2025 (3) TMI 1362 - AT - Income Tax

Not allowing credit for TDS as claimed in the return of income and as per 26AS - HELD THAT - We find that AO/CPC in his 143(1) intimation has specifically mentioned that following are the details of unmatched tax deducted at source and with this remark the AO/CPC has also provided the names of all the four contractors who have reimbursed the amount to the assessee towards harvesting and transportation charges and deducted TDS thereon. From perusal of the above remark it is very much clear that the AO/CPC has specifically mentioned the reason for not allowing the credit of TDS to the assessee and therefore the ground no.3 raised by the assessee in this regard fails and the contention of the assessee that the AO/CPC has not provided any reasons for not allowing TDS claim proves to be wrong. Assessee has produced Form 26AS downloaded on 18th June 2020 wherein all the TDS entries are appearing. We deem it appropriate to set-aside the order passed by Ld. Addl./JCIT(A)-1 Coimbatore and remand the matter back to him with a direction to decide the appeal afresh as per fact and law after considering the orders passed by the AO for earlier assessment years starting from assessment years 2009-10 to 2014-15 and for assessment year 2016-17 wherein the claim of the assessee was accepted and refunds were also issued after making certain adjustments. The assessee is also hereby directed to respond to the notices issued by Ld. Addl./JCIT(A)-1 Coimbatore and furnish requisite details if any further required by Addl./JCIT(A)-1 Coimbatore and also to produce supporting documents/additional evidence in support of grounds of appeal without taking any adjournment under any pretext otherwise Addl./JCIT(A)-1 Coimbatore shall be at liberty to pass appropriate order as per law. Appeal filed by the assessee is partly allowed for statistical purposes.

ISSUES PRESENTED and CONSIDERED

The primary issues considered in this legal judgment are:

1. Whether the Assessing Officer (AO) or the Centralized Processing Center (CPC) erred in not allowing the credit for Tax Deducted at Source (TDS) amounting to Rs. 1,18,77,593/- as claimed by the assessee in the return of income and reflected in Form 26AS.

2. Whether the interest under Section 244A on the refund was improperly denied by the AO.

3. Whether the AO/CPC failed to provide adequate reasons for not allowing the TDS claim of Rs. 1,18,77,593/-.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: TDS Credit Denial

Relevant Legal Framework and Precedents: The Income Tax Act, specifically Section 194C, governs the deduction of tax at source for certain payments. The credit for TDS is typically allowed based on the entries in Form 26AS, which reflects the TDS deducted and deposited with the government.

Court's Interpretation and Reasoning: The Tribunal found that the assessee trust acted merely as an intermediary between Mula Sahakari Sakhar Karkhana and the Harvesting & Transportation (H&T) contractors. The reimbursements received from Mula Sahakari Sakhar Karkhana matched the payments made to the contractors, and the trust's income was limited to administrative charges. The Tribunal noted that in previous assessment years, the Department had accepted the similar modus operandi and allowed the TDS claims.

Key Evidence and Findings: The assessee provided assessment orders from previous years where similar TDS claims were accepted. The Tribunal observed that the modus operandi and facts remained consistent across the years.

Application of Law to Facts: Given the consistency in the assessee's activities and the Department's prior acceptance of the TDS claims, the Tribunal found no justification for a different treatment in the assessment year 2018-19.

Treatment of Competing Arguments: The Revenue argued for the confirmation of the subordinate authorities' orders, but the Tribunal found the lack of change in facts and practices significant enough to warrant reconsideration.

Conclusions: The Tribunal directed the case to be remanded back to the Ld. Addl./JCIT(A)-1, Coimbatore, for a fresh decision considering the parity with earlier assessments.

Issue 2: Interest under Section 244A

This issue was not specifically addressed in the Tribunal's detailed analysis, as the primary focus was on the TDS credit. The Tribunal's decision to remand the case for reconsideration implicitly includes a review of all related claims, including interest on refunds.

Issue 3: Lack of Reasons for TDS Denial

Court's Interpretation and Reasoning: The Tribunal noted that the AO/CPC had mentioned "unmatched tax deducted at source" as the reason for denying the TDS credit and provided the names of contractors involved. The Tribunal found this explanation sufficient to negate the assessee's claim of no reasons being provided.

Conclusions: The Tribunal concluded that the AO/CPC had indeed provided reasons for the denial of TDS credit, although the Tribunal found the overall decision to deny the credit unjustified based on historical consistency.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "In such kind of situation, we are of the considered opinion that the Department cannot take different view in respect of only one assessment year i.e., for the assessment year 2018-19 when there is no change in activity of the assessee trust."

Core Principles Established: The principle of consistency in tax assessments was emphasized, indicating that similar facts and practices across assessment years should lead to similar treatment unless substantive changes occur.

Final Determinations on Each Issue: The Tribunal partially allowed the appeal for statistical purposes, remanding the case back to the Ld. Addl./JCIT(A)-1, Coimbatore, for a fresh decision in line with past assessments and after considering additional evidence and submissions from the assessee.

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