ACIT Vs Gateway Terminals India Pvt. Ltd. (ITAT Pune)
ITAT Pune order on Whether, while processing the return of income u/s 143(1) of the ITA, 1961, CPC was justified in restricting the credit of TDS claimed by the assessee, despite the TDS being duly reflected in Form 26AS, and whether such restriction is permissible in light of section 199 read with Rule 37BA, which governs the grant and timing of TDS credit.
Summary: In this decision, the Pune Bench of the Income Tax Appellate Tribunal Pune upheld appellate relief granted to an assessee whose TDS credit was curtailed during CPC processing under Section 143(1). The CPC restricted TDS credit on the assumption that receipts reflected in Form 26AS exceeded revenues reported in the return and financials. On appeal, the first appellate authority found the restriction erroneous and directed the Assessing Officer to allow full TDS credit as per Form 26AS, subject to verification under Section 199 read with Rule 37BA to ensure proper linkage of income and tax deducted. The Revenue challenged this relief, alleging reliance on additional evidence and mismatch between revenue offered and TDS claimed. The Tribunal noted that the appellate authority had merely remanded the matter for verification before allowing credit, leaving no prejudice to the Revenue. Consequently, the Tribunal dismissed all Revenue appeals for AYs 2021-22 to 2023-24 and also dismissed the assessee’s cross objections as not pressed.
