DEEPAK KUMAR JAIN,MUZZAFFARNAGAR V. CPC, MUZZAFFARNAGAR

ITA 2947/DEL/2024

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22844 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2022-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: ANIL KUMAR JAIN
• Keywords: Opportunity of being heard; TDS; FORM 26AS

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI BEFORE SH. SUDHIR KUMAR, JUDICIAL MEMBER AND SH, NAVEEN CHANDRA ACCOUTANT MEMBER ITA No.2947/Del/2024 Assessment Year: 2022-23 Deepak Kumar Jain C/O Ganeshi Tent House 60/94, New Mandi Laxman Vihar Muzaffarnagar 251001 PAN No. ABTPJ4210 F Vs. ITO Ward-3(1)(2) Muzaffarnagar U.P. (APPELLANT) (RESPONDENT) Appellant by Sh. Anil Kumar Jain, Advocate Respondent by Sh. Rajesh Kumar Dhanesta Sr. DR. Date of hearing: 03/02/2025 Date of Pronouncement: 12/02/2025 ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Addl/JCIT (A) -4 Kolkata [hereinafter referred to as “CIT(A)”] vide order dated22.04.2024 pertaining to A.Y. 2022-23 pertaining to arises out of the assessment order dated02-03-2023 under section 2 143(1)of the Income Tax Act 1961 [hereinafter referred as ‘the Act’]. 2. The assessee has raised following grounds of appeal :- 1. The Ld. CIT(A) has erred in confirming the order of the CPC for not allowing the TDS credit of Rs.1231153 without any bases and without considering the reply filed u/s. 139 (9) o account of mismatch, without allowing proper opportunity. 2. The Ld. CIT(A) has erred in passing exparte order whereas the adjournment application filed on 18.04.2024 online has not been considered before passing the order 3. The authorities below has not appreciated that the appellant is following Mercantile system of accounting, and the Govt. Departments deduct TDS on the date of payment whereas the corresponding turnover is declared on the basses of billing and execution of work. 4. The order of Ld. CIT is against law, facts and circumstances of the case. 3. The brief facts of the case are that the assessee is engaged in the business of providing services in the nature of Tentage and catering under the trade name M/s Ganashi Tent House mainly to Government Departments. The firm has filed return of the income through e-filing portal on 18-10-2022 for A.Y.2022- 3 23 declaring total income of Rs 92,37,620/-. While computing the tax dues, the assessee claimed TDS of Rs 5691341/- for the A.Y. 202-23 at 92,37,620/- which was deducted by the payers from total professional receipts. The assessing officer (CPC) while processing the return of income disallowed credit of TDS at Rs 1231153/- holding the same as unmatched TDS. Aggrieved the order of the Assessing officer /CPC the assessee has preferred the appeal before the Ld. CIT(A), who vide his order dated 22-04-2024 dismissed the appeal against which the assessee is in appeal before the Tribunal. 4. The ld AR of the assessee has submitted that assessee is following accrual system of accounting whereas the Government Department are following cash system of accounting, deduct TDS and pay to the credit of the government in the F.Y. year of payment. He also submitted that the Ld. CIT(A) has passed the order without giving the opportunity of being heard. The ld. AR further submitted that TDS reflected in the Form 26AS of the assessee in the year of payment whereas, the corresponding income has already been declared by the assessee in the respective assessment years as per accrual basis of accounting. Summary of receipt and TDS thereon year-wise appears in the written submission which is reproduced herein. 4 5. The ld. AR next submitted that the similar issue has been decided by the Hon’ble ITAT Delhi in the case of Prakash Sunrise Healthcare Limited vs ITO ITA No. 778/Del/2022 and co-ordinate bench held that: “9. We find prima facie merit in the plea of the assessee assigning the reason or mismatch. We notice that the assessee has placed threadbare details of various patients availing services of the assessee nursing home through the deductor agencies. Therefore, on first principles, the TDS credit cannot, per se, be denied to the assessee whereas the TDS has been eventually deducted and deposited in the Government Treasury. The Revenue is under obligation to give suitable credit for such deduction either in the year in which the corresponding income has been declared or in the year in which TDS credit has been received in the Treasury. Thus, when seen in perspective, the claim of the assessee is in tune with the judgment of the Hon'ble Delhi High Court in Court On Its Own Motion (supra). Having come to this conclusion, however, the underlying factual details to demonstrate the inclusion of corresponding receipts in other years may need some verification by the Assessing Officer. Thus matter is remitted back to the file of Assessing Officer for ascertainment of factual assertions. The Assessing Officer shall grant credit of TDS deducted and claimed by the assessee on being satisfied with the fact that the corresponding income has been duly declared by the assessee in any of the assessment years. The matter is accordingly remitted to the file of the Assessing Officer for verification, if any, and for grant of TDS credit as 5 claimed. Needless to say reasonable opportunity shall be given to the assessee.” 6. The ld. DR for revenue on the other hand, relied upon the order of the CIT(A). We have heard the rival submission. It is a case of the assessee that assessee being a contractor, follows accrual method and deducted TDS in the year in which the payment made by government and entries are made in their books. The assessee thus stated that mismatch on account of TDS is beyond the control on the part of the assessee and such mismatch resulting from different accounting policies adopted by the assessee and deductors. 7. We find the merit in the plea of the assessee assigning the reason for mismatch. The impugned order was passed by the Ld. CIT(A) without giving the opportunity of being heard. The TDS credit cannot, be denied to the assessee where the TDS has been deducted and deposited in the Government Treasury. The Revenue is under obligation to give suitable credit for such deduction either in the year in which the corresponding income has been declared in the year in which TDS credit has been received in treasury. The case in hand is squarely covered of the Co-ordinate bench. Following the decision of the Hon’ble ITAT the matter is remitted back to the file of the Ld. CIT(A) who will 6 decide the matter after giving the opportunity of being heard to the assessee. 8. In the result the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 12.02.2025. Sd/- Sd/- (NAVEEN CHANDRA) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *NEHA, Sr. PS* Date:-12.02.2025 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "