Addition for mere appearing of TDS credit in form 26AS not justified

Advocate Akhilesh Kumar Sah

These days, assessees are facing practical difficulties in respect of tallying of data reflected in Form 26AS from their own data which in many times do not tally and Assessing Officer(AO) takes adverse action due to that. The recent decision, P.K. Rajasekar vs. ITO, Non Corporate Ward 6(1), Chennai [IT Appeal No.121 (MDS.) of 2016, decided on 15/09/2016] of ITAT, Chennai is a good decision in this regard.

In the above mentioned appeal, the assessee/ appellant was engaged in the business of laying cables. During the year under consideration, the assessee received a sum of 64,85,397/- from one, Tulip Telecom P. Ltd. The assessee had offered the above said sum of 64,85,397/- for taxation. However, while filing the TDS return, Tulip Telecom P. Ltd. appeared to claim a sum of 1,26,84,856/- paid to the assessee. Out of the so-called claim of Tulip Telecom P. Ltd., a sum of 58,36,556/- given credit on 01.07.2010 was said to be, totally incorrect. When the assessee contacted the company Tulip Telecom P. Ltd., they said they will rectify the TDS return filed electronically. However, they have not rectified. Since the amount was not paid, according to the Ld. counsel, the same cannot be taken as income of the assessee. According to the Ld. counsel, a wrong entry filed by the deductor cannot be a reason to treat the same as income of the assessee.

On the contrary, the Ld. Departmental Representative, submitted that the assessee claimed that the credit of 58,36,556/- given on 01.07.2010 is a wrong entry and Tulip Telecom P. Ltd. has not filed revised TDS return so far. As per the details found in Form 26AS, the assessee received a sum of 1,23,19,906/- from Tulip Telecom P. Ltd. In view of the claim of the assessee, a letter was addressed to Tulip Telecom P. Ltd. by the AO on 6.12.2013. However, the AO not received any reply. The assessee gave another address of Tulip Telecom Pvt. Ltd. at Bangalore. The AO also addressed a letter to Bangalore address. Inspite of that, no reply was received from Tulip Telecom P. Ltd. Since Tulip Telecom P. Ltd. could not be contacted, according to the Ld. D.R., the AO had no other alternative except to take the particulars contained in Form 26AS as correct. Therefore, according to the Ld. D.R., the CIT(Appeals) rightly confirmed the order of the AO.

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