TDS  reflected in form 26AS for assessment year  shall be allowed, if ROI and TDS are correctly filed: ITAT directs AO to verify claim [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that Tax Deduction at Source in form 26AS for assessment year should  be allowed, if return of income and Tax Deduction at Source are correctly filed. Thus, the bench directed the assessing officer to verify the claim of assessee regarding TDS credits.

The assessee BAE Systems Information & Electronic Systems Integration Inc is a company incorporated in the United States of America and is engaged in the sale of software. In its return of income  the assessee has offered tax income and claimed corresponding credit of TDS amounting to Rs. 16,58,287/-.

While processing the return, Centralized Processing Centre [CPC] did not allow credit of Tax Deducted at Source.

It  was observed that during the year under  consideration, the assessee had sold software to its two customers in  India.

Considering that the invoices for the sale of software were raised  by the assessee during the year under consideration. Therefore, the entire income arising under the invoices was offered to tax in the return of income filed for the year under consideration. 

The reason for denying the credit was that customers deducted tax on the invoices in the subsequent Assessment Year  i.e. 2020-21 and, therefore, credit of TDS pertaining to these invoices are appearing in Form No. 26AS of  Assessment Year  2021 .

Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) (CIT(A)) who upheld the action of the Assessing officer. Hence the assessee filed a second appeal before the tribunal .

Before the  bench, Rishab Malhotra Counsel for the assessee submitted that  identical issue was covered in favour of assessee.

Sanjay Kumar, Department Representative supported the decision of the lower authorities.

It was observed by the tribunal that assessee has shown revenue from the invoice as income during the year under consideration itself.

The deductor may have deducted tax in subsequent Assessment years  but the fact of the matter is that since the assessee has shown income, the assessee has every right to get credit for TDS.

After reviewing the facts and submission, the two member bench of the tribunal comprising N.K. Billaiya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) directed the Assessing Officer to verify the claim and allow credit of TDS if the income is shown in the year under consideration.

To Read the full text of the Order CLICK HERE

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