Vellala Krishnanand Arunkumar Vs ITO (ITAT Bangalore)
Form 26AS vs CPC Mismatch – TDS Credit Cannot Be Denied Without Verification- Tribunal Orders AO to Grant Proper TDS Credit
Assessee, engaged in works contract business, filed return on 28.03.2021 u/s 139(4) declaring income of ₹48.54 lakh u/s 44AD on gross receipts of ₹5.10 crore inclusive of GST. He claimed TDS credit of ₹9.39 lakh as per Form 26AS. However, CPC while processing return u/s 143(1)(a) on 30.10.2021 restricted TDS credit to ₹2.91 lakh only.
CIT(A) noted that claim of TDS was backed by Form 26AS & the receipts had also been declared in return. Relying on Delhi High Court decision in Court on its Own Motion vs CIT (352 ITR 273) & CBDT instructions, CIT(A) directed AO to verify the TDS claim with Form 26AS, receipts offered to tax & other relevant records & thereafter grant credit if found correct.
On further appeal, Tribunal held that there was no infirmity in the order of CIT(A). It observed that once TDS credit is claimed on the basis of Form 26AS & corresponding receipts are declared as income, AO is duty-bound to verify the claim & grant credit accordingly. Denial of legitimate credit merely on processing by CPC cannot be sustained. Tribunal therefore upheld the directions of CIT(A) & remanded the matter to AO to carry out verification & grant due credit. Accordingly, the appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
