ITAT Delhi: Deletion of Income Addition due to Duplicate Entries in Form 26AS

Julius Gerardus Theodorus Van Wijck Vs DCIT (ITAT Delhi)

Introduction: In a recent decision by the Income Tax Appellate Tribunal (ITAT) Delhi, the case of Julius Gerardus Theodorus Van Wijck vs. DCIT for the Assessment Year 2013-14 was adjudicated. The appeal was filed against the Assessing Officer’s order dated 31.01.2023, and the ITAT Delhi addressed crucial issues related to the treatment of income from other sources and the crediting of TDS against salary income.

Detailed Analysis: The appellant, a non-resident individual employed by M/s Greenply Industries Limited in India, faced an addition of Rs. 27,26,225/- as income from other sources by the Assessing Officer. The case originated from the appellant’s receipt of Rs. 94,03,473/- from his employer during the Assessment Year 2013-14. The AO, observing that the appellant had not filed an income tax return for the relevant assessment year, reopened the case under Section 147 of the Income Tax Act.

During the assessment, the AO added Rs. 27,26,225/- under the head “Income from Other Sources,” leading to a total income of Rs. 94,03,473/-. The appellant contested this addition, highlighting duplicate entries in Form 26AS, the source of which was unknown to him. The AO issued notices to M/s Greenply Industries Ltd., seeking clarification on the nature of the transactions, but the appellant did not file any income tax return.

The Dispute Resolution Panel (DRP) emphasized that the AO provided ample opportunities for the appellant to explain the receipts reflected in Form 26AS. However, the appellant failed to respond to repeated notices. The DRP held that the burden was on the appellant to furnish necessary explanations, and his failure to do so justified the addition.

Upon careful examination of Form 26AS, the ITAT Delhi noted the presence of duplicate entries. Consequently, the ITAT ordered the deletion of the addition of Rs. 27,26,225/- under the head “Income from Other Sources.” The tribunal directed the determination of salary income at Rs. 66,77,248/- and instructed the crediting of TDS of Rs. 18,57,271/- as per Form 16.

Conclusion: The ITAT Delhi’s decision in Julius Gerardus Van Wijck vs. DCIT exemplifies the significance of providing valid explanations and responding to AO notices during assessments. The acknowledgment of duplicate entries in Form 26AS played a pivotal role in the deletion of the income addition. Taxpayers are reminded of the importance of accurate reporting and timely responses to avoid unintended consequences during income tax assessments. The ITAT’s order serves as a precedent for cases involving discrepancies in Form 26AS and emphasizes the need for meticulous scrutiny in such matters.

FULL TEXT OF THE ORDER OF ITAT DELHI

The present appeal has been filed by the assessee against the order of Assessing Officer dated 31.01.2023 for the AY 20 13-14.

2. The assessee has raised the following grounds of appeal are as under:-

1. The AO erred in treating an amount of Rs. 27,26,225/- as income from other sources in India while ignoring the duplicate entries in Form 26AS of the assessee.

2. The AO erred in not granting credit of TDS amounting to Rs. 18,57,271/- against its salary income amounting to Rs. 66,77,248/-.

3. The assessee is a non-resident individual who earned Salary income in India during Assessment Year 2013-14 by virtue of his employment with M/s Greenply Industries Limited (the Employer). The assessee has not filed any return of income for the relevant assessment year. The AO observed that the assessee has received a sum of Rs. 94,03,473/- from M/s Green ply Industries Ltd. and reopened the case u/s 147 of the Act after recording reasons and obtaining necessary approval of the competent authority for the issue of notice u/s 148 dated 30.03.2021. The AO completed the assessment which culminated in the addition of Rs. 94,03,470/- as under:

4. Heard the arguments of both the parties and perused the material available on record.

5. The AO issued a final SCN dated 03.03.2022 whereby the assessee was required to file details and documents in support of the receipts from his employer amounting to Rs. 94,03,473. However, the assessee did not file any ITR and the AO proceeded to complete the assessment on the basis of section 144 of the act on the basis of details and documents available on record. The AO has noted that he issued a notice u/s 143(6) to M/s Greenply Industries Ltd. on 23.03.2022 to ascertain the nature of receipts/transactions. It is observed that as per the response of M/s Greenply Industries Ltd. the assessee received a salary amounting to Rs. 66,77,248/- during the year under The assessee has submitted that the whole of amount of Rs. 94,03,473/ is relatable to salary provided by M/s Greenply Industries Ltd. It is submitted that the assessee has received only Rs. 66,77,248/- as salary from his employer. It is submitted by the assessee that the additional amount of Rs. 27,26,225/- is the result of duplicate entries in the Form 26AS, source of which is unknown to the assessee.

6. The DRP held that, the assessee was granted several opportunities by the AO to explain/substantiate the receipts from his employer as reflected in Form 26AS of the assessee. However, the assessee did not respond to the repeated notices issued by the AO. The AO was in possession of the document, that is Form 26AS, which evidenced that the assessee received a sum of Rs. 94,03,473/-from his employer. Hence the DRP held that, it is incumbent upon the assessee to furnish necessary explanation in this regard which he failed to do so despite repeated opportunities provided to him by the AO.

7. We have gone through Form 26AS and find there are some duplicate entries. Hence, we hold that the addition made on account of Rs. 27,26,225/- under the head income from other sources be deleted. We direct that the income from salary is determined Rs. 66,77,248/- and the corresponding credit as per the Form 16 for TDS Rs. 18,57,271/-be given. The JAO shall verify the figures and grant relief as directed.

8. In the result, the appeal of the assessee is allowed.

Order Pronounced in the Open Court on 08/12/2023.