Case Law Details
Rinkoo Processors Limited Vs ITO (ITAT Ahmedabad)
Material Facts
The assessee filed its return for AY 2015-16 declaring total income of ₹93,83,540. The original assessment under Section 143(3) was completed on 10.11.2017 determining total income at ₹95,29,988. Subsequently, the assessment was reopened under Section 147 based on ITS information showing TDS of ₹3,50,000 under Section 194IA reflected in the assessee’s Form 26AS relating to an immovable property transaction.
The assessee explained that it had not sold any property but had purchased an immovable property from M/s Goyal Developers for ₹3,50,00,000. While filing Form 26QB, it inadvertently entered its own PAN in the seller’s PAN column instead of the seller’s PAN. As a result, the TDS credit of ₹3,50,000 appeared in the assessee’s Form 26AS.
Procedural History
The Assessing Officer denied the TDS credit under Section 199 on the ground that the assessee, being the purchaser, was not entitled to the credit. On appeal, the CIT(A) directed the Assessing Officer to drop the penalty proceedings but confirmed the denial of TDS credit. The assessee thereafter appealed before the ITAT.
Legal Issues
- Whether the assessee was entitled to relief where TDS credit was reflected in its Form 26AS due to an inadvertent wrong PAN entry in Form 26QB.
- Whether the reassessment notice under Section 147 was valid when the recorded reasons stated that the assessee had sold the property instead of purchasing it.
Relevant Statutory Provisions
- Sections 143(3), 147, 194IA, 199 and 250 of the Income-tax Act, 1961.
- Rule 30 and Rule 37BA of the Income-tax Rules.
Assessee’s Submissions
The assessee submitted that it had duly deducted and deposited TDS of ₹3,50,000 under Section 194IA. The wrong PAN in Form 26QB was a bona fide clerical error. The seller had not claimed the TDS credit and the transaction had been fully settled. The assessee contended that the issue was procedural and required correction of departmental records. Reliance was placed on Parag Keshav Bopardikar vs. ITO & Ors..
Revenue’s Submissions
The Revenue relied upon Section 199 and Rule 37BA, contending that TDS credit is allowable only to the person from whose income tax has been deducted and supported the orders of the Assessing Officer and the CIT(A).
Tribunal’s Findings and Reasoning
The Tribunal found it undisputed that the assessee had purchased the property, deducted TDS of ₹3,50,000 under Section 194IA and deposited the tax with the Government. The dispute arose solely from the inadvertent quoting of the assessee’s PAN in the seller’s PAN column of Form 26QB.
The Tribunal noted that:
- The tax had actually been deposited.
- There was no finding that the tax had not been deposited.
- There was no finding that any double credit had been claimed.
- The seller had not claimed the impugned TDS credit.
Holding that the issue was essentially procedural, the Tribunal set aside the CIT(A)’s order on this limited issue and restored the matter to the Jurisdictional Assessing Officer. The Assessing Officer was directed to verify the factual position regarding the wrong PAN entry, the deposit of TDS of ₹3,50,000 and whether any other person had claimed the corresponding credit. Upon verification, the Assessing Officer was directed to carry out manual rectification of the bona fide mistake and grant consequential relief in accordance with law.
The Tribunal also held that the reasons recorded for issuing notice under Section 147 stated that the assessee had sold the property, whereas the assessee had purchased it, rendering the notice invalid.
Final Ruling
The Tribunal set aside the CIT(A)’s order on the TDS credit issue, restored the matter to the Jurisdictional Assessing Officer for verification and manual rectification, directed consequential relief in accordance with law, and allowed the appeal for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 19.11.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2015-16.
2. The assessee has raised following grounds of appeal:-
“1. The Learned NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI has erred in confirming disallowance for credit of TDS of Rs. 3,50,000/- without considering our submissions and explanations.
2. The Learned NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI has erred in not considering the fact that we had already settled the accounts of Goyal Developers and Goyal Developers has not claimed the TDS of Rs. 3,50,000/-.”
3. The brief facts of the case are that the assessee-company filed its return of income for the year under consideration on 30.09.2015 declaring total income of Rs.93,83,540/-. The assessment was originally completed under section 143(3) of the Act on 10.11.2017 determining the total income at Rs.95,29,988/-. Subsequently, the assessment was reopened u/s 147 of the Act on the basis of information available in the ITS records that TDS of Rs.3,50,000/- u/s 194IA of the Act had been reflected in the assessee’s Form No.26AS in respect of an immovable property transaction. During the reassessment proceedings, the assessee explained that it had not sold any property. On the contrary, it had purchased an immovable property from M/s Goyal Developers for a consideration of Rs.3,50,00,000/- and while deducting tax under section 194IA of the Act, an inadvertent mistake occurred in Form No.26QB whereby the PAN of the assessee was quoted in the seller’s PAN column instead of the PAN of M/s Goyal Developers. Consequently, the TDS credit of Rs.3,50,000/- came to be reflected in the assessee’s Form No.26AS.
3.1 The Assessing Officer held that since the assessee was the purchaser of the property, it was not entitled to the TDS credit u/s 199 of the Act and he accordingly denied the TDS credit of Rs.3,50,000/-.
4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A), who, directed the Assessing Officer to drop the penalty proceedings, however, confirmed the action of the Assessing Officer in denying the TDS credit.
5. Aggrieved by the order of the Ld. CIT(A) confirming the disallowance of TDS credit, the assessee is now in appeal before the Tribunal.
6. Before us, the Ld. AR submitted that the assessee had duly deducted and deposited TDS of Rs.3,50,000/- u/s 194IA of the Act; however, while filing Form No.26QB, the assessee inadvertently quoted its own PAN instead of the PAN of the seller, i.e. M/s Goyal Developers, due to which the TDS credit was reflected in the assessee’s Form No.26AS. It was submitted that the error was purely clerical and bona fide, the seller has not claimed the impugned TDS credit and the entire transaction stood fully settled between the parties. The Ld. AR, therefore, contended that the issue is procedural in nature and requires correction of the departmental records. Reliance was placed on the decision of the Hon’ble Delhi High Court in the case of Parag Keshav Bopardikar vs. ITO & Ors. [TS-727-HC-2025 DEL, decided on 27.05.2025] in support of the contention that a procedural error in Form No.26QB should not result in denial of relief where the tax has admittedly been deposited with the Government.
7. The Ld. DR, on the other hand, relied upon the orders of the Assessing Officer and the Ld. CIT(A). It was submitted that under section 199 of the Act read with Rule 37BA of the Rules, the TDS credit is allowable only to the person from whose income tax has been deducted and, therefore, the authorities below were justified in denying the claim of the assessee.
8. We have heard the rival submissions and perused the material available on record.
8.1 The undisputed facts emerging from the record are that the assessee had purchased an immovable property from M/s Goyal Developers for a consideration of Rs.3,50,00,000/- and had deducted tax at source of Rs.3,50,000/- u/s 194IA of the Act. It is equally undisputed that the said tax was deposited into the Government account. The controversy has arisen only because while furnishing Form No.26QB, the PAN of the assessee was inadvertently quoted in place of the PAN of the seller, as a result whereof the TDS credit came to be reflected in the assessee’s Form No.26AS. The Assessing Officer has denied the TDS credit on the ground that the assessee, being the purchaser, is not entitled to such credit and that the seller ought to have sought correction of the TDS particulars. The Ld. CIT(A) has affirmed the said action.
8.2 From the material available before us, we find that there is no dispute regarding the actual deduction and deposit of tax with the Central Government. There is also no finding recorded by the Revenue authorities that the tax has not been deposited or that any double credit has been claimed. The controversy is confined only to an inadvertent mistake committed while quoting the PAN in Form No.26QB. Before us, the assessee has contended that the mistake was bona fide and clerical in nature, that the seller has not claimed the impugned TDS credit.
8.3 The entire legal sequence of issue and the remedy accorded is as under:-
> STATUTORY OBLIGATION U/S 194IA:
As the buyer, the assessee was under statutory obligation under Section 1941A of the Act to deduct tax @1% on the property consideration. The assessee duly deducted tax of Rs. 3,50,000/- and deposited the same with the Government treasury within the prescribed period. The deposit of this tax is not disputed by the Revenue and a matter of record.
> THE EXACT ERROR IN FORM 26QB:
Form 26QB is a challan-cum-statement required to be filed electronically by the buyer under Section 1941A read with Rule 30 of the Income Tax Rules, 1962. In Form 26QB, two distinct PAN columns are to be filled: Column (i): PAN of Buyer – to be filled with the Buyer’s own PAN Column (ii): PAN of Seller – to be filled with the Seller’s PAN At the time of filing Form 26QB. The assessee inadvertently entered its own PAN (AAACR7365L) in Column (ii) – i.e., the Seller’s PAN column-instead of the PAN of M/s Goyal Developers (the Seller). All other details in Form 26QB the property address, the sale consideration of Rs. 3,50,00,000/-, and the TDS amount of Rs. 3,50,000/- – were correctly stated. This was a single-column filling error without any mala fide intent.
> CONSEQUENCE OF THE WRONG PAN ENTRY:
The Income Tax Department’s TRACES system processes Form 26QB and credits TDS to the PAN mentioned in the Seller’s PAN column. Since the assessee’s own PAN was inadvertently mentioned in the Seller’s PAN column, TDS credit of Rs. 3,50,000/- was reflected in the assessee’s Form 26AS instead of M/s Goyal Developers’ Form 26AS. The assessee, acting in complete good faith and in lawful reliance upon its own Government-authenticated Form 26AS, claimed TDS credit of Rs. 3,50,000/- in its Return of Income for AY 2015-16.
> NO DOUBLE CREDIT:
M/s Goyal Developers did not and could not claim TDS credit of Rs. 3,50,000/-, as no such credit appeared in their Form 26AS. There is, therefore, no instance of double credit or double benefit having been availed by any party.
8.4 In view of above, in our considered opinion, the present issue is essentially procedural in nature. Therefore, in the interest of justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) on this limited issue and restore the matter to the file of the Jurisdictional Assessing Officer. The Jurisdictional Assessing Officer shall verify the factual position regarding the inadvertent quoting of the wrong PAN, the actual deposit of TDS amounting to Rs.3,50,000/-and check as to whether the corresponding TDS credit has been claimed by any other person or not. Upon such verification, the Jurisdictional Assessing Officer shall carry out the necessary manual rectification for rectifying the bona fide mistake and grant consequential relief to the assessee in accordance with law.
8.5 Even otherwise, we hold that the reasons recorded by the Assessing Officer while issuing notice u/s 147 mentions that the assessee had sold the property, whereas, the assessee had purchased the property, rendering the issue of notice invalid.
9. In the result, the appeal of the assessee is allowed for statistical purposes.
The order pronounced in the open Court on 30.06.2026
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