ITAT Upholds ₹168.61 Crore TDS Credit Due to Form 26AS Discrepancy, Directs AO to Verify Income [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision allowing Tax Deducted at Source(TDS) credit of ₹168.61 crore, noting discrepancies in Form 26AS due to delayed TDS payments and revised filings, and directed the Assessing Officer (AO) to verify the credit.

The Revenue-appellant appealed against the order dated 31.03.2024, for AY 2019-20, passed by the CIT(A), challenging the AO’s order  under Section 154 of the Act.In this case,Deendayal Port Authority,respondent-assessee,claimed TDS credit of ₹165.66 crore in its return, but the updated Form 26AS showed ₹167.86 crore. It filed a rectification application under Section 154, which the AO rejected on 11.08.2022, restricting the credit to the original amount.

On appeal, the CIT(A) allowed increased credit of ₹168.61 crore, noting the discrepancy arose from delayed TDS payments and revised Form 26Q filings by Port users, and directed the AO to verify and grant credit accordingly.

Law and Procedure for Filing of Appeals

During the hearing, the Departmental Representative (DR) accepted the TDS credit determined by the CIT(A) and requested the matter be sent to the AO for verification and compliance. The assessee’s representative confirmed that the related revenue had already been offered for taxation.

The two member bench comprising Suchitra Kamble(Judicial Member) and Makarand V.Mahadeokar(Accountant Member) upheld the CIT(A)’s order, allowing the TDS credit based on the updated Form 26AS and directing the AO to verify and grant the credit. It stated that TDS credit should be allowed when the corresponding revenue is offered for tax, subject to verification. The tribunal also urged the Revenue authorities to avoid unnecessary appeals in such cases, recommending resolution through AO-level verification.

The tribunal dismissed the Revenue’s appeal as infructuous, and the AO was directed to verify the Form 26AS and grant the TDS credit of ₹168.61 crore, ensuring the corresponding revenue was included in the total income.

To Read the full text of the Order CLICK HERE

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