The Delhi High Court set aside the reassessment order passed without considering rectification made on Tax Deducted at Source (TDS) return.
Siemens Industry Software, the petitioner’s grievance is that because of the initial error in the return filed concerning tax deducted at source, [i.e., in Form 26Q], by an entity going by the name, Axiscades Engineering Technologies Limited [“AETL”], the reassessment proceeding was triggered against the petitioner.
As per Section 147 of the Income Tax Act, 1961, the Income Tax Department has the power to reassess an individual’s previously filed income tax returns. The Assessing Officer could pick your income tax return for reassessment subject to some pre-defined criteria by sending a notice under section 148 for Income Escaping Assessment.
Section 148 of the Income Tax Act 1961 gives authority to the Assessing Officer to send notice to a taxpayer whose income has not been properly assessed. This implies that if the Assessing Officer suspects that a taxpayer has not disclosed complete income or has provided an inaccurate representation of it, officers can commence proceedings under this section.
The incorrect TDS return showed that the petitioner had received an amount equivalent to Rs.1,09,94,821/- from AETL. This was an error, given the fact that the entity which received money from AETL was Siemens Industry Software (India) Pvt. Ltd. [“SISPL”]. Consequently, the rectification and/or revision in the TDS return submitted by AETL was carried out.
Mr Vishal Kalra, who appeared on behalf of the petitioner, submitted that the revised Form 26AS, which was downloaded by the petitioner on 24.04.2023, discloses that the error has been corrected.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia set aside the impugned orders and notices.
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