2024 (3) TMI 664 - AT - Income Tax

Disallowance of TDS on account of mismatch later on TDS matched but AO not given credit - assessee could get rectified TDS return and after showing in Traces the said credit the assessee made application u/s 154 to the ITO Ward 4 Udaipur owhich was rejected on the ground that rectification is more than 4 years old and it s not allowable - HELD THAT - The bench noted that the assessee is a senior citizen and retired from Dena Bank, the purpose of the bench in this appeal is to grant justice to the assessee, though the assessee s application may get filed after 4 year u/s. 154 of the Act, but the provision of section 155 of very well give powers to the ld. AO to rectify the apparent credit of taxes to be given as the assessee has taken efforts to get rectified the TDS credit which is matching with the consequential salary offered by the assessee and is supported by the form no. 16 and the online credit of taxes appearing in his account the said tax credit cannot be denied to the assessee and therefore, considering the specific facts placed before us and there is genuine tax credit denied by the ld. AO even the tax credit reflected in the form no. 16 cannot be denied which is denied and demand is raised is required to be rectified and the ld. AO is directed to pass the consequential order giving the tax credit due to the assessee as per the fresh records submitted by the assessee. In terms of these observation the appeal of the assessee is allowed.

Summary

Issues:
The issues involved in the judgment are the delay in filing the appeal due to the COVID-19 pandemic and the denial of TDS credit leading to a demand for assessment year 2008-09.

Delay in Filing Appeal:
The appeal filed by the assessee was delayed by 309 days due to the COVID-19 pandemic. The assessee, being a senior citizen, explained the reasons for the delay, attributing it to physical movement restrictions. The bench noted the pandemic situation and condoned the delay in filing the appeal.

Denial of TDS Credit:
The assessee's return of income for the assessment year 2008-09 showed a total income of Rs. 3,92,297, with tax payable at Rs. 34,701, adjusted against TDS of Rs. 36,400. However, the TDS credit was not given by the Assessing Officer (AO) initially due to a mismatch. The assessee approached the TDS deductor, and after a considerable time, the TDS was reflected in Form 26AS. Despite this, the AO rejected the rectification request, leading to the appeal.

The CIT(A) upheld the AO's decision citing the provision of section 154(7) of the IT Act, which limits the time for rectification. The assessee then appealed, providing detailed submissions regarding the TDS mismatch issue and the efforts made to rectify it, including communication with the bank and the tax department.

Upon hearing both parties, the tribunal noted the assessee's efforts to rectify the TDS credit mismatch. Despite the delay in filing the rectification request, the tribunal invoked section 155 of the Act, granting the AO powers to rectify the tax credit. The tribunal directed the AO to pass an order giving the tax credit due to the assessee based on the fresh records submitted.

Conclusion:
In conclusion, the tribunal allowed the appeal of the assessee, emphasizing the genuine efforts made to rectify the TDS credit mismatch and the entitlement to the tax credit. The tribunal's decision aimed to grant justice to the senior citizen assessee, considering the specific facts presented and the denial of genuine tax credit by the AO.

The appeal was allowed, and the order was pronounced in open court on 13.03.2024.