2025 (2) TMI 1069 - AT - Income Tax

Not giving the TDS credit as per 26AS statement - As per CIT(A) AO is directed to allow the credit of the prepaid taxes after due verification of the Form 26AS as per the provisions section 199 - HELD THAT - We do not see any infirmity in the impugned order. The tax-payer should not be subjected to harassment merely on the basis of some mistake occurred due to technical glitch of software. Undisputedly in this case the assessee had not claimed credit of tax in its Income Tax Return. As per the assessee the assessee had deducted tax during the year amounting to Rs. 1, 32, 68, 202/- but due to technical glitches TDS deducted to the tune of Rs. 52, 95, 646/- was only updated by the software in the return of income. Therefore the assessee had made an application for seeking rectification of mistake. Undisputedly it is not the case of the revenue that the tax deducted as per Form No. 26AS was only Rs. 52, 95, 646/- as uploaded by the assessee. It is incumbent upon the assessing authority to ensure that the credit of tax deducted at source has been given as per Form No. 26AS. AO has not brought any materials to rebut this fact. Even otherwise also it is not the case of AO that tax so deducted was not deposited in government account. It is apparently a mistake that could not have been the basis of denial of credit of tax under the facts and circumstances of the present case. Thus looking to the material placed before us and the finding of the Ld. CIT(A) we are of the view that the Ld. CIT(A) was justified in directing the Assessing Officer to give credit to the tax deducted at source. Therefore we do not see any reason to interfere in the finding of the Ld. CIT(A). The grounds of appeal of the Revenue are hereby dismissed. Non-payment of interest on the refund due - Undisputedly the assessee himself had not claimed credit of taxes in the return of income. The case of the assessee is that due to the technical glitches entire claim could not be uploaded in the return of income. Under these facts we do not see any fault on the part of the assessing authority for not granting refund along with interest thereon. Moreover no material has been placed before us that any effort was made by the assessee for bringing to the notice of the assessing authority about the technical glitches. Grounds raised by the assessee in cross objection are hereby rejected.

Summary

The judgment by the Appellate Tribunal concerns an appeal and cross-objection by both the Revenue and the Assessee against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC) for the assessment year 2020-21. The core issues revolve around the denial of TDS credit to the Assessee, the subsequent appeal process, and the question of interest on the refund amount.The Assessee, aggrieved by the assessing authority's failure to credit the entire TDS amount reflected in Form 26AS, filed applications for rectification of mistake under section 154 of the Income Tax Act, 1961, and under section 119(2)(b) of the Act. The Commissioner of Income Tax (Appeals) allowed the appeal for statistical purposes, directing the Assessing Officer to give credit for the prepaid taxes.The Revenue contended that the Commissioner should not have entertained the Assessee's appeal, while the Assessee argued that the appeal related to proceedings under section 154 of the Act, justifying the Commissioner's actions.The Tribunal upheld the Commissioner's decision, emphasizing that taxpayers should not face harassment due to technical glitches. Citing the Supreme Court's observations in a related case, the Tribunal highlighted the importance of diligent tax collection and prompt refunds of excess levies. The Tribunal found that the Assessee had not claimed credit for the tax deducted, leading to a discrepancy in the return of income due to technical issues. The Tribunal concluded that the Commissioner was justified in directing the Assessing Officer to give credit for the TDS.Regarding the cross-objection by the Assessee seeking interest on the refund amount, the Tribunal noted that the Assessee's failure to claim credit in the return of income was a key factor. As the Assessee did not inform the assessing authority about the technical glitches, the Tribunal rejected the cross-objection for interest on the refund.In summary, the Tribunal dismissed the Revenue's appeal and the Assessee's cross-objection, affirming the Commissioner's decision to grant TDS credit to the Assessee and denying interest on the refund amount due to the Assessee's failure to claim credit and communicate technical issues to the assessing authority.