Amardeep Sandhu Vs ITO (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, has ordered the Income Tax Department to refund ₹37,88,470 to a Canadian non-resident, Amardeep Sandhu, within one month. The dispute arose from an incorrect adjustment made by the Central Processing Centre (CPC), Bengaluru, which resulted in a short grant of tax deducted at source (TDS) credit on the sale of a property.
Sandhu, a non-resident Indian, sold a house in Chandigarh for ₹4,65,00,000. The buyer, as per Indian tax laws, deducted 26% of the sale price, amounting to ₹1,20,90,000, as TDS. Sandhu filed an income tax return for the assessment year 2023-24, declaring a long-term capital gain and seeking a refund of ₹37,88,470.
However, the CPC, in its processing of the return under Section 143(1), only granted a partial TDS credit of ₹63,26,743, instead of the full ₹1,20,90,000. The CPC’s decision was based on a presumption that part of the income was assessable in the hands of another person, citing Rule 37BA(2)(i). This led to a tax demand of ₹29,94,960 being raised against Sandhu. The assessee’s annual tax statement (Form 26AS) and income tax return, however, correctly reported the total TDS and sale amount. The discrepancy appeared to be due to a misleading entry in the Taxpayer Information Summary (TIS), which showed the property being sold twice for different values.
