Failure to Claim TDS Credit in Return: ITAT Upholds CIT(A) Decision to Allow Credit after Verification [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax(Appeals) [CIT(A)] decision to allow the Tax Deducted at Source (TDS) credit after verifying the corresponding income, despite the failure to claim it in the return.

The Revenue-appellant appealed against the order dated 10.07.2024, passed by CIT(A) for the Assessment Year 2022-23. In this case, Ravi Integrated Logistics(India) Pvt.Ltd., respondent-assessee,failed to claim the TDS credit in its return, even though it was reflected in the accounts and Form 26AS. As a result, the Centralized Processing Center (CPC) did not provide the TDS benefit.

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The respondent appealed to the CIT(A), who noted that the TDS was reflected in the audited financial statements and Form 26AS, but the assessee realized the mistake too late to revise the return.

The CIT(A) referred to a similar case where the ITAT allowed TDS credit despite an oversight. The CIT(A) concluded that the assessee should not be penalized for an inadvertent mistake and directed the Assessing Officer(AO) to allow the TDS credit after verifying the claim and corresponding income. The Revenue has appealed the order.

The two member bench comprising Vimal Kumar (Judicial Member) and Shamim Yahya (Accountant Member) heard the Departmental Representative (DR) and reviewed the records. Since the assessee did not appear despite notice, the tribunal proceeded ex-parte. It found that the CIT(A) had made a reasonable decision, correctly stating that technicalities should not prevent the assessee’s lawful rights.

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The CIT(A) noted that the claim was reflected in the accounts and Form 26AS and directed the AO to examine the TDS claim and verify if the corresponding income was reported in the return. The ITAT agreed with the  CIT(A)’s findings and affirmed the order.

In short,the appeal filed by the revenue was dismissed.

To Read the full text of the Order CLICK HERE

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