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2022 (12) TMI 1121 - AT - Income TaxFull credit of TDS as claimed resulting into grant of short refund - whether entire receipt pertaining to TDS was duly reflected in the accounts of the assessee supported by the reconciliation submitted justifying grant of full credit? - HELD THAT - A closer scrutiny of the Ld.CIT(A) s order and Form No.26AS revealed that while the Ld.CIT(A) had noted this mismatch in Form No.26AS as on the date of processing of the return u/s 143(1) i.e. 10-12-2019 and at time of rejection of the rectification application-filed u/s 154 of the Act on 14-8-2020,the Form No.26AS filed before us by the assessee was updated form with data updated till 23-7-2021. Which means that, subsequent to the passing of the rectification order, and the order of the CIT(A) which was passed on 26-4-2021, the assessee had got its TDS data rectified ensuring that the TDS shown as not deducted on receipts from various parties in the list in para 4.4 of the CIT(A) order above, are duly reflected in the updated Form No.26AS. This fact was pointed out to assessee who fairly admitted that the TDS data must have been subsequently revised and updated. In view of rectification and updation of Form No.26AS we find that the assessee does have a case of short credit of TDS being given to it in the processing of its return filed for the year under section 143(1) of the Act. But in the interest of justice, this updated Form No.26AS filed by the assessee before us, reflecting all the TDS earlier noted as not deducted but now shown as deducted, needs to be verified by the Department and for the said purpose we restore the issue back to the AO to verify the authenticity of Form No.26AS now filed by the assessee before us, and thereafter allow credit of TDS as per law. Accordingly, grounds of appeal raised by the assessee are allowed in above terms for statistical purposes .
Issues:
1. Short credit of TDS claimed by the assessee. 2. Rejection of rectification application under section 154 of the Income Tax Act, 1961. 3. Discrepancy in TDS credits reflected in Form No.26AS. Analysis: 1. The appeal was filed against the order passed by the National Faceless Appeal Centre (NFAC) regarding the short credit of TDS for the Assessment Year 2018-19. The assessee contended that the TDS credits were duly reflected in their accounts and supported by reconciliation, justifying the grant of full credit. The CIT(A) upheld the denial of short TDS credit, stating it was not available as per the information in Form No.26AS. However, it was later revealed that the TDS data had been rectified and updated in Form No.26AS after the appeal process. The Tribunal found that the updated Form No.26AS reflected all the TDS credits, which were earlier noted as not deducted but were now shown as deducted. The Tribunal restored the issue back to the AO for verification, allowing the appeal for statistical purposes. 2. The rectification application under section 154 of the Act was rejected by the Assessing Officer (AO), leading to the appeal before the CIT(A). The CIT(A) dismissed the appeal based on the information available in Form No.26AS at the time of processing the return. However, it was later discovered that the TDS data had been rectified and updated after the rejection of the rectification application. The Tribunal directed the AO to verify the authenticity of the updated Form No.26AS and allow credit of TDS as per law, emphasizing the importance of justice in the matter. 3. The discrepancy in TDS credits reflected in Form No.26AS was a crucial issue in the case. The assessee pointed out that all the mismatched TDS credits were actually reflected in the Form No.26AS, but the discrepancy arose due to the timing of data updates. The Tribunal observed that the Form No.26AS filed by the assessee was updated with data revised till a later date, indicating that the TDS data had been rectified post the initial processing of the return. The Tribunal emphasized the need for the Department to verify the updated Form No.26AS to ensure the correct credit of TDS to the assessee, highlighting the significance of accurate and updated financial information in tax assessments. In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the importance of verifying updated financial data to ensure accurate tax assessments and the fair treatment of taxpayers.
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