SWIFT INDIA CORPORATE SERVICES LLP,MUMBAI V. DCIT, KAUTILYA BHAVAN

ITA 3642/MUM/2024

AI Insights

The case involves Swift India Corporate Services LLP, which appealed against the order of the CIT (Appeals) concerning the short-grant of TDS credit and the charging of interest under Sections 234B and 234C of the Income Tax Act for the Assessment Year 2022-23. The appellant, a Limited Liability Partnership engaged in corporate advisory services, faced a mismatch in the TDS credit claimed and the amount allowed by the AO, leading to an appeal. The CIT (A) dismissed the appellant's appeal due to non-submission of relevant details, which the appellant contested, providing a reconciliation statement and arguing that the TDS credits were overlapping across different assessment years due to the nature of their business and the timing of TDS deductions by vendors. The Tribunal found merit in the appellant's arguments and directed a re-examination of the TDS credit issue by the AO.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470631 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-09-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 17-07-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Assessee Lawyers: CHAITANYA JOSHI; BHAVYA JAIN
• Keywords: Set aside; TDS; FORM 26AS
• Section: 250; 143(1); 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No.3642/M/2024 Assessment Year: 2022-23 Swift India Corporate Services LLP 91-92B, Mittal Court, Nariman Point, Mumbai – 400021. PAN: ADDFS7861H Vs. DCIT, ITO Circle 26(1) Mumbai- 400051. (Appellant) (Respondent) Present for : Assessee by : Shri Chaitanya Joshi & Bhavya Jain- A.R. Revenue by : None Date of Hearing : 02 . 09 . 2024 Date of Pronouncement : 21 . 10 . 2024 O R D E R Per : Ratnesh Nandan Sahay, Accountant Member: 1. This appeal has been filed by the appellant against the Order of the Ld. CIT (Appeals) passed u/s. 250 of the Income Tax Act [the ‘Act’ in short] Page | 2 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 2 vide DIN & Order No. ITBA/APL/S/250/2024-25/1064049241(1) Dated 12/04/2024 for the Assessment Year 2022-23. 2. Following grounds of appeal have been raised by the appellant: “GROUND NO. I: SHORT-GRANT OF CREDIT OF TDS AMOUNTING TO RS.3,48,134/- : 1. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the decision of the Ld. AO in not granting TDS credit to the extent of Rs.3,48,134/- 2. The Appellant prays that it be granted balance credit of TDS of Rs.3,48,134/-. 3. Without prejudice, a direction be given to grant the credit in the year in which TDS credit is reflected in Form 26AS. GROUND NO. II: CHARGING INTEREST UNDER SECTION 234B AND 234C OF THE ACT: 1. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the decision of Ld. AO in charging interest under Sections 234B and 234C of the Act. 2. The Appellant prays that the interest chargeable under Sections 2348 and 234C of the Act be accordingly corrected/reduced. GENERAL The Appellant Company craves leave to add, alter and/or amend or delete all or any of the grounds of appeal at the time of hearing.” 3. Mainly, there are two grounds of appeal one relating to the short-grant of credit of TDS and another is charging of interest u/s. 234B and 234C of the Income Tax Act. The facts of the case, in brief, are that the appellant is a Limited Liability Partnership (LLP) firm engaged in providing corporate advisory services. The appellant has filed its Page | 3 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 3 original return of income on 21/10/2022 declaring total income of Rs.4,11,47,310/-. The return of income was processed u/s. 143(1) by the ADIT, CPC, Bangalore on a sum of total income of Rs.4,11,47,310/-. However, while processing the return of income, the TDS credit of Rs.3,93,475/- was not allowed with the following comments “mismatch between tax credits claimed and allowed for Rs.3,93,475/-“. 4. Aggrieved by the order of the AO (CPC), the appellant filed the appeal before the Ld. Commissioner of Income Tax appeal. The Ld. CIT (A) vide the impugned order dismissed the appeal of the assessee on the ground that despite numerous notices were issued to the appellant on 13/12/2023, 26/02/2024 and 13/03/2024, it could not produced any relevant details in support of the claim of TDS. 5. During the appellate proceedings before us, the appellant had submitted as under: “In the case of Swift India Corporate Services LLP (the Appellant') ITA No. Assessment Year Appeal By ITA No. 3468/MUM/2024 2020-21 Assessee ITA No. 3642/MUM/2024 2022-23 Assessee ITA No. 3469/MUM/2024 2023-24 Assessee Page | 4 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 4 Brief Synopsis The captioned matters were heard on September 02, 2024 before Your Honours. At the conclusion of the said hearing, the Hon'ble Bench has directed to file a brief synopsis, the same is being filed under this note  The sole and common issue involved in the captioned appeals is regarding short credit of TDS on account of TDS mismatch in Form 26AS. All these appeals arise from the initiation u/s. 143(1) of the Income-tax Act, 1961 (the Act').  The Appellant is a Limited Liability Partnership Firm, engaged in the business of corporate consultation and advisory services. The revenue from the said business activity is recognised once the service is rendered and invoice is booked and the same is accordingly offered for taxation.  The table below captures the summary of TDS credit claimed in Appellant's return of income (\"ROI\") and the TDS credit granted by the CPC in the impugned intimations: Assessment Year Amount of TDS Credit claimed in the ROI Amount of TDS Credit granted by CPC TDS credit short granted 2020-21 52,21,155 48,08,241 4,12,914 2022-23 63,20,050 59,26,575 3,93,475 2023-24 87,10,204 82,35,435 4,74,769 Page | 5 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 5  The major reasons for mismatch in TDS credit are as under: i. TDS credit is appearing in Form 26AS of subsequent years and hence there is overlap of TDS credit between AY 2020- 21, AY 2022-23 and AY 2023-24. (Please refer Factual Paper Book Pg 90 of ITA No. 3468/MUM/2024 filed for AY 2020- 21). ii. Some of the vendors account for payments on cash basis and hence they make TDS deduction at the time of actual payment and however the Appellant has accounted for the income on mercantile basis and hence there will be overlap of TDS credit over different years. (Please refer Factual Paper Book Pg 90 of ITA No. 3468/MUM/2024) iii. Failure on the part of some of the vendors while filing their TDS return to disclose TDS credit on transactions pertaining to the Appellant. (Please refer Factual Paper Book Pg 90 of ITA No. 3468/MUM/2024)  Ld. CIT(A) has, although stated that the Appellant has filed its submissions on 22/09/2022, has wrongly stated that the Appellant has not filed any reconciliation. This is fact is incorrect in light of the reconciliation statement filed alongwith Page | 6 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 6 the submissions which have been reproduced in the order of the Id. CIT(A) (Reconciliation statement is at Pg. 90 of the FPB).  As is evident from the said reconciliation statement, there is an overlap of TDS Credits across different years and the same needs to be granted for the correct assessment year in which the Appellant has offered the corresponding income for tax in the return of income which will be in line with the provisions of s. 199 of the Act read with Rule 37BA.  In view of the foregoing, it is most humbly submitted that the order of the Id. CIT(A) for all 3 years be quashed and the matters be sent back to the file of the Id. Jurisdictional Assessing Officer for verification of the necessary details and grant the correct TDS credit for respective assessment year.” 6. We have considered the facts of the case and the impugned order and it would be in the interest of the justice that the claim of the appellant in all the three assessment years are considered in view of the submissions made by the appellant. We, therefore, set aside the order of the Ld. CIT (A) and restore the file back to the Ld. AO to verify the claim of the appellant after taking into consideration all the relevant details/documents submitted by the appellant. The appellant is also directed to produce all relevant details before the Ld. AO to make Page | 7 ITA No.3642/MUM/2024 Swift India Corporate Services LLP; A. Y.2022-23 7 necessary verifications into the claims of the appellant and allowed the TDS credit accordingly. 7. In the result, the appeal is allowed for statistical purpose. Order pronounced in the open court on 21.10.2024. Sd/- Sd/- NARENDER KUMAR CHOUDHRY RATNESH NANDAN SAHAY JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 21.10.2024. Snehal C. Ayare, Stenographer Copy to:The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "