RISE WORLDWIDE LIMITED ,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 4(2)(1), MUMBAI

ITA 1749/MUM/2025

AI Insights

The case involves Rise Worldwide Ltd., the appellant, contesting the decision of the CIT(A) which upheld the action of the CPC, Bangalore, in not granting full credit for TDS deducted at source amounting to Rs. 11,10,863 for the assessment year 2017-18. The primary contention was that the TDS credit claimed related to income spread across multiple assessment years, and thus, should be allowed proportionately as per Rule 37BA of the Income-tax Rules, 1962. The CPC had initially restricted the TDS credit based on mismatches reported in Form 26AS and the return filed by the assessee. The CIT(A) dismissed the appeal on grounds that the assessee had not reconciled each instance of mismatch between the income offered and the corresponding TDS claim. The Tribunal found that the matter required proper verification of facts by the Assessing Officer and thus set aside the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397185 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HUSSAIN ANSARI
• Assessee Lawyers: NIMESH VORA
• Keywords: Set aside; Opportunity of being heard; TDS; FORM 26AS
• Section: 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 1749/MUM/2025 Assessment Year: 2017-18 Rise Worldwide Ltd., 3rd floor, Court House, Lokmanya Tilak Dhobi Talao, Mumbai-400002. Vs. Dy. CIT Circle-4(2)(1), Aayakar Bhavan, Maharashi Karve Road, Mumbai-400020. PAN NO. AALCS 6150 P Appellant Respondent Assessee by : Mr. Nimesh Vora Revenue by : Mr. Akhtar Hussain Ansari, Sr. DR Date of Hearing : 24/04/2025 Date of pronouncement : 29/05/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 17.01.2025 passed by the Ld. Additional Commissioner of Income-tax (Appeals) – 2, Guwahati [ in short the ld ‘CIT(A)’]for assessment year 2017-18, raising following grounds: On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals), ADDL/JCIT (A)-2 Guwahati {hereinafter referred to as CIT(A)}; 1. Erred in upholding the action of the CPC, Bangalore thereby not granting credit of tax deduc Rs. 11,10,863. 2. Failed to appreciate that the said TDS credit is either reflecting in Form 26AS of AY 2016 of which were submitted before the CIT(A) and income was offered 2. Briefly stated, facts of the case are that while processing the return of income u/s 143(1) of the Income ‘the Act’) the Central Processing Centre (CPC) restricted the claim of TDS credit of assessee Rs.2,68,18,119/- made intimation order passed u/s 143(1) of the Act the TDS credit allowed was short by a sum reproduced the ‘TDS was sent to the assessee for giving its comments order u/s 143(1) of the Act. and possible resolution for the mismatch. The relevant part of the said mismatch report “ SL No. Particulars 1. Credit available in Form 26AS but not given in the 1. Erred in upholding the action of the CPC, Bangalore thereby not granting credit of tax deducted at source to the extent of Rs. 11,10,863. 2. Failed to appreciate that the said TDS credit is either reflecting in Form 26AS of AY 2016-17 or AY 2018-19, details of which were submitted before the CIT(A) and income to tax. , facts of the case are that while processing the return of income u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) the Central Processing Centre (CPC) restricted the claim of of assessee to Rs.2,52,37,076/- as against claim made in the return of income. Thus intimation order passed u/s 143(1) of the Act the TDS credit allowed was short by a sum of Rs.15,81,043/-. The Ld. CIT(A) has ‘TDS mismatch report’ generated by the CPC was sent to the assessee for giving its comments before passing of order u/s 143(1) of the Act. The CPC also provided detailed reasons and possible resolution for the mismatch. The relevant part of the said mismatch report ( Table –C)is reproduced as under: Resolution Credit available in Form 26AS but not given in the 1a) Invalid TAN entered in the return: Flag is mentioned as 'N' in the column No.7 of Table Unmatched TDS and TCS Claimed in the Return, it implies that invalid TAN is quoted by you and in such cases the credit will not be matched with the claims. You are reques application for rectification online under section 154 by quoting the correct TAN under 3c(i) category mentioned below. (1b) SAT/AT details are entered wrongly: details entered in respect of Self Assessment Tax/Advance Ta payment is exactly the same as appearing in Form 26AS. Please ensure the amount claimed in the return is exactly Rise Worldwide Ltd. 2 ITA No. 1749/MUM/2025 1. Erred in upholding the action of the CPC, Bangalore thereby ted at source to the extent of 2. Failed to appreciate that the said TDS credit is either 19, details of which were submitted before the CIT(A) and income , facts of the case are that while processing the tax Act, 1961 (in short ‘the Act’) the Central Processing Centre (CPC) restricted the claim of as against claim of in the return of income. Thus, in the intimation order passed u/s 143(1) of the Act the TDS credit . The Ld. CIT(A) has generated by the CPC, which before passing of The CPC also provided detailed reasons and possible resolution for the mismatch. The relevant part of the s under: In case Valid TAN Flag is mentioned as 'N' in the column No.7 of Table-B \"Details of Unmatched TDS and TCS Claimed in the Return, it implies that invalid TAN is quoted by you and in such cases the credit will not be matched with the claims. You are requested to file an application for rectification online under section 154 by quoting the correct TAN under 3c(i) category mentioned below. 1b) SAT/AT details are entered wrongly: Please check the details entered in respect of Self Assessment Tax/Advance Tax payment is exactly the same as appearing in Form 26AS. Please ensure the amount claimed in the return is exactly 3. Before the Learned CIT(A), the assessee contended that the primary reason for the mismatch in TDS credit was the non of certain TDS amounts in earlier years, which were brought forward and claimed in the assessment year under consideration, intimation order 2. Credit Not available in Form 26AS Before the Learned CIT(A), the assessee contended that the primary reason for the mismatch in TDS credit was the non of certain TDS amounts in earlier years, which were brought forward and claimed in the assessment year under consideration, matched to the amount in the payment challan. Do not round off the amounts. Please ensure the date is entered in DD/MM/YYYY format. You are requested to file an application for rectification online under section 154 by quoting the correct CIN details (BSR code/ Date of deposit/ Challan Sequence number) and amount under 4c(i) category mentioned below. Ensure that all the above details are exactly same as mentioned in Form 26AS. (1c) \"No data error in TAN/SAT/AT details: no data entry error (as mentioned in 1a and 1b above) and the same matches with 26AS, you are requires to file a rectification under 154 online under 4c(ii) category given below. (1d) \"No data error in particulars entered in TDS/TCS schedule\": Please ensure that claim for the TDS/TCS are consistent with the claim made in schedule Part B same matches with 26 AS. In case, you are required to make correction in schedule Part B-TTI of the Return, file online rectification under section154 under 4c(ii) category mentioned below. Credit Not available in (2a) Mismatch of TDS/TCS amounts claimed compared to Form 25AS: As the credit not appearing in 26AS, you should take up the matter of mismatch in the TDS/TCS, with your Deductor / Collector so that corrective action can be taken by the Deductor / Collector. After the correction is done and the corrected statement filed by your deductor the credit will appear in 26AS. You can apply for online rectification under section 154 to get the benefit of unmatched credits under 4c(iii) category given below. (2b) Mismatch of SAT/AT: In case of mismatch of SAT/AT, please follow up with the back where payment was made or the Jurisdictional Assessing Officer. After the correction is done and the corrected statement filed by your Bank / Jurisdictional Assessing Officer, the credit will appear in 26AS. You can apply for online rectification under section 154 to get the benefit of unmatched credits under 4c(ii) category given below. Ensure that all the above details are exactly same as mentioned in Form 26AS. For further information/guidance on Challan correction logon to www.incometaxindia.gov.in - Correction Mechanism. Rise Worldwide Ltd. 3 ITA No. 1749/MUM/2025 ” Before the Learned CIT(A), the assessee contended that the primary reason for the mismatch in TDS credit was the non-claim of certain TDS amounts in earlier years, which were brought forward and claimed in the assessment year under consideration, matched to the amount in the payment challan. Do not round off Please ensure the date is entered in DD/MM/YYYY format. equested to file an application for rectification online under section 154 by quoting the correct CIN details (BSR code/ Date of deposit/ Challan Sequence number) and amount under 4c(i) category mentioned below. Ensure that all the above y same as mentioned in Form 26AS. 1c) \"No data error in TAN/SAT/AT details: In case, there is no data entry error (as mentioned in 1a and 1b above) and the same matches with 26AS, you are requires to file a rectification under 154 online under 4c(ii) category given below. 1d) \"No data error in particulars entered in TDS/TCS Please ensure that claim for the TDS/TCS are consistent with the claim made in schedule Part B-TTI and the same matches with 26 AS. In case, you are required to make TTI of the Return, file online section154 under 4c(ii) category mentioned (2a) Mismatch of TDS/TCS amounts claimed compared to As the credit not appearing in 26AS, you should take up the matter of mismatch in the TDS/TCS, with your Deductor / Collector so that corrective action can be taken by the Deductor / Collector. After the correction is done and the d by your deductor the credit will appear in 26AS. You can apply for online rectification under section 154 to get the benefit of unmatched credits under 4c(iii) category (2b) Mismatch of SAT/AT: In case of mismatch of SAT/AT, with the back where payment was made or the Jurisdictional Assessing Officer. After the correction is done and the corrected statement filed by your Bank / Jurisdictional Assessing Officer, the credit will appear in 26AS. You can apply ation under section 154 to get the benefit of unmatched credits under 4c(ii) category given below. Ensure that all the above details are exactly same as mentioned in For further information/guidance on Challan correction - please Select Challan since the corresponding income had not been offered to tax in the earlier years but was offered in the relevant assessment year. By way of illustration, the assessee highlighted that an amount of Rs. 62,975/–, which had been shown as TDS brought forward from the earlier year in the return of income, nevertheless appeared as a mismatch in the impugned intimation. It was further submitted that, pursuant to a reconciliation of the updated Form 26AS with the corresponding party accounts of TDS or the write forgone TDS credit of Rs. 6,80,180/ Rs. 15,81,043/– as reflected in the impugned intimation. Accordingly, the assessee restricted its claim and sought credit the balance amount of Rs. 9,00,863/ 3.1 The Learned CIT(A), however, dismissed the assessee’s appeal primarily on the ground that the assessee had not reconciled each instance of mismatch between the income offered and the corresponding TDS claim, as section 199 read with rule 37BA of the Income 4. We have heard the rival submissions and perused the material available on record. intimation under section 14 15,81,043/- in respect of tax deducted at source (TDS). Before the Learned CIT(A), the assessee restricted its claim to Rs. 9,00,863/ submitting that the balance amount had either been realized or corresponding income had not been offered to tax in the earlier years but was offered in the relevant assessment year. By way of illustration, the assessee highlighted that an amount of Rs. , which had been shown as TDS brought forward from the rlier year in the return of income, nevertheless appeared as a mismatch in the impugned intimation. It was further submitted that, pursuant to a reconciliation of the updated Form 26AS with the corresponding party accounts — owing to either the realization of TDS or the write-off of balances — the assessee voluntarily forgone TDS credit of Rs. 6,80,180/– out of the total short credit of as reflected in the impugned intimation. Accordingly, the assessee restricted its claim and sought credit the balance amount of Rs. 9,00,863/–. The Learned CIT(A), however, dismissed the assessee’s appeal primarily on the ground that the assessee had not reconciled each instance of mismatch between the income offered and the corresponding TDS claim, as mandated under the provisions of section 199 read with rule 37BA of the Income-tax Rules, 1962. We have heard the rival submissions and perused the material The Centralized Processing Centre (CPC) in its intimation under section 143(1) granted short credit of Rs. in respect of tax deducted at source (TDS). Before the Learned CIT(A), the assessee restricted its claim to Rs. 9,00,863/ submitting that the balance amount had either been realized or Rise Worldwide Ltd. 4 ITA No. 1749/MUM/2025 corresponding income had not been offered to tax in the earlier years but was offered in the relevant assessment year. By way of illustration, the assessee highlighted that an amount of Rs. , which had been shown as TDS brought forward from the rlier year in the return of income, nevertheless appeared as a mismatch in the impugned intimation. It was further submitted that, pursuant to a reconciliation of the updated Form 26AS with owing to either the realization the assessee voluntarily out of the total short credit of as reflected in the impugned intimation. Accordingly, the assessee restricted its claim and sought credit for The Learned CIT(A), however, dismissed the assessee’s appeal primarily on the ground that the assessee had not reconciled each instance of mismatch between the income offered and the mandated under the provisions of tax Rules, 1962. We have heard the rival submissions and perused the material The Centralized Processing Centre (CPC) in its 3(1) granted short credit of Rs. in respect of tax deducted at source (TDS). Before the Learned CIT(A), the assessee restricted its claim to Rs. 9,00,863/-, submitting that the balance amount had either been realized or written off and, hence, grounds raised before us, the assessee has now sought TDS credit of Rs. 11,10,863/-. 4.1 The primary reason for the mismatch, as explained by the assessee, is that the TDS credit claimed relates to income spread across multiple assessment years. Rule 37BA of the Income Rules, 1962 provides for such a situation. It stipulates that where tax has been deducted at source and paid to the Central Government, and the income is assessable over more than one year, credit for such tax shall be allowed across the years in the same proportion in which the income is assessable. 4.2 In such a case, the assessee is required to furnish details of the income offered to tax in the assessment year under consideration, along with the c 26AS of earlier years, credit for which was not claimed in those earlier years. It is also incumbent upon the Assessing Officer to verify such details and examine each instance of mismatch, including the TDS already claim to the current assessment year. involves verification of facts by the Assessing Officer. Rejection of the assessee’s claim without proper verification leads to unnecessary multiplicity of pro circumstances of the case, we deem it appropriate to set aside the order of the Learned CIT(A) and restore the matter to the file of the written off and, hence, was not being pursued. However, in the grounds raised before us, the assessee has now sought TDS credit The primary reason for the mismatch, as explained by the assessee, is that the TDS credit claimed relates to income spread s multiple assessment years. Rule 37BA of the Income Rules, 1962 provides for such a situation. It stipulates that where tax has been deducted at source and paid to the Central Government, and the income is assessable over more than one year, r such tax shall be allowed across the years in the same proportion in which the income is assessable. In such a case, the assessee is required to furnish details of the income offered to tax in the assessment year under consideration, along with the corresponding TDS reflected in Form 26AS of earlier years, credit for which was not claimed in those earlier years. It is also incumbent upon the Assessing Officer to verify such details and examine each instance of mismatch, including the TDS already claimed and the portion carried forward to the current assessment year. Thus, the dispute essentially involves verification of facts by the Assessing Officer. Rejection of the assessee’s claim without proper verification leads to unnecessary multiplicity of proceedings. In the facts and circumstances of the case, we deem it appropriate to set aside the order of the Learned CIT(A) and restore the matter to the file of the Rise Worldwide Ltd. 5 ITA No. 1749/MUM/2025 was not being pursued. However, in the grounds raised before us, the assessee has now sought TDS credit The primary reason for the mismatch, as explained by the assessee, is that the TDS credit claimed relates to income spread s multiple assessment years. Rule 37BA of the Income-tax Rules, 1962 provides for such a situation. It stipulates that where tax has been deducted at source and paid to the Central Government, and the income is assessable over more than one year, r such tax shall be allowed across the years in the same In such a case, the assessee is required to furnish details of the income offered to tax in the assessment year under orresponding TDS reflected in Form 26AS of earlier years, credit for which was not claimed in those earlier years. It is also incumbent upon the Assessing Officer to verify such details and examine each instance of mismatch, ed and the portion carried forward Thus, the dispute essentially involves verification of facts by the Assessing Officer. Rejection of the assessee’s claim without proper verification leads to ceedings. In the facts and circumstances of the case, we deem it appropriate to set aside the order of the Learned CIT(A) and restore the matter to the file of the Assessing Officer for proper verification of the assessee’s claim. The Assessing Officer sha section 199 read with Rule 37BA of the Rules and allow credit of TDS, if found eligible, in accordance with law. afforded a reasonable opportunity of being heard, including through physical mode of hearing, if permissible under the applicable procedures. We order accordingly. allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronoun 1963 by way of placi Sd/- (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 29/05/2025 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// Assessing Officer for proper verification of the assessee’s claim. The Assessing Officer shall verify the details in light of the provisions of section 199 read with Rule 37BA of the Rules and allow credit of TDS, if found eligible, in accordance with law. The assessee shall be afforded a reasonable opportunity of being heard, including through hysical mode of hearing, if permissible under the applicable We order accordingly. The grounds of the appeal are for statistical purposes. In the result, the appeal of the assessee is allowed for Order pronounced under Rule 34(4) of the ITAT Rules, 1963 by way of placing result on notice board on 29 Sd/ (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Rise Worldwide Ltd. 6 ITA No. 1749/MUM/2025 Assessing Officer for proper verification of the assessee’s claim. The ll verify the details in light of the provisions of section 199 read with Rule 37BA of the Rules and allow credit of The assessee shall be afforded a reasonable opportunity of being heard, including through hysical mode of hearing, if permissible under the applicable The grounds of the appeal are In the result, the appeal of the assessee is allowed for ced under Rule 34(4) of the ITAT Rules, ng result on notice board on 29.05.2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "