Case Law Details
Yamaha Motor Solutions (India) Pvt. Ltd. Vs PCIT (ITAT Delhi)
TDS credit, being prepaid tax, cannot be denied when it has already been allowed in a rectification order and there is no dispute regarding mismatch or non-reporting of the corresponding income.
Issue: Whether denial of TDS credit of ₹99,54,581 in the assessment order under section 143(3) was sustainable when the same credit had already been granted by the Revenue in an order under section 154, and whether consequential interest under sections 234A and 234B could survive.
Facts: The assessee filed its return for AY 2018-19 claiming TDS credit of ₹99,54,581. Though the credit was initially denied in the intimation under section 143(1), the mistake was rectified by the Assessing Officer through an order under section 154 dated 23.09.2020 granting full credit. Subsequently, while completing assessment under section 143(3), the Assessing Officer again failed to grant the same TDS credit and levied interest under sections 234A and 234B. The CIT(A) dismissed the appeal on the ground that the issue arose from the intimation under section 143(1).
Tribunal’s Findings: The Tribunal held that the CIT(A) failed to appreciate the correct factual position. Once the mistake in the intimation under section 143(1) had already been rectified by an order under section 154, no grievance survived against the intimation. The denial in the scrutiny assessment was evidently due to the Assessing Officer overlooking his own rectification order.
The Tribunal reiterated that credit for taxes already paid by way of TDS is a vested and lawful entitlement of the assessee. Such credit cannot be denied merely because of an inadvertent omission by the Department. It was not the Revenue’s case that there was any mismatch in Form 26AS, any defect in the TDS claim, or that the related income had not been offered to tax.
Accordingly, the Tribunal directed the Assessing Officer to allow the TDS credit of ₹99,54,581. Since the tax liability stood fully covered by TDS, the consequential interest levied under sections 234A and 234B was also directed to be deleted.
Held: TDS credit already granted in a rectification order cannot be denied in a subsequent assessment order in the absence of any dispute regarding its admissibility. Consequential interest under sections 234A and 234B is also liable to be deleted.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been preferred by the assessee against order dated 20.11.2025 of the Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre, New Delhi,[hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 12.01.2021 assessment passed u/s 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
2. The assessee has raised following grounds of appeal:-
1. On the basis of facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax, (Appeal), National Faceless Appeal Centre (NFAC)-Delhi (hereinafter, referred as “CIT (A)”) under section 250 of the Income Tax Act, 1961 (hereinafter, referred as “the Act) is bad both in the eye of law and facts.
2. On the basis of facts and circumstances of the case, the learned CIT(A), has erred in law and on facts in dismissing the appeal without adjudicating the merits of the grounds raised by the Appellant, merely on the basis that the adjustments originate from the intimation passed under section 143(1) of the Act, and thereby failed to exercise appellate jurisdiction vested in him under the Act.
3. On the basis of facts and circumstances of the case, the learned CIT(A), has erred both on facts and in law in dismissing the ground relating to non-grant of TDS credit of INR 99,54,581/-, despite the fact that such TDS is duly reflected in Form 26AS and was claimed in the return of income, and without appreciating that the Assessing Officer failed to grant legitimate credit for prepaid taxes while passing the assessment order u/s 143(3) of the Act.
4. On the facts and circumstances of the case, the learned CIT(A) has erred in confirming interest levied u/s 234A of IN 33,870/- despite the fact that the Appellant had filed its return of income on 30 November 2018 vide e-filing acknowledgement number 383177831301118, under section 139(1) of the Act, being the statutory due date applicable to Appellant required to furnish Form 3CEB u/s 92E of the Act. The learned CIT(A) failed to appreciate that no delay occurred in filing the return, and accordingly no interest was leviable.
5. On the facts and circumstances of the case, the learned CIT(A) has erred in confirming interest levied u/s 234B amounting to INR5,75,790/- without appreciating that the entire tax liability was already covered by TDS credit available to the Appellant and therefore no advance tax was payable.
6. On the facts and circumstances of the case, the learned CIT(A) has erred in dismissing the appeal without dealing with the specific submissions, evidence, Form 26AS, and legal contentions placed on record, thereby rendering the appellate order non-speaking, mechanical, and unsustainable in law.
3. The only issue emanating from the above grounds of appeal raised by the assessee is regarding the non-grant of TDS credit of Rs.99,54,581/-, levy of interest of Rs.33,870/- under section 234A and Rs.5,75,790/- u/s 234B of the Act.
4. As per the brief factual matrix of the case are that the assessee had filed its Return of Income on 30.11.2018, declaring income of Rs.1,69,03,560/-. In the aforesaid Return of Income, the TDS Credit of Rs.99,54,581/- was claimed order u/s 143(1A) passed on 23.03.2020, whereby the claimed TDS Credit of Rs.99,54,581/- was not allowed. The appellant moved rectification application under section 154 of the Act, whereby an order dated 23.03.2020 was passed granting the assessee complete credit of the claimed TDS. The ld. Assessing Officer passed the order under section 143(3) of the Act on 12.01.2021 and accepted the Return of Income. In the impugned assessment order, the AO proceeded to deny the assessee its claim of credit of TDS of Rs.99,54,581/-. Aggrieved by the impugned action, the assessee moved an appeal before the ld. CIT(A). The ld. First Appellate Authority passed his order dated 20.11.2025 by dismissing the appeal of the assessee. He concluded that no addition has been made in order under section 143(3) of the Act and that the present controversy is not emanating from the said order. He also observed in para 5.4 of his order that the assessee has not brought on records any material to allude that he order under section 143(1) dated 23.03.2020 was contested. It was finally concluded that if the assessee is aggrieved by the order u/s 143(1), he ought to have moved an appeal against that the present issue cannot be contested qua the order u/s 143(3) of the Act. The ld. DR argued in favour of the order of the lower authorities.
5. We have heard rival submissions in the light of material available on record. We are of the considered view that the ld. CIT(A) has omitted to consider the controversy before him in true analysis of facts on records. Before him, the assessee has merely contested for the grant of TDS credit of Rs.99,54,581/-. We have noted that the said TDS credit was denied by the Revenue through order under section 143(1), but this mistake was rectified by the Revenue through its order under section 154 dated 23.09.2020. Thus, there cannot be a case of any grievance of the assessee qua the order u/s 143(1) of the Act. We have noted that the ld. AO while not giving credit of TDS to the assessee has possibly omitted to consider his own order under section 154 of the Act dated 2309.2020. It is trite law that a tax payers is entitled to be given credit of tax paid by it by way of TDS or advance tax or otherwise. It is rightful due of an assessee and cannot be denied even by way of inadvertent omission. It is not the case of the Revenue that denial of TDS credit is based upon any mismatch in tax credit or the TDS claim of the assessee saving from any other deficiency or shortcoming. It is also not the case of the Revenue that income corresponding to the TDS credit claim has not been offered for taxation. So being the case credit of TDS cannot be denied to the tax payer. Accordingly, we allow the grounds of appeal raised by the assessee and set-aside the orders of lower authorities and direct the ld. Assessing Officer to allow the claim of TDS of Rs.99,54,581/- as well as to delete the interest imposed under section 234A and 234B of the Act.
6. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 15th May, 2026.
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