Kushal Navlakha, New Delhi V. DCIT CPC, New Delhi

ITA 1663/DEL/2020

AI Insights

The case revolves around the denial of TDS credit to the assessee, Kushal Navlakha, for the Assessment Year 2018-19. The TDS was deducted by Mr. Rajeev Dhingra, the tenant, from rent payments but was not deposited in the Government account. The AO disallowed the TDS credit, which was upheld by the CIT(A). The assessee contested that the CIT(A)'s decision was arbitrary and not in accordance with the law, arguing that the TDS should be credited despite non-deposition by the deductor. The Tribunal dismissed the appeal but instructed the AO not to pursue recovery of the tax, referencing a relevant CBDT circular.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 116124 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-07-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 06-10-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Corroborative evidences; TDS
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1663/Del/2020 Assessment Year: 2018-19 Kushal Navlakha, 5A/19, Ground Floor, Ansari Road, Darya Ganj, New Delhi-110002 PAN No.AAEPN3390E Vs DCIT CPC New Delhi (APPELLANT) (RESPONDENT) Appellant by Sh. Girish Gupta, CA Respondent by Sh. Vivek Vardhan, Sr DR Date of hearing: 17/07/2023 Date of Pronouncement: 17/07/2023 ORDER PER N. K. BILLAIYA, AM: This appeal by the assessee is preferred against the order of the CIT(A)-10, New Delhi dated 04.08.2020 pertaining to A.Y. 2018-19. 2. The grievance of the assessee read as under : 1. That in facts and circumstances of the case, the order passed u/s. 250(6) of the Act by the Ld. CIT(A)-10 against 2 the Assessee holding that the claim of TDS by the Assessee has been rightly disallowed by the DCIT (CPC) Bengaluru, is wrong, passed without following due process of law and in thus void ab initio, which needs to be struck down. 2. That in facts and circumstances of the case, the Ld. CIT(A) has wrongly held that the Assessee should follow up with the deductor and persuade the tax deducted at source to enable the Assessee to get the credit of tax deducted as this is illogical, without any sanctity of law and thus the disallowance of tax deducted, needs to be struck down. 3. That in facts and circumstances of the case, the Ld. CIT(A) has wrongly held that the Assessee has merely made assertions and does not have any corroborating document or any supporting evidences available with the Assessee to prove that the tenant of the Assessee deducted tax at source out of rent payments made to the Assessee as this is completely wrong and incorrect and thus the order of the CIT(A) needs to be struck down. Rs.52,200/- 4. That in facts and in circumstances of the case the order of the CIT(A), by holding that, both, deduction of tax and subsequent deposit of such tax by the deductor are mandatory to give the credit of tax to the deductee, is bad in law, incorrect and arbitrary and thus the disallowance needs to be struck down. 3 5. That in facts and in circumstances of the order of Ld. CIT(A) is unjust, incorrect and arbitrary as he has not followed the provisions of the Act and not followed various judicial precedents of various higher courts in true letter and spirit which are in favour of the Assessee and thus the order of the Ld. CIT(A) needs to be struck down. 6. That in facts and circumstances of the case the order of the Ld. CIT(A) is incorrect, unjust and bad in law as the disallowance of TDS is a debatable issue and the same cannot be disallowed in order u/s. 143(1) of the Act and thus the disallowance needs to be struck down. 7. The appellant craves leave to add, alter amend, vary, and/ or withdraw any or all of the above grounds of Appeal. 3. The sum and substance of the grievance of the assessee is that because the TDS deducted by the tenant amounting to Rs.52200/- was not deposited in the Government account the AO erred in recovering the amount from the assessee. 4. Briefly stated the facts of the case are that the assessee has let out its property to Mr. Rajeev Dhingra at a gross rent per month of Rs.43500/- totaling to Rs.522000/-on which Mr. Dhingra deducted tax at source @ 10% amounting to Rs.52200/-. It is an undisputed fact that Mr. Dhingra did not deposit this amount in the Government account and, therefore, the credit for TDS was denied by the AO. 4 5. On such facts we cannot direct the AO to give the credit of TDS the appeal of the assessee has to be dismissed. 6. However, in the interest of justice it would not be out of place to quote following CBDT circular :- 7. In the light of the aforementioned CBDT circular, though we have dismissed the appeal of the assessee, yet we direct the AO not to take any recovery action for the outstanding tax liability 5 keeping in mind the mandate of aforestated CBDT circular. With these directions the appeal is dismissed. 8. Decision announced in the open court on 17.07.2023. Sd/- Sd/- [ANUBHAV SHARMA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: .07.2023 *Neha* Copy forwarded to: 1. Appellant 2. Respondent 3. CITi 4. CIT(A) 5. DR Asst. Registrar ITAT, New Delhi