the mistake was deemed technical rather than intentional.

Consequently, the Tribunal upheld the decision of the Dy. CIT(A) to allow the credit of TDS to the assessee. The appeal filed by the Department was dismissed, with the Tribunal affirming the reasoning provided by the Dy. CIT(A) in support of the decision. The judgment emphasized the absence of any fraudulent behavior and the technical nature of the error, leading to the conclusion that the credit of TDS to the assessee was justifiable in the circumstances presented.