DCIT(IT) - 2(2)(1), MUMBAI, MUMBAI V. EBAY INTERNATIONAL AG, MUMBAI

ITA 5705/MUM/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which directed the Assessing Officer to verify and grant an additional TDS credit claimed by Ebay International AG for the assessment year 2010-11. The primary legal contention was whether the rectification proceedings under section 154 of the Income-tax Act, 1961 could entertain a claim for TDS credit that was not included in the original return. The Assessing Officer had initially rejected the claim on procedural grounds, suggesting the filing of a revised return or an application under section 119(2)(b) of the Act. However, the CIT(A) found merit in the assessee's claim and directed a verification, which the tribunal upheld.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471367 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: PRANAY GANDHI
• Keywords: Revised return; TDS; Rectification of order; Procedural lapse
• Section: 154; 119(2)(b)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 5705/MUM/2024 Assessment Year: 2010-11 DCIT(IT)-2(2)(1), Room No. 606, 6th floor, Kautilya Bhavan, G Block, BKC, Mumbai-400051. Vs. Ebay International AG 18th floor, Express Towers, Nariman Point, Mumbai-400021. PAN NO. AABCE 4327 L Appellant Respondent Assessee by : Mr. Pranay Gandhi Revenue by : Mr. Hemanshu Joshi, Sr. DR Date of Hearing : 18/02/2025 Date of pronouncement : 19/02/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the Revenue against order dated 02.08.2024 passed by the Ld. Commissioner of Income-tax- 56, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2010-11 in relation to rectification order passed by the Assessing Officer in terms of section 154 of the Income-tax Act, 1961 (in short ‘the Act’). 2. The grounds raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred to directed the A.O to verify and the additional TDS credit of Rs. 2,28,36,127/ 2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred to consider the assessee's letter dated 30.03.2021 wherein the assessee had not filed revised return or application TDS of Rs. 2,28,36, 127/ 3. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred not to consider the adjudication of the AO as to the provisions of section 155(14) of the Ac applicable to 3. We have carefully considered the submissions advanced by both parties and have perused the relevant material on record. The primary issue for our consideration is whether the assessee's claim for additional credit o Rs. 2,28,36,127/- could be entertained in the course of rectification proceedings. The assessee, through its rectification application, sought credit for the aforesaid TDS amount. However, the Assessing Officer rejected the claim on the ground that it had not been made in the original return of income filed by the assessee. The Assessing Officer was of the view that the appropriate course of action for the assessee was either to file a revised return within the pr time or to seek relief by way of an application under section 119(2)(b) of the Act. consideration, directed the Assessing Officer to verify the claim and ITA No. 5705/MUM/2024 The grounds raised by the Revenue are reproduced as under: Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred to directed the A.O to verify and the additional TDS credit of Rs. 2,28,36,127/-. 2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred to consider the assessee's letter dated 30.03.2021 wherein the assessee had not filed revised return or application u/s 119(2)(b) of • the Act for claiming additional TDS of Rs. 2,28,36, 127/-• Whether on the facts and circumstances of the case and in CIT(A) erred not to consider the adjudication of the AO as to the provisions of section 155(14) of the Act are not the assessee. We have carefully considered the submissions advanced by both parties and have perused the relevant material on record. The primary issue for our consideration is whether the assessee's claim for additional credit of Tax Deducted at Source (TDS) amounting to could be entertained in the course of rectification proceedings. The assessee, through its rectification application, sought credit for the aforesaid TDS amount. However, the Assessing ejected the claim on the ground that it had not been made in the original return of income filed by the assessee. The Assessing Officer was of the view that the appropriate course of action for the assessee was either to file a revised return within the pr time or to seek relief by way of an application under section . Upon appeal, the learned CIT(A) consideration, directed the Assessing Officer to verify the claim and Ebay International AG 2 ITA No. 5705/MUM/2024 The grounds raised by the Revenue are reproduced as under: Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred to directed the A.O to verify and grant 2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred to consider the assessee's letter dated 30.03.2021 wherein the assessee had not filed revised return u/s 119(2)(b) of • the Act for claiming additional Whether on the facts and circumstances of the case and in CIT(A) erred not to consider the adjudication of the t are not We have carefully considered the submissions advanced by both parties and have perused the relevant material on record. The primary issue for our consideration is whether the assessee's claim f Tax Deducted at Source (TDS) amounting to could be entertained in the course of rectification proceedings. The assessee, through its rectification application, sought credit for the aforesaid TDS amount. However, the Assessing ejected the claim on the ground that it had not been made in the original return of income filed by the assessee. The Assessing Officer was of the view that the appropriate course of action for the assessee was either to file a revised return within the prescribed time or to seek relief by way of an application under section CIT(A), after due consideration, directed the Assessing Officer to verify the claim and allow the TDS credit in accordance with the law finding of the Ld. CIT(A) is reproduced as under: “23. Accordingly, the A.O. is directed to verify and grant the additional TDS credit of Rs.2,28,36.127/ law. Ground Nos. 1 to 4 of the appeal is hereby treated as for statistical 4. In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned as he has only directed to verify the claim and allow in accordance with law. The approach adopted by the learned CIT(A) is in conso justice. The mere fact that the claim was not made in the original return cannot, by itself, be a ground to deny the legitimate credit of TDS if the assessee is otherwise entitled to the same. The object of tax administration is to ensure correct and fair assessment of income, and any procedural lapse should not result in an undue burden on the taxpayer. It is well established that where a tax has already been deducted at source and deposited with the government, the cor assessee, subject to verification of facts. Accordingly, we find no infirmity in the order of the learned CIT(A) in directing the Assessing Officer to verify the claim and grant the credit as per law. We, therefore, uphold the said direction, emphasizing that the Assessing Officer shall ensure due verification before granting the credit of TDS to the assessee. We order accordingly. appeal of the Revenue are accordingly dismissed. ITA No. 5705/MUM/2024 allow the TDS credit in accordance with the law finding of the Ld. CIT(A) is reproduced as under: 23. Accordingly, the A.O. is directed to verify and grant the additional TDS credit of Rs.2,28,36.127/- to the appellant as per law. Ground Nos. 1 to 4 of the appeal is hereby treated as purpose.” In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned as he has only directed to verify the claim and allow in accordance with law. The approach adopted by the learned CIT(A) is in consonance with the principles of natural justice. The mere fact that the claim was not made in the original return cannot, by itself, be a ground to deny the legitimate credit of TDS if the assessee is otherwise entitled to the same. The object of ration is to ensure correct and fair assessment of income, and any procedural lapse should not result in an undue burden on the taxpayer. It is well established that where a tax has already been deducted at source and deposited with the government, the corresponding credit must be granted to the assessee, subject to verification of facts. Accordingly, we find no infirmity in the order of the learned CIT(A) in directing the Assessing Officer to verify the claim and grant the credit as per law. uphold the said direction, emphasizing that the Assessing Officer shall ensure due verification before granting the credit of TDS to the assessee. We order accordingly. appeal of the Revenue are accordingly dismissed. Ebay International AG 3 ITA No. 5705/MUM/2024 allow the TDS credit in accordance with the law. The relevant 23. Accordingly, the A.O. is directed to verify and grant the to the appellant as per law. Ground Nos. 1 to 4 of the appeal is hereby treated as allowed In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned as he has only directed to verify the claim and allow in accordance with law. The approach adopted by the nance with the principles of natural justice. The mere fact that the claim was not made in the original return cannot, by itself, be a ground to deny the legitimate credit of TDS if the assessee is otherwise entitled to the same. The object of ration is to ensure correct and fair assessment of income, and any procedural lapse should not result in an undue burden on the taxpayer. It is well established that where a tax has already been deducted at source and deposited with the responding credit must be granted to the assessee, subject to verification of facts. Accordingly, we find no infirmity in the order of the learned CIT(A) in directing the Assessing Officer to verify the claim and grant the credit as per law. uphold the said direction, emphasizing that the Assessing Officer shall ensure due verification before granting the credit of TDS to the assessee. We order accordingly. The grounds of 4. In the result, app Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 19/02/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 5705/MUM/2024 In the result, appeal of the Revenue is dismissed. nounced in the open Court on 19/02/2025. Sd/- Sd/ (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Ebay International AG 4 ITA No. 5705/MUM/2024 eal of the Revenue is dismissed. /02/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "