2023 (6) TMI 387 - AT - Income Tax

Appealable orders before Commissioner (Appeals) - Non-granting of TDS credit in order passed u/s 143 (1) - HELD THAT - Appeal before CIT(Appeals) lies against the intimation issued under section 143(1) of the Act, wherein adjustments have been made in the said intimation, which have a bearing on the amount of tax determined . Accordingly, in our considered view, CIT(Appeals) has taken a very restrictive view of the provisions of section 246A of the Act, and accordingly, the matter is being set aside to the file of Ld. CIT(Appeals) to hear the appeal of the assessee on merits, after giving due opportunity of hearing to the assessee, in accordance with law. As in DEERE AND COMPANY C/O JOHN DEERE INDIA PRIVATE LIMITED 2021 (11) TMI 503 - ITAT PUNE ITAT held that any order passed under the Act against the assessee, impliedly including an order u/s 139(9) in the circumstances as are obtaining in this case, having the effect of creating liability under the Act which he denies or jeopardizing refund, gets covered within the ambit of clause (a) of section 246A(1). Therefore, even otherwise, appeal lies before the Ld. CIT(Appeals) against the adjustments to the TDS credit made by the AO u/s 143 (1) of the Act, in view of the observations made by the ITAT in the aforesaid order. - Decided in favour of assessee.

Summary

Issues involved:
The appeal against the order passed by Ld. CIT(Appeals) regarding the denial of TDS credit brought forward from earlier assessment years for the Assessment Year 2019-20.

Summary:

Issue 1: Denial of TDS credit by Ld. CIT(Appeals)
The Assessee filed an appeal against the order passed by Ld. CIT(Appeals) at the National Faceless Appeal Centre in Delhi, challenging the denial of TDS credit of Rs. 13,04,500 brought forward from earlier assessment years for the Assessment Year 2019-20. The Assessee argued that the TDS amount was deducted in earlier years but related to the income of the current assessment year. However, Ld. CIT(Appeals) dismissed the appeal stating that no adjustment had been made in the intimation under section 143(1) of the Act, and thus, the appeal did not fall under the mandate provided by the relevant section. The Assessee contended that the denial of the claim was erroneous both factually and legally.

Issue 2: Interpretation of Section 246A of the Act
The ITAT observed that according to Section 246A, an appeal against an order passed under section 143(1) of the Act lies before CIT(Appeals) when the assessee objects to the making of adjustments to the income assessed or the amount of tax determined. The ITAT disagreed with Ld. CIT(Appeals)' restrictive interpretation of the provisions of Section 246A, stating that the appeal lies against the intimation issued under section 143(1) where adjustments have been made affecting the amount of tax determined. The ITAT set aside the matter to the file of Ld. CIT(Appeals) for a fresh hearing on the merits, providing the Assessee with a fair opportunity.

Separate Judgment by ITAT Ahmedabad:
In a separate judgment, the ITAT referred to a ruling by the Pune ITAT in the case of Deere & Company, stating that any order passed under the Act against the assessee, including an order under section 139(9) creating liability or jeopardizing refund, falls within the ambit of clause (a) of section 246A(1). The ITAT held that even in cases where the Assessing Officer treated the return as invalid under section 139(9), appeal lies before CIT(Appeals) as it affects the liability under the Act. Therefore, the ITAT allowed the appeal of the Assessee, emphasizing the broader interpretation of appealable orders under the Act.

This Order was pronounced in Open Court on 26/05/2023.