Girish Agrawal ORDER
Per Bench:
1. The instant appeal of the assessee was filed against the order of the Commissioner of Income-tax (Appeals)-NFAC, Delhi [in brevity ld. 'CIT(A)'] dated 26.10.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the 'Act') for assessment year 2014-15. The impugned order was emanated from the order of the ACIT, Circle-5(1), Kolkata (in brevity the 'AO') passed u/s 143(3) of the Act dated 11.01.2023.
2. The assessee has taken the following grounds of appeal:
"1. FOR that the Ld. CIT(A) was wrong and unjustified in rejecting the appeal of the Appellant company in respect of credit of TDS of Rs. 14,63,516/-.
2. FOR that the Ld. CIT(A) was wrong and unjustified in passing his appellate order in a summery manner.
3. FOR that the Ld. CIT(A) was wrong and unjustified in not discussing the facts and submissions of the Appellant-company in his appellate order.
4. FOR that the Ld. CIT(A) was wrong and unjustified in ignoring the provisions of section 199 and Rule 37BA.
5. FOR that the appellant craves leave to alter, amend, modify any of the grounds and/or take additional ground/s before or at the time of hearing of this appeal."
3. The brief fact of the case is that the assessment was completed u/s 143(3) of the Act. The TDS amount of Rs. 14,63,516/- was not credited by the AO in assessment proceedings. The assessee filed a rectification petition u/s 154 of the Act for allowing the TDS during the impugned assessment year. The assessee placed that the related turnover of the TDS was duly declared in the books and the return during the impugned assessment year. But the parties have taken this bill/payment in the next assessment year i.e. for AY 2015-16. The TDS was also credited for AY 2015-16 in 26AS but the assessee has not claimed this TDS whereas the assessee claimed in the year wherein the income has been declared. But ld. AO had not accepted the assessee's submission and upheld his non-allowability of TDS as per the order u/s 143(3)/ 154 of the Act. Being aggrieved, the assessee filed an appeal before ld. CIT(A). Ld. CIT(A) had upheld views of ld. AO. Being aggrieved, the assessee filed an appeal before us.
4. Ld. A/R first invited our attention that the assessee has declared turnover amounting to Rs. 47,34,33,360/- in the impugned assessment year and after deduction amounting to Rs. 24,69,62,555/- and balance amount is Rs. 22,64,70,795/- and related TDS was Rs. 45,29,415/-. But the same TDS is not reflected in Form-26AS because the party had not debited this amount in their books. Ld. AO had not allowed this TDS credit in this year against the assessee and the order was passed. Ld. AO had relied on the order of the Coordinate Bench Chennai ITAT in the case of M/s. Archean Realty Pvt. Ltd. (Now known as M/s. Archean Industries Pvt. Ltd.) vs. DCIT in ITA No. 790/CHNY/2020 order dated 31.05.2023. The relevant paragraph is inserted as below:
"9. In so far as denial for credit for taxes for AY 2015-16, we find that as per the provisions of Sec.199(3) of the Act r.w.r.37BA(l) of the Income Tax Rules, 1962, credit for TDS shall be given for assessment year for which such income is assessable. Since, the income pertains to transfer of property is assessable for AY 2015-16, the assessee has rightly claimed for credit for taxes for AY 2015-16 only. Therefore, we direct the AO to give credit for TDS for AY 2015-16 only."
5. Further, ld. A/R relied on the order of the ITAT Mumbai Bench in the case of Ignitive Digitech Private Limited vs. DCIT in ITA No. 367/MUM/2023 order dated 10.07.2023. The relevant paragraph is inserted as below:
"7. The AO has relied on sub-rule (1) of section 37BA for denying the benefit of TDS during the year under consideration. This part of the Rule provides that the credit for TDS shall be given to the person to whom payment has been made or credit has been given on the basis of information relating to TDS furnished by the deductor. What is material for sub-rule (1) is the beneficiary of credit for the TDS, being the person to whom payment has been made, which in the instant case is the assessee. The Id. CIT (A) has, in addition, relied on sub-rule (4) of Rule 37BA, which again provides that the credit for TDS shall be granted on the basis of information relating to deduction of tax at source furnished by the deductor. How, this rule prejudices the claim of the assessee is anybody's guess. Obviously, the information about the TDS by KMAMC is not denied. Both the sub-rules simply provide for granting of the benefit of TDS. The point of time at which the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the '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'. It is, ergo, abundantly clear from the mandate of Rule 37BA (3) (i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income, on which tax of Rs. 1,62,150/- was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. We, therefore, overturn the impugned order and direct accordingly."
6. Ld. D/R vehemently argued and relied on the order of the Revenue authorities.
7. We heard the rival submissions and considered the documents available in the record and also considered the judicial pronouncements of the Coordinate Benches. The assessee has claimed the TDS which was not posted in 26AS but the said income was duly declared in its return of income. We consider the order of ld. AO. The relevant paragraph is duly inserted as below:
"In the instant case, an order u/s. 143(3) of the I T Act, 1961 for A.Y. 2014-15 was passed on 13/12/2016. The assessee has filed a rectification application regarding non-credit of TDS claimed in the Income Tax Return for A.Y. 2014-15. On going through the available documents on record, it is seen that the assessee has claimed an amount of Rs. 46,81,094/-as TDS in the Income Tax Return. In the assessment order u/s. 143(3) of the I T Act, 1961 dated 13/12/2016, the undersigned has allowed an amount of Rs. 32,17,578/- as TDS to the assessee which was shown in the 26AS details."
8. The assessee is eligible for its TDS only in the year where the income is declared. In the assessment year i.e. AY 2015-16 the assessee had not credited its income and not even claimed the TDS. The relevant documents of the ITR for AY 2015-16 is enclosed in APB page 9. The assessee has no control about the debiting of the amount by the party in their books. But the assessee can only follow the law as directed u/s 199 of the Act read with Rule 37BA(3)(i) of the Income Tax Rules, 1962. The TDS is to be given for the assessment year for which the corresponding income assessable. We relied on the orders of the Coordinate Benches in the cases of M/s. Archean Realty Pvt. Ltd. (supra) and Ignitive Digitech Private Limited (supra). The assessee is eligible for the TDS in the year he claimed i.e. for the impugned assessment year. But we are not able to verify the TDS related to this income during the impugned assessment year. Ld. A/R and ld. D/R had not made any objection on remitting back the matter to the file of ld. AO. In our considered view, we direct ld. AO to verify the TDS and considering the eligibility, please allow the TDS credit to the assessee in this impugned assessment year. Accordingly, we remit back the matter to the file of ld. AO for further verification only in the limited grounds.
9. In the result, ITA No. 1442/KOL/2023 is allowed for statistical purposes.
Order pronounced in the open Court on 5th March, 2024.
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