Bhandari Bros Vs ITO (ITAT Jaipur)
The ITAT Jaipur disposed of two appeals filed by the assessee against a common order of the Commissioner of Income Tax (Appeals) passed under Section 250 of the Income-tax Act, 1961.
At the outset, the assessee sought to withdraw ITA No. 1820/JPR/2025. The Departmental Representative did not object, and the Tribunal dismissed that appeal as withdrawn.
The Tribunal then considered ITA No. 1831/JPR/2025 relating to Assessment Year 2022-23. The assessee’s return was processed under Section 143(1)(a), wherein TDS credit claimed at Rs. 2,37,479 was restricted to Rs. 10,037. The assessee, a Kachha Arahtiya (commission agent), had declared commission income of Rs. 2,94,975 and claimed TDS deducted under Sections 194Q, 194H and 194A. CPC granted only proportionate TDS credit on the basis of the commission receipts. The order under Section 143(1)(a) was affirmed by the CIT(A).
Before the Tribunal, the assessee challenged the denial of TDS credit under Section 194Q, the direction regarding verification of TDS under Sections 194A and 194H, and the CIT(A)’s observations distinguishing the judicial precedents relied upon by the assessee.
The CIT(A) had held that, under Section 199 and Rule 37BA of the Income-tax Rules, 1962, both income and TDS must be considered in the hands of the same person. According to the CIT(A), the TDS under Section 194Q had been wrongly deducted in the assessee’s PAN because the sales belonged to the agriculturists or farmers and not to the commission agent. The CIT(A) observed that the assessee should have ensured that declarations were furnished and TDS certificates or TDS statements were corrected so that the credit would be reflected in the names of the actual sellers. The CIT(A) therefore upheld the denial of TDS credit under Section 194Q while directing the Jurisdictional Assessing Officer to verify the corresponding income before allowing TDS credit under Sections 194A and other provisions.
