KJP And Associates Vs D/ACIT (Delhi High Court)
New Delhi, Delhi – In a recent judgment, the Delhi High Court has ruled in favor of KJP and Associates, a registered partnership firm, directing the Assessing Officer (AO) to process the firm’s Tax Deducted at Source (TDS) credit for Assessment Year (AY) 2007-08. The court’s decision comes after the tax authorities cited the unavailability of relevant data on the TRACES portal, a common challenge faced by taxpayers seeking older tax credits. The ruling underscores the principle that taxpayers should not be penalized for systemic data limitations, particularly when substantial evidence of TDS deduction and deposit is available.
The petitioner, KJP and Associates, had filed its return of income for AY 2007-08, declaring a total income of ₹2,21,43,820. However, during the processing of the return under Section 143(1) of the Income Tax Act, 1961, the TDS credit claimed based on a Form 16A certificate issued by Freudenberg Nok Pvt. Ltd. (formerly Sigma Freudenberg NOK Pvt. Ltd.) was rejected. The petitioner only received the details of this rejection in June 2016, seven years after the initial intimation.
Following this, KJP and Associates promptly filed an application under Section 154 of the Act in June 2016 for rectification of the error, as the TDS credit had not been accounted for. Despite reminders sent in January 2018, the request remained unprocessed. The issue escalated when, in January 2020, the AO issued a notice under Section 221(1) of the Act for the recovery of a demand that had arisen solely due to the uncredited TDS.
