Health & Happiness Private Limited Vs DCIT (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal concerned Assessment Year 2023–24 and challenged the denial of TDS credit by the Assessing Officer while processing the return under Section 143(1) of the Income Tax Act, 1961, which was upheld by the Commissioner of Income Tax (Appeals).
The assessee filed its return declaring total income of ₹3.34 crore and claimed TDS credit of ₹6.81 crore, resulting in a refund claim. During processing, the CPC noted a mismatch between gross receipts reported in Form 26AS and those declared in the return. The assessee explained that the difference arose because e-commerce operators deducted TDS on gross amounts, whereas revenue was recognized on a net basis after adjustments such as sales returns.
Despite this explanation, the Assessing Officer restricted TDS credit by ₹28.76 lakh, leading to a reduced refund. The CIT(A) upheld this adjustment.
Before the Tribunal, the assessee contended that denial of TDS credit on the basis of mismatch between Form 26AS and the return is not permissible under Section 143(1), as such adjustments fall outside the scope of prima facie adjustments allowed under that provision. It was also argued that no proper notice under Section 143(1) was issued before making the adjustment, and that Section 139(9) notice regarding defective return was unrelated to TDS credit.
