VANITABEN GAMALSINGH SOLANKI,SURAT V. INCOME TAX OFFICER, WARD 2(3)(4), SURAT

ITA 395/SRT/2023

AI Insights

The case involves Vanitaben Gamalsingh Solanki, the appellant, who contested the decision of the Income Tax Officer (ITO), Ward-2(3)(4), Surat, regarding the non-allowance of TDS credit for the assessment year 2016-17. The TDS was deducted on the sale of immovable property, and although it was reflected in Form 26AS, the credit was not allowed in the relevant assessment year. The Commissioner of Income Tax (Appeals) partly allowed the appeal, directing the AO to verify and allow the TDS credit in the subsequent assessment year, 2018-19. The Tribunal upheld the CIT(A)'s decision but directed specific actions regarding the TDS credit for statistical purposes.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473294 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 01-06-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVISH BHATT
• Assessee Lawyers: MEHUL SHAH
• Keywords: TDS; FORM 26AS
• Section: 250; 154; 143(1)

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.395/SRT/2023 Assessment Year: (2016-17) (Physical Hearing) Vanitaben Gamalsingh Solanki, 1, Chandramani Society, Udhna Magdalla Road, Bhatar Road, Surat - 395007 Vs. The ITO, Ward – 2(3)(4), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: ADEPS8938C (Appellant) (Respondent) Appellant by Shri Mehul Shah, CA Respondent by Shri Ravish Bhatt, Sr. DR Date of Hearing 11/11/2024 Date of Pronouncement 28/11/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 03.04.2023 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2016-17. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned CIT(A) has erred in confirming the action of the CPC in not rectifying the mistake apparent from record u/s 154. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of CPC in disallowing the credit of TDS of Rs.4,50,000/- even though the same was reflected in Form 26AS. 2 ITA No.395/SRT/2023/AY.2016-17 Vanitaben Gamalsingh Solanki 3. It is therefore prayed that disallowance made by CPC and confirmed by CIT(A) may please be deleted. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. All three grounds of appeal raised by the assessee are inter-related. Brief facts of the case are that the assessee filed her return of income for AY.2018-19 on 03.03.2018, declaring total income of Rs.6,40,220/-. The assessee had claimed Rs.4,57,980/- as refund after credit of TDS, amounting to Rs.5,09,477/-. During the assessment year, the assessee had shown Rs.3,47,558/- and Rs.3,02,662/- as income from house property and income from other sources respectively. The DCIT, CPC, Bengaluru did not allow the credit of TDS of Rs.5,09,477/- through the same was reflected in Form 26AS. The assessee had requested for online rectification dated 08.04.2019 which was rejected by the CPC vide order u/s 154 dated 28.06.2019. Therefore, no credit of the TDS had been given in the order u/s 154 r.w.s. 143(1) of the Act for AY.2016-17. 4. The assessee had sold an immovable property at Rs.13,51,40,000/- and declared long-term capital gain (LTCG) at Rs.3,29,57,386/-. The assessee received sale consideration of Rs.4,50,00,000/- for AY.2016-17 on which TDS at Rs.4,50,000/- was deducted u/s 194I of the Act by purchaser i.e., Happy Home Infra Tech. Further, on perusal of Form 26AS, the TDS u/s 194I of the Act to the sum of Rs.24,959/- was deducted on the receipt of Rs.2,49,391/- and the TDS u/s 194I of the Act, to the sum of Rs.34,518/-, was deducted on 3 ITA No.395/SRT/2023/AY.2016-17 Vanitaben Gamalsingh Solanki receipt of Rs.2,45,125/-. The credit for TDS of Rs.4,50,000/- has not been allowed in AY.2016-17. 5. Aggrieved by the order of CPC, Bengaluru, the assessee filed the appeal before CIT(A). The CIT(A) had given opportunity to the assessee to submit details before him. He had issued three notices for fixing date of hearing on 12.02.2021, 17.08.2022 and 23.03.2023. The reply of the appellant is at para 6.1 (pages 3 to 7) of the appellate order. The CIT(A) observed that AO, CPC has not allowed the claim of the appellant in respect of TDS of Rs.5,09,477/-. As per Rule 37BA(3) of the Income-tax Rules, TDS credit can be given only for those receipts, which are offered to tax in the relevant assessment year. He further observed that TDS corresponding to such income can be claimed only in the year in which such income is offered for tax. It is nowhere mentioned in the section that the same should be claimed by the payee in the year of its deduction itself. He rejected the contention of the assessee and direct to AO to allow credit for such TDS amount of Rs.4,50,000/- in the AY.2018-19. Regarding TDS of Rs.59,447/-, the CIT(A) held that the appellant is entitled to credit for TDS deducted by the deductor. He directed to AO to verify the claim of the appellant from the records and allow claim of the appellant after verification. Hence, the CIT(A) partly allowed the appeal of the assessee. 6. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The Learned Authorized Representative (Ld. AR) of the assessee submitted a paper book containing at pages 1 to 78. The Ld. AR submitted 4 ITA No.395/SRT/2023/AY.2016-17 Vanitaben Gamalsingh Solanki the acknowledgment of return of income along with computation of income, Form 26AS, intimation order for AY.2016-17, dated 27.03.2019, rectification order for AY.2016-17 dated 28.06.2019. He also submitted Form 26AS for AY.2017-18 and intimation order for AY.2017-18 dated 01.01.2018. He further submitted acknowledgment of return of income along with computation of income for AY.2018-19, Form 26AS for AY.2018- 19, intimation order for AY.2018-19 dated 01.05.2019, acknowledgment of written submission dated 15.03.02021 and written submission before CIT(A) dated 15.03.2021. The Ld. AR submitted that intimation u/s 143(1) does not contain any reason for disallowing credit of TDS. No show cause notice was issued before passing intimation order u/s 143(1) of the Act. In the alternative, he requested to allow TDS credit of Rs.4,50,000/- appearing in Form 26AS for AY, which is not disputed in FY.2018-19 and the AO should be directed accordingly. 7. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) of the revenue supported the order of lower authorities. He submitted that the order of CIT(A) is in accordance with law and he has already directed AO to allow credit for such amount in AY.2018-19. 8. We have heard both the parties and perused the materials available on record. The appellant has filed appeal before CIT(A) against the order u/s 154 of the Act dated 28.06.2019 for AY.2016-17. The two grounds before CIT(A) were in respect of the action of DCIT, CPC in not rectifying the mistake apparent from record u/s 154 of the Act and not giving credit of 5 ITA No.395/SRT/2023/AY.2016-17 Vanitaben Gamalsingh Solanki TDS of Rs.5,12,615/- in AY.2016-17. We find that the CIT(A) has discussed in detail the facts of the case and passed a speaking order allowing the appeal of assessee partly. The assessee had sold immovable property in FY.2017-18 (AY.2018-19) for total consideration of Rs.13,51,40,000/- and offered long- term capital gain of Rs.3,29,57,386/-. The appellant had, however, received sale consideration of Rs.4,50,00,000/-, Rs.4,00,000/- and Rs.8,61,40,000/- in AYs.2016-17, 2017-18 and 2018-19 respectively. TDS of Rs.4,50,000/-, Rs.40,000/- and Rs.8,61,400/- were deducted by the purchaser, i.e., M/s Happy Home Infra Tech. As per Rule 37BA(3) of the Income-tax Rule, 1962 “(3)(i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.” In the instant case, the assessee has declared capital gain of Rs.3,29,57,386/- in FY.2017-18 (AY.2018-19). Though the payments were received in three years, but credit for the TDS u/s 194IA deducted by the purchaser, M/s Happy Home Infra Tech, can be allowed only in AY.2018-19. Therefore, claim to allow credit of TDS of Rs.4,50,000/- in AY.2016-17 is not in accordance with the clear provisions of the Act. The CIT(A) has rightly rejected the ground of the assessee for AY.2016-17. However, he has directed AO to allow credit of such TDS amount of Rs.4,50,000/- in AY.2018-19, which is correct. We direct the AO to withdraw credit of TDS of Rs.4,50,000/- from AY.2016-17, if the same has been allowed, after due verification by AO. The AO is further directed to allow credit of TDS of Rs.4,50,000/- in AY.2018-19. This ground is allowed for statistical purpose. 6 ITA No.395/SRT/2023/AY.2016-17 Vanitaben Gamalsingh Solanki 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order is pronounced in the open court on 28/11/2024. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 28/11/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "