Case Law Details
Kirtida Rameshchandra Chandarana Vs CIT (Appeals) (ITAT Mumbai)
ITAT held that disallowance of TDS credit for Mismatch in Form 26AS & Form 16A is which are generated by CPC is Insensitive & injudicious and are clear violation of equity and citizen charter issued by CBDT
Assessee filed her return of income on the basis of record generated by department itself i.e., form no 26AS and form no 16A. The documents which has been processed and issued by the department itself on which assessee relied, how there can be a case of mistake apparent from record. May be there is a mismatch in the data pertaining to assessee and data pertaining to deductor (processed and maintained by department), CPC Bangalore and jurisdictional ITO can’t proceed u/s 154 against the assessee.
We declare this whole action of CPC Bangalore and in turn jurisdictional ITO is bad in law hence set aside with a consequential direction to give full credit of TDS claim by the assessee and any other money she deposited during this period.
Such type of actions by the assessing authorities and insensitive decision of Ld. CIT(A) is not appreciable and are clear violation of equity and citizen charter issued by the parent authority i.e., Central Board of Direct Taxes. It is expected from the higher authorities and cadre controlling authorities of the station to take cognizance of such type of actions of assessing authorities and insensitive and injudicious decisions of Ld. CIT (A).
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against the order of National Faceless Appeal Centre [hereinafter referred to as (‘NFAC)’) dated 17.12.2021 for the Assessment Year (AY) 2013-14. The assessee has raised the following grounds of appeal:
“I. DISALLOWANCE OF CREDIT FOR TAXES DEDUCTED AT SOURCE WHEN IT IS DULY APPEARING IN FORM 26AS AND THE CORRESPONDING INCOME IS ALSO OFFERED TO TAX.
1.1 On the facts and the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) (herein referred to as ‘CITA) has erred in confirming the withdrawal of credit for taxes deducted at source (TDS) under section 1943 of the Income Tax Act, 1961, amounting to Rs. 413,750 in respect of professional fees earned by the appellant which is reflecting in Form 26AS and where the corresponding income has also been offered to tax on the ground that the deductor has withdrawn the said credit.
1.2 In doing so, the learned CIT (A) has erred in relying on the statement mentioned in the order u/s. 154 that the taxes deducted earlier in the name of the appellant have been withdrawn by the deductor, whereas the TDS have not been withdrawn as can be seen from Form 26AS and Form 16A – Certificate for tax deducted at source. The Form 26AS clearly shows the TDS as “F” i.e., Final against the impugned TDS.
1.3 The appellant prays that the officer be directed to verify whether the TDS standing to the credit of the appellant and accordingly grant credit.
1.4 The appellant prays that the disallowance of credit for TDS amounting to Rs. 4, 13,750 be deleted.
1.5 The appellant further prays that the consequential interest under sections 234B amounting to Rs. 66,963 and 234C amounting to Rs. 12,576 be recomputed after granting credit for the full amount of TDS that the appellant is entitled to.”
2. Brief facts of the case are that the assessee has filed her return of income on 26-09-2013, declaring total income of Rs 42,84,430/-. Total tax liability on this income was Rs 11, 48,789/-. Against this liability of Rs 11, 48,789/- assessee paid advance tax of Rs 715000/- and claimed TDS of Rs 453605/-, resulting in refund u/s 244A) amounting to Rs 19,816/-
3. On 10th of August 2018 assessee received a rectification order u/s 154. In this order TDS credit of Rs 4, 13,570/- was disallowed and consequential interest of Rs 66,963/- and Rs 12,576/- u/s 234B and 234C respectively also charged. Against this order u/s 154 assessee preferred an appeal before the Ld. CIT (A)-46 (Mum.)
4. Assessee presented her case before the Ld. CIT (A) but was not succeeded to get relief from the Ld. CIT (A). Against that order of Ld. CIT (A) passed u/s 250, assessee filed an appeal before us.
5. We have gone through the order passed u/s 154 dated 10-08-2018, order of the Ld. CIT(A) and paper book filed by the assessee in support of her claim.
6. We have examined the submission of the assessee before the Ld. CIT(A) and, statement of total income computed, ledger of retainership fees received, reconciliation of TDS claims along with form no 26AS duly downloaded from the site of CPC and form 16A (processed by CPC) issued by the deductor M/s Tatva Legal.
7. We have noticed page no-10 of paper book (form no 26AS), assessee filed her return of income on 26-09-2013 and this form no 26AS attached by the assessee clearly showing status of data updated till 29-12-2021 and it is confirming the claim of assessee that TDS deducted by M/s Tatva legal in AY 201314 was Rs 4,20,000/- we further observed form nos. 16A issued by M/s Tatva Legal vide page no. 18,20,22 and 24 confirming the amount claimed by the assessee. In addition to this these 4 forms no. 16A issued to assessee by the deductor were all updated on 17-10-2013, whereas assessee filed her return of income 26-09-2013.
8. Reference of form no 26AS which assessee downloaded on 29-12-2021, form no 16A which was last updated on 17-10-2013 and reconciliation of TDS claim clearly substantiate the claim of the assessee about true declaration of income and correct claim of TDS.
9. It is nowhere from the record established that on what basis CPC Bangalore and jurisdictional ITO ward-35(1) (5), reduced the claim of the assessee from Rs 4, 53,605/- to Rs 39,605/-. It is further noted that the proceedings u/s 154 can be done only in the cases where there is a mistake apparent from record and no debatable issue is involved in this case the record before us clearly established that there is no mistake apparent from record as far as assessee is concerned. Department nowhere able to establish the fact as observed by the Ld. CIT (A) in his order vide page no. 6, Para 5.3 “The credit for TDS is governed by the provisions of section 199 of the Act read with Rule 37BA of the Income Tax Rules, 1962. As per order u/s 154 dated: 10.08.2018, the tax deductor of the appellant has withdrawn certain tax credits as per Rule 37BA. In view of the fact that the taxes deducted earlier in the name of the appellant have been withdrawn by the deductor, only the tax credits which have not been withdrawn and those appearing in the claims of the appellant are allowed by the assessing officer in the case of the appellant. In view of the above facts and circumstances, I do not see any reason to interfere in the order of the AO, the appeals of the appellant are not allowed.” This observation challenges even the jurisdiction of CPC Bangalore and jurisdictional ITO ward-35(1)(5).
10. Assessee filed her return of income on the basis of record generated by department itself i.e., form no 26AS and form no 16A. The documents which has been processed and issued by the department itself on which assessee relied, how there can be a case of mistake apparent from record. May be there is a mismatch in the data pertaining to assessee and data pertaining to deductor (processed and maintained by department), CPC Bangalore and jurisdictional ITO can’t proceed u/s 154 against the assessee.
11. We declare this whole action of CPC Bangalore and in turn jurisdictional ITO is bad in law hence set aside with a consequential direction to give full credit of TDS claim by the assessee and any other money she deposited during this period.
12. Such type of actions by the assessing authorities and insensitive decision of Ld. CIT(A) is not appreciable and are clear violation of equity and citizen charter issued by the parent authority i.e., Central Board of Direct Taxes. It is expected from the higher authorities and cadre controlling authorities of the station to take cognizance of such type of actions of assessing authorities and insensitive and injudicious decisions of Ld. CIT (A).
13. In the result appeal of the assessee is fully allowed with consequential relief in terms of reversal of interest charged u/s 234B and 234C with immediate grant of refund if any with consequential interest.
Order pronounced in the open court on 5th day of August, 2022.
