2022 (12) TMI 632 - AT - Income Tax

Non-grant of TDS credit - assessee is an individual having residential status of Not Ordinarily Resident - HELD THAT - TDS credit for the aforesaid amounts was not granted to the assessee on the allegation that the credits claimed in the return of income are not reflected in Form 26AS statement. However, on a perusal of Form 26AS statement submitted before us, it is observed, the amount being the TDS deducted by Employees Provident Fund organization is reflected in From 26AS. Similarly, TDS deducted by the employer M/s. Yaskawa India Pvt. Ltd. is also reflected in Form 26AS with TAN number. Thus, the allegation of the CPC that these two amounts are not reflected in Form 26AS, prima facie , appears to be perfunctory. In any case of the matter, since, tax has been deducted at source on the income of the assessee, full credit of such TDS has to be given to the assessee in spite of the fact that the assessee might have committed some technical/typographical error in the return of income, as alleged by Commissioner (Appeals). This is for the reason that the assessee cannot be deprived of getting the benefit of tax genuinely deducted on his behalf. We restore the issue to the Assessing Officer for the limited purpose of factually verifying assessee s claim qua the amounts reflected in Form 26AS and allow credit for the TDS amount reflected therein. Grounds are allowed for statistical purposes.

Summary

Issues:
Non-grant of TDS credit.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) regarding the non-grant of TDS credit for the assessment year 2018-19. The appellant, an individual with the status of "Not Ordinarily Resident," is a salaried employee of M/s. Yaskawa India Pvt. Ltd. The appellant filed a return of income claiming credit for TDS amounting to Rs. 42,21,551. However, the Centralized Processing Centre (CPC) did not grant credit for TDS amounting to Rs. 3,48,701, citing a mismatch with Form 26AS. The appellant's appeal before the Commissioner (Appeals) was not entertained, leading to the current appeal before the ITAT Delhi.

Upon considering the submissions and evidence, the ITAT Delhi noted that the CPC disallowed TDS credits for specific amounts, alleging that they were not reflected in Form 26AS. However, upon reviewing the Form 26AS submitted, it was evident that the TDS amounts were indeed reflected in the statement. The ITAT Delhi observed that the CPC's allegation appeared to be unfounded. The ITAT emphasized that the appellant should receive full credit for TDS deducted, despite any technical errors in the return of income. It was highlighted that the appellant should not be deprived of the benefit of legitimately deducted tax.

Consequently, the ITAT Delhi decided to remand the issue to the Assessing Officer for verifying the appellant's claim regarding the amounts reflected in Form 26AS and directed to allow credit for the TDS amounts reflected therein. The grounds were allowed for statistical purposes, and the appeal was allowed for the same purpose. The order was pronounced on 31st October 2022.