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2024 (4) TMI 1077 - AT - Income TaxCredit of TDS - Disallowance of credit as it is not getting reflected in the appellant-assessee s 26AS - assessee rectification application u/s 154 rejected - HELD THAT - We find that there is a genuine hardship to the appellant-assessee in not getting the credit of the TDS particularly when the appellant-assessee cannot file the return of income for the AY 2011-12 claiming the credit of TDS because the assessee was not in existence in the AY 2011-12. Technically the AO is not able to give credit of the TDS in the AY 2012-13 as the same is not getting reflected in the assessee s 26AS. Theoretically the AO appears justified in not allowing credit of TDS in AY 2012- 13 but a way out has to be worked out by the AO to address the genuine hardship of the appellant-assessee and allow credit of TDS in the AY 2012-13 after verifying the facts of the case and by resorting to the provision of Section 119 of the Act if the appellant-assessee files application u/s Section 119(2)(b) of the Act to get address its grievance as per the law. Appeal of the assessee is allowed for statistical purposes
Issues involved: Non-allowance of credit of Tax Deducted at Source (TDS) u/s 143(1) of the Income Tax Act, 1961 for the relevant assessment year.
Summary: Issue 1: Non-allowance of TDS credit The appeal was against the order of the Commissioner of Income Tax (Appeals) regarding the non-allowance of TDS credit of Rs. 9,54,132/- in the relevant assessment year, despite the corresponding income being assessed. The Assessing Officer (AO) did not allow the TDS credit as it was not reflected in the assessee's 26AS statement. The appellant filed a rectification application which was rejected by the AO. The appellant argued that the deductor had wrongly shown the TDS amount in a different assessment year, leading to non-reflection in 26AS. The appellant requested the deductor to revise the TDS statement, but no action was taken. Issue 2: Arguments The appellant's representative argued that the TDS amount was not reflected in 26AS due to the deductor's error in submission. Supporting documents were provided to show the credit/reflection of the TDS amount in the bank account ledger. The appellant faced genuine hardship in not receiving the TDS credit, as it could not file a return for the year when the TDS was deducted since the business was not operational then. Issue 3: Decision After hearing both parties, the Tribunal acknowledged the genuine hardship faced by the appellant in not receiving the TDS credit. While technically the AO was justified in not allowing the credit due to non-reflection in 26AS, a solution had to be found. The Tribunal directed the AO to verify the facts and, if necessary, use Section 119 of the Act to address the appellant's grievance and allow the TDS credit for the relevant assessment year. The appeal was allowed for statistical purposes. This summary provides a detailed overview of the issues involved in the legal judgment, the arguments presented by both parties, and the decision rendered by the Tribunal.
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