Case Law Details
Ujjwal Singh Vs DCIT (ITAT Delhi)
In the instant case the tax has been deducted by the payer in Financial Year 2014-15 relevant to Assessment Year 2015-16 for which the invoice was drawn by the payee in Financial Year 2015-16 relevant Assessment Year 2016-17. The assessee thus has included an income of Rs.57,05,156/- in the Assessment Year 2016-17, i.e., in the year in which invoice has been raised and income accrued to the assessee. However, the Assessing Officer had denied the corresponding credit of TDS in the Assessment Year 2016-17. The assessee has also not claimed the credit for TDS in Assessment Year 2015-16 where the deduction was carried out by the payer and reflected in the form 26AS of that Assessment Year. This has resulted in double jeopardy leading to paying the taxes twice. It was contended that with the insertion of Rule 37BA w.e.f. Assessment Year 2009-10, the law is clear without any room for any ambiguity when read in conjunction with Section 199 of the Act. As per the law laid down in Section 199 r.w. Rule 37BA(3), the credit for TDS shall be allowed by the Assessing Officer in the year when the income has been offered by the assessee. In the instant case, the income has been offered by the assessee in the year of its accrued in Assessment Year 2016-17 and rightly so, hence the credit for TDS deserves to be allowed in Assessment Year 2016-17 as claimed in terms of Section 199 r.w. Rule 37BA(3). A reference in this regard was made to the decision rendered in Mahesh Software System Pvt. Ltd. vs. ACIT (2020) 181 ITD 524 (Pune) and; Shiv Gange Dealers Pvt. Ltd. vs. CPC (ITA No. 174/INd/2021) dated 17.05.2022 dealing with a case arising out of order passed under Section 154 of the Act. In the light of the factual matrix and the clear position of law, it was submitted that refusal to grant TDS credit in Assessment Year 2016-17 is against the mandate of law and apparent error on the contours of Section 154 of the Act.
ITAT held that we have no hesitation to accept the plea of the assessee. Denial of TDS credit in contradiction to the plain provisions of Section 199 r.w. Section Rule 37BA is clearly in the league of apparent error and thus liable to be rectified under Section 154 of the Act.
Hence, the assessee would be entitled to claim of credit of TDS corresponding to the income reported in Assessment Year 2016-17 itself, provided the assessee has not claimed any credit for TDS in earlier Assessment Year 2015-16.
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