Every taxpayer has faced this moment. 

You open your Form 26AS, 
You see tax already deducted, 
And then comes the question from the department: 

“If tax was deducted, why haven’t you shown the income?” 

That’s exactly the situation the Delhi HC examined in a case that quietly reshaped how we look at Form 26AS mismatches. 

The Background: A Mismatch That Sparked Litigation- 

Relcom, a company engaged in erection and installation of telecom towers, filed its return for AY 2009-10 declaring receipts of about ₹6.20 crore. 

However, Form 26AS reflected TDS of ₹1.20 crore, corresponding to receipts of nearly ₹19 crore. 

For the Assessing Officer, this was a red flag. 

The Real Problem: A PAN Error, Not Income Suppression- 

The excess TDS arose because a vendor mistakenly quoted Relcom’s PAN instead of that of its sister concern (Relcom Engineering Pvt. Ltd.) while deducting tax. 

Arguments of Relcom- 

1. The income of ₹19 crore did not belong to Relcom; 
2. It was offered to tax by the sister concern; 
3. The sister concern never claimed the TDS credit; 
4. The mistake was purely clerical, not tax motivated. 

The Department’s Stand: Rules Are Rules- 

The tax department relied on a strict reading of the law: 

“Tax credit belongs only to the person whose income is taxed.” 

Since Relcom didn’t show the ₹19 crore as income, the department said: 
“No income, no credit.” 

Technically correct. 
Practically unfair. 

And, the AO disallowed the entire TDS credit, invoking Section 199. 

The First Relief: CIT(A) and ITAT- 

Both the CIT(A) and the ITAT took a more practical and equitable view. 

They asked a simple question: 

“Has the government lost any tax?” 

The answer was no. 

So why deny credit? 

But the Revenue carried the matter to the Delhi High Court, hoping for a strict interpretation. 

The High Court’s Message: Tax Law Needs Common Sense- 

The Delhi High Court dismissed the department’s appeal. 

And its message was clear. 

1. Tax Law Is About Reality, Not Just Forms- 

The income was taxed, the tax was paid, and No one took double benefit. Denying credit would serve no purpose. 

2. No Loss to the Government- 

The court noted: 

1. Revenue didn’t lose a rupee, 
2. The sister company didn’t claim the credit,
3. There was no tax evasion, only a clerical error.

3. Procedure Shouldn’t Punish Honest Taxpayers- 

Expecting taxpayers to fix a third party’s PAN error or lose their credit forever was held to be unfair and impractical. 

Why This Case Matters to Everyone–

This judgment matters because mistakes like these happen every day: 

1. Wrong PAN in TDS returns,
2. Mismatches in Form 26AS or AIS,
3. Automated notices with zero human review.

CIT vs. Relcom is not just a tax case. 

It’s a reminder that: 

“The purpose of tax law is to collect tax, not to collect penalties from innocent errors.” 

Justice must outweigh technicalities. 

Because tax compliance should be about fairness, not fear. 

For downloading the full judgment visit- https://counselvise.com/direct-tax/judgements/commissioner-of-income-tax-15-relcom-26-2015