The Income Tax Appellate Tribunal, Surat bench comprising Shri Pawan Singh, JM & Dr A L Saini, AM has ruled that TDS credit disallowed without verifying fact is not sustainable.
The assessee challenged the order passed by the Learned National Faceless Appeal Centre (NFAC)/ CIT(A) dated 03.08.2021, which arose out of the assessment order passed by the Assessing Officer (‘AO’) of the Income Tax Act, 1961.
Nimeshkumar Kamleshbhai Thakkar, the assessee stated that the AO has not been granted the benefit of Tax Deducted at Sources (TDS), which was deducted by the National Insurance Corporation Ltd (“NICL”) from the commission amount paid to the assessee.
The difference in TDS appears to be on account of the TDS certificate issued to the assessee by National Insurance Co. Ltd. from the commission amount paid to the assessee and the amount of TDS reflected in Form No.26AS.
It was observed that the NICL might have revised TDS returns and reduced the TDS credit of the assessee. Further noted that assessee has offered commission income for taxation and also received valid TDS certificates from NICL.
The Tribunal viewed that without verifying the real fact about the above-said difference, the disallowance of TDS credit must not be made, as income has been duly offered by the assessee. If TDS credit was disallowed then the corresponding income by the assessee has to be reduced by passing rectification order u/s 154 of the Income Tax Act,1961.
It was directed to the assessing officer to examine Form No. 26AS and the TDS certificate of the assessee. Further after verifying the revised TDS return of TDS of NICL and adjudicating the issue afresh by the law. The appeal was allowed for statistical purposes.
The assessee was represented by Shri Sapnesh R Seth and the respondent was represented by Shri Vinod Kumar.
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