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2022 (11) TMI 1208 - AT - Income TaxRectification of mistake u/s 154 - Credit for TDS deducted on sale of property - short TDS relates to sale of a property by the Assessee, being residential apartment - Correct AY - assessee claimed the TDS in the AY 2016-17 relevant to FY 2015-16 in which the transaction took place - HELD THAT - TDS has been deducted and deposited, however, the credit originally appeared in the AY 2016-17 and later shifted to AY 2014-15. The Deductor has not corrected the TDS returns submitted by him, which could have been done and should have been done by the AO or the matter should have been referred to Jurisdictional AO to call the Deductor and direct him to correct the TDS return. CIT(A) has not considered the detailed submissions of the Assessee wherein it was clearly established that amount of TDS has been deducted, wrongly shifted to AY 2014-15, when the transaction related to sale of property made in FY 2015-16 (AY 2016-17). The entire payment was received in the FY 201516 and the TDS was deducted as well in FY 2015- 16, and the Deductor deposited the TDS in that year. Challan counterfoil dated 14.12.2015 issued by the bank also shows that the TDS deposited is for AY 2016-17. TDS return in Form 26QB as downloaded also shows that the return is for the AY 2016-17 (FY 2015-16) however the date of payment and date of deduction are erroneously and wrongly mentioned as 01.06.2013 instead of 10.12.2015, the date of transaction on which the payments were made by the Deductor through RTGS on the same day i.e. 10.12.2015 and the sale deed also registered on the said same date that is 10.12.2015. Assessee continued to follow up with the deductor of tax to submit correction statement for correcting the year of the TDS for due appearing in the relevant and applicable Assessment Year, i.e. 2016-17. Due to continuous persuasion the deductor, Shri Umesh Khaturia, the rectification was done and the same now appears for the AY 2016-17. Copy of the Form 26AS showing the above TDS of Rs. 231500/- for the year 2016-17 is attached in the Paper Book. In the meanwhile pending hearing in the present appeal, the Assessee submitted an application dated 15.02.2022 as per the Ack. No. 213052110255 dated 16.02.2022 to the Jurisdictional Assessing Officer. Till now, no action has been taken for giving credit by Assessing Officer. Form 26AS downloaded on 14.02.2022 that the due credit for Rs. 2,31,500/- is appearing therein. The application for rectification as mention above in this para is dated 12.03.2022 and the order of rejection is also same i.e. on 12.03.2022, when the credit was available on the said date as evidenced from the Form 26AS downloaded on 14.02.2022. A Grievance was lodged in regard to the above rejection of rectification as per Ack. No. 7674856 on 22.08.2022 which has not been resolved and is pending. From the entire sequence of events mentioned above, it is clear that the assessee is eligible for credit and refund - Hence, the AO is hereby directed to give credit of the TDS deducted and issue the refund of same to the assessee within 90 days from the receipt of this order. The ld. Jurisdictional PCIT shall monitor the issue of refund and see that the grievance of the assessee is redressed. Appeal of the assessee is allowed.
Issues:
- Disallowance of TDS credit by the Assessing Officer - Rectification requests and subsequent rejections - Correct assessment year for TDS credit - Failure to correct TDS returns by the Deductor Analysis: The appeal was filed against an order disallowing Tax Deducted at Source (TDS) credit of Rs. 2,31,500 on the sale of a property. The assessee, a salaried individual, had correctly claimed the TDS in the assessment year (AY) 2016-17, relevant to the financial year (FY) 2015-16 when the transaction occurred. Despite multiple rectification requests, the credit was not allowed, leading to the appeal. The Tribunal noted that the transaction took place in FY 2015-16, and the TDS was deducted and deposited in the same year. The credit initially appeared in AY 2016-17 but was later shifted to AY 2014-15 due to an error by the Deductor. The assessee diligently pursued correction, resulting in the TDS now reflecting in AY 2016-17. The Tribunal emphasized that TDS credit should align with the year of the transaction or income return, supporting the assessee's claim for the credit in AY 2016-17. Despite the clear evidence of TDS deduction and deposit for AY 2016-17, both the Assessing Officer and the Commissioner of Income Tax (Appeals) failed to acknowledge the correct assessment year for the credit. The Tribunal highlighted the importance of correcting TDS returns by the Deductor or through jurisdictional intervention to rectify such errors, ensuring proper credit allocation. In light of the continuous efforts by the assessee to rectify the TDS credit issue and the evident eligibility for the credit and refund, the Tribunal directed the Assessing Officer to provide the credit of Rs. 2,31,500 and issue the refund within 90 days. Additionally, the Jurisdictional Principal Commissioner of Income Tax was tasked with monitoring the refund process to address the assessee's grievance effectively. Ultimately, the Tribunal allowed the appeal, emphasizing the rightful entitlement of the assessee to the TDS credit and refund, highlighting the need for accurate credit allocation and timely rectifications in tax matters.
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