MUTHUSWAMY NAGARAJAN IYER,MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI

ITA 4552/MUM/2025

AI Insights

The case involves Muthuswamy Nagarajan Iyer, a salaried employee of Karvy Stock Broking Ltd, who appealed against the order of the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2021-22. The primary issue was the dismissal of his appeal by the CIT(A) due to a delay in filing, which the Tribunal later condoned based on the principles of substantial justice over technicalities. The core dispute revolved around the denial of TDS credit by the AO, as the amount was not reflected in form 26AS. The Tribunal found merit in the assessee's claim that the denial of TDS credit, despite its deduction by the employer, would cause undue hardship and amount to penalizing the assessee for an act beyond his control.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782919 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2021-2022
• Appeal Filed On: 16-07-2025
• Other Referred Cases: Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADESH RAI; VIRTUALLY
• Assessee Lawyers: NISHIT GANDHI; JUSTIFIABLY; PROPERLY EXPLAINING
• Keywords: TDS; FORM 26AS

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 4552/Mum/2025 A.Ys: 2021-22 Muthuswamy Nagarajan Iyer 1103, Swati Sadan Alliance, Indraprastha Park, 90 Feet Road, Mulund (E), PAN – AAHPI8483J Vs PCIT Kautilya Bhavan, BKC Bandra (E), Mumbai (Appellant) (Respondent) Assessee by Shri Nishit Gandhi Revenue by Shri Adesh Rai, Sr. AR (Virtually) Date of Hearing 02.09.2025 Date of Pronouncement 30.10.2025 ORDER PER SANDEEP GOSAIN, JM: This appeal has been filed by the assessee challenging the impugned order dated 22.05.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2021- 22. 2. At the outset, I noticed that the appeal of the assessee was dismissed by Ld. CIT(A) by not condoning the delay in filing the Appeal. Printed from counselvise.com 2 ITA No. 5370/Mum/2025 Dhanbir Suri,. Mumbai. 3. I have heard the counsels for both the parties and perused the material place on record, considering the entire factual position as explained before me and also keeping in view, the principles laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that were substantial justice is pitted against technicalities of non-deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which occurred in filing the appeal and construing the expression \"sufficient cause\" liberally I am inclined to condone the delay in filing the appeal before Ld. CIT(A). 4. From the records, I noticed that as per the submissions of the assessee, he was a salaried employee of Karvy Stock Broking Ltd and had filed its return of income for the year under consideration declaring Rs.38,70,910/- on which Income Tax of Rs.9,74,007 was payable out of which Rs. 9,69,825/- was paid through ITTDS on salary deducted by the employer i.e Karvy Stock Broking Ltd . Since the employer of the assessee had deducted TDS, in this regard copies of payslips evidencing deduction of income tax by Karvy Stock Broking Ltd have been placed Printed from counselvise.com 3 ITA No. 5370/Mum/2025 Dhanbir Suri,. Mumbai. on record. Therefore, as per assessee, after adjusting the amount deducted by the employer, the assessee had also paid balance amount of Rs.44,150/- vide Challan. 5. After having gone through the facts of the case and also hearing the parties, I found that AO disallowed the entire claim of TDS credit as the said amount was not updated in form 26AS therefore after analysing the documents placed on record and the arguments put forth by the assessee, I am of the view that assessee is entitled for the TDS credit already deducted by the employer Karvy Stock Broking Ltd and the denial of such credit would cause undue hardship and amounts to penalising the assessee for an Act beyond his control. Therefore in my view the ends of justice would be met, in case the matter is restored back to the file of AO for limited purpose of verification regarding the depositing of the deducted TDS by the employer with the Central Government and thereafter to allow credit to the assessee. Therefore, matter be restored back to AO with the above directions. 6. Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the AO independently in accordance with law. Printed from counselvise.com 4 ITA No. 5370/Mum/2025 Dhanbir Suri,. Mumbai. 7. In the result the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 30/10/2025 Sd/- (SANDEEP GOSAIN) (JUDICIAL MEMBER) Mumbai: Dated: 30/10/2025 KRK, Sr. PS. Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "