Vanitaben Gamalsingh Solanki Vs ITO (ITAT Surat)
The Surat Bench of ITAT allowed the appeal for statistical purpose which means that ITAT uphold the decision of CIT (A) but without any real impact on the case. It allowed TDS credit of the of Rs.4,50,000/- but in AY 2018-19 whereas it was claimed in AY 2016-17.
Assessee filed her ITR for AY.2018-19 on 03.03.2018, declaring total income of Rs.6,40,220/- after claiming Rs.4,57,980/- as refund after credit of TDS, amounting to Rs.5,09,477/-. The DCIT, CPC did not allow the credit of TDS of Rs.5,09,477/- through the same was reflected in Form 26AS. The assessee had requested for online rectification dated 08.04.2019 which was rejected by the CPC vide order u/s 154 dated 28.06.2019. Therefore, no credit of the TDS had been given in the order u/s 154 r.w.s. 143(1) of the Act for AY.2016-17. Assessee had sold an immovable property at Rs.13,51,40,000/- and declared long-term capital gain (LTCG) at Rs.3,29,57,386/-. The assessee received sale consideration of Rs.4,50,00,000/- for AY.2016-17 on which TDS at Rs.4,50,000/- was deducted u/s 194I of the Act by purchaser which was not allowed by CPC.
On appeal before CIT (A) it was argued by the AR that intimation u/s 143(1) does not contain any reason for disallowing credit of TDS. No show cause notice was issued before passing intimation order u/s 143(1) of the Act. TDS credit of Rs.4,50,000/- is reflecting in Form 26AS for AY, which is not disputed in FY.2018-19.
CIT (A) observed that as per Rule 37BA(3) of IT Rules, TDS credit can be given only for those receipts, which are offered to tax in the relevant assessment year. He further observed that TDS corresponding to such income can be claimed only in the year in which such income is offered for tax. It is nowhere mentioned in the section that the same should be claimed by the payee in the year of its deduction itself. Hence, he rejected the contention of the assessee and direct to AO to allow credit for such TDS amount of Rs.4,50,000/- in the AY.2018-19.
On further appeal to ITAT, AR submitted that the same arguements as before the CIT (A) on the other hand DR relied upon the order passed by CIT (A) and further submitted that direction regarding allowence of TDS credit of amount in dispute was already given to AO by CIT (A) in AY 2018-19.
ITAT observed that assessee sold immovable property in FY.2017-18 (AY.2018-19) and received sale consideration of Rs.4,50,00,000/-, Rs.4,00,000/- and Rs.8,61,40,000/- in AYs.2016-17, 2017-18 and 2018-19 respectively and TDS was declared accordingly. The assessee has declared capital gain of Rs.3,29,57,386/- in FY.2017-18 (AY.2018-19). Though the payments were received in three years but credit for the TDS can be allowed only in AY.2018-19 in which income was propose to be assessed. Hence, CIT (A) rightly rejected contention of the assessee.
FULL TEXT OF THE ORDER OF ITAT SURAT
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 03.04.2023 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2016-17.
2. The grounds of appeal raised by the assessee are as under:
“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned CIT(A) has erred in confirming the action of the CPC in not rectifying the mistake apparent from record u/s 154.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of CPC in disallowing the credit of TDS of Rs.4,50,000/- even though the same was reflected in Form 26AS.
3. It is therefore prayed that disallowance made by CPC and confirmed by CIT(A) may please be deleted.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
3. All three grounds of appeal raised by the assessee are inter-related. Brief facts of the case are that the assessee filed her return of income for AY.2018-19 on 03.03.2018, declaring total income of Rs.6,40,220/-. The assessee had claimed Rs.4,57,980/- as refund after credit of TDS, amounting to Rs.5,09,477/-. During the assessment year, the assessee had shown Rs.3,47,558/- and Rs.3,02,662/- as income from house property and income from other sources respectively. The DCIT, CPC, Bengaluru did not allow the credit of TDS of Rs.5,09,477/- through the same was reflected in Form 26AS. The assessee had requested for online rectification dated 08.04.2019 which was rejected by the CPC vide order u/s 154 dated 28.06.2019. Therefore, no credit of the TDS had been given in the order u/s 154 r.w.s. 143(1) of the Act for AY.2016-17.
4. The assessee had sold an immovable property at Rs.13,51,40,000/- and declared long-term capital gain (LTCG) at Rs.3,29,57,386/-. The assessee received sale consideration of Rs.4,50,00,000/- for AY.2016-17 on which TDS at Rs.4,50,000/- was deducted u/s 194I of the Act by purchaser i.e., Happy Home Infra Tech. Further, on perusal of Form 26AS, the TDS u/s 194I of the Act to the sum of Rs.24,959/- was deducted on the receipt of Rs.2,49,391/- and the TDS u/s 194I of the Act, to the sum of Rs.34,518/-, was deducted on receipt of Rs.2,45,125/-. The credit for TDS of Rs.4,50,000/- has not been allowed in AY.2016-17.
5. Aggrieved by the order of CPC, Bengaluru, the assessee filed the appeal before CIT(A). The CIT(A) had given opportunity to the assessee to submit details before him. He had issued three notices for fixing date of hearing on 12.02.2021, 17.08.2022 and 23.03.2023. The reply of the appellant is at para 6.1 (pages 3 to 7) of the appellate order. The CIT(A) observed that AO, CPC has not allowed the claim of the appellant in respect of TDS of Rs.5,09,477/-. As per Rule 37BA(3) of the Income-tax Rules, TDS credit can be given only for those receipts, which are offered to tax in the relevant assessment year. He further observed that TDS corresponding to such income can be claimed only in the year in which such income is offered for tax. It is nowhere mentioned in the section that the same should be claimed by the payee in the year of its deduction itself. He rejected the contention of the assessee and direct to AO to allow credit for such TDS amount of Rs.4,50,000/- in the AY.2018-19. Regarding TDS of Rs.59,447/-, the CIT(A) held that the appellant is entitled to credit for TDS deducted by the deductor. He directed to AO to verify the claim of the appellant from the records and allow claim of the appellant after verification. Hence, the CIT(A) partly allowed the appeal of the assessee.
6. Aggrieved by the order of CIT(A), the assessee filed appeal before the The Learned Authorized Representative (Ld. AR) of the assessee submitted a paper book containing at pages 1 to 78. The Ld. AR submitted the acknowledgment of return of income along with computation of income, Form 26AS, intimation order for AY.2016-17, dated 27.03.2019, rectification order for AY.2016-17 dated 28.06.2019. He also submitted Form 26AS for AY.2017-18 and intimation order for AY.2017-18 dated 01.01.2018. He further submitted acknowledgment of return of incomealong with computation of income for AY.2018-19, Form 26AS for AY.2018- 19, intimation order for AY.2018-19 dated 01.05.2019, acknowledgment of written submission dated 15.03.02021 and written submission before CIT(A) dated 15.03.2021. The Ld. AR submitted that intimation u/s 143(1) does not contain any reason for disallowing credit of TDS. No show cause notice was issued before passing intimation order u/s 143(1) of the Act. In the alternative, he requested to allow TDS credit of Rs.4,50,000/- appearing in Form 26AS for AY, which is not disputed in FY.2018-19 and the AO should be directed accordingly.
7. On the other hand, Learned Senior Departmental Representative (Ld. DR) of the revenue supported the order of lower authorities. He submitted that the order of CIT(A) is in accordance with law and he has already directed AO to allow credit for such amount in AY.2018-19.
8. We have heard both the parties and perused the materials available on record. The appellant has filed appeal before CIT(A) against the order u/s 154 of the Act dated 28.06.2019 for AY.2016-17. The two grounds before CIT(A) were in respect of the action of DCIT, CPC in not rectifying the mistake apparent from record u/s 154 of the Act and not giving credit of TDS of Rs.5,12,615/- in AY.2016-17. We find that the CIT(A) has discussed in detail the facts of the case and passed a speaking order allowing the appeal of assessee partly. The assessee had sold immovable property in FY.2017-18 (AY.2018-19) for total consideration of Rs.13,51,40,000/- and offered long‑ term capital gain of Rs.3,29,57,386/-. The appellant had, however, received sale consideration of Rs.4,50,00,000/-, Rs.4,00,000/- and Rs.8,61,40,000/- in AYs.2016-17, 2017-18 and 2018-19 respectively. TDS of Rs.4,50,000/-, Rs.40,000/- and Rs.8,61,400/- were deducted by the purchaser, i.e., M/s Happy Home Infra Tech. As per Rule 37BA(3) of the Income-tax Rule, 1962 “(3)(i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.” In the instant case, the assessee has declared capital gain of Rs.3,29,57,386/- in FY.2017-18 (AY.2018-19). Though the payments were received in three years, but credit for the TDS u/s 194IA deducted by the purchaser, M/s Happy Home Infra Tech, can be allowed only in AY.2018-19. Therefore, claim to allow credit of TDS of Rs.4,50,000/- in AY.2016-17 is not in accordance with the clear provisions of the Act. The CIT(A) has rightly rejected the ground of the assessee for AY.2016-17. However, he has directed AO to allow credit of such TDS amount of Rs.4,50,000/- in AY.2018-19, which is correct. We direct the AO to withdraw credit of TDS of Rs.4,50,000/- from AY.2016-17, if the same has been allowed, after due verification by AO. The AO is further directed to allow credit of TDS of Rs.4,50,000/- in AY.2018-19. This ground is allowed for statistical purpose.
9. In the result, the appeal of the assessee is allowed for statistical purpose.
Order is pronounced in the open court on 28/11/2024.
