Revisional Order cannot be invoked When AO revised TDS Credit after due verification of Reconciliation Statement: ITAT [Read Order]

While considering a bunch of appeals, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the revisional order cannot be invoked when AO revised TDS credit after due verification of the reconciliation statement.

M/s. Soma Enterprise Limited, the assessee challenged the revision order of the Principal Commissioner of Income Tax-1, Mumbai u/s.263 of the Act dated 31/03/2022 for the A.Y.2009-10 to 2017-18.

The assessee is involved in the activities of civil work by being a developer of infrastructure projects. The assessee filed its revised return of income for the A.Y.2009-10 on 03/09/2010 declaring a total income of Rs.128,80,55,960/-. The assessment was completed u/s.143(3) of the Act on 27/12/2011 determining the total income of the assessee at Rs.128,85,69,751/- after making disallowance u/s.14A of the Act in the sum of Rs.1,56,850/- and on account of software charges in the sum of Rs.3,56,941/-.

In the said assessment proceedings, the AO asked for queries for a complete reconciliation of TDS vis a vis its related income. All those details were duly filed before the AO by the assessee. A rectification order u/s.154 of the Act was passed by the AO revising the TDS credit figure to Rs.29,94,75,453/- after due verification of the TDS reconciliation vis a vis its income. 

The PCIT contended that there is a difference in contract receipts as per 26AS and figures reflected in the profit and loss account. The TDS as per Form 26AS and the TDS granted to the assessee did not match. Subsequently, the show-cause notice dated 23/03/2022 was issued to the assessee wherein the PCIT had observed that there was a complete failure to conduct relevant enquiries by the AO on the aforesaid issues. The assessee furnished detailed submissions in response to both the show-cause notices vide submissions dated 25/03/2022.

The PCIT completely ignored all the contention of the assessee and proceeded to treat the order passed by the AO as erroneous and prejudicial to the interest of the Revenue.

A Coram of Shri M Balaganesh, accountant member & Shri Rahul Chaudhary, a judicial member observed that irrespective of the fact that proper examination and enquiries had already been conducted by the AO in that assessment proceedings and irrespective of the fact that the assessee had already filed a detailed reconciliation statement for mismatch in gross receipts as well as for mismatch in TDS, the PCIT invoked the jurisdiction.

The bench quashed the order passed under section 263 order and the appeal filed by the assessee was partly allowed.

Shri Gaurav Bansal appeared on behalf of the assessee and Shri A.B. Koli appeared on behalf of the revenue.

To Read the full text of the Order CLICK HERE

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