Railway Guard Wins Tax Relief: ITAT orders Fresh Assessment After TDS Credit Denial Due to Missed Notices [Read Order]
While the tribunal did not condone Sahu’s delay in filing returns, it ruled that denying TDS credit despite evidence was unjust.
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The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has granted relief to a Goods Train Guard with South Eastern Central Railway, directing a fresh assessment after tax authorities denied him credit for Tax Deducted at Source (TDS) worth ₹2.46 lakh. The tribunal noted that Sahu, due to the nature of his job, missed receiving tax notices, leading to an ex-parte assessment that...
The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has granted relief to a Goods Train Guard with South Eastern Central Railway, directing a fresh assessment after tax authorities denied him credit for Tax Deducted at Source (TDS) worth ₹2.46 lakh. The tribunal noted that Sahu, due to the nature of his job, missed receiving tax notices, leading to an ex-parte assessment that ignored his legitimate tax claims.
Kushal Prasad Sahu, a Goods Train Guard’s salary income of ₹14.53 lakh was subject to TDS deductions by his employer. However, since he failed to file his Income Tax Return (ITR), the Assessing Officer (AO) reopened the case under Section 147 and passed an ex-parte order under Section 144, adding the entire salary as taxable income without allowing TDS credit or deductions under Section 80C for provident fund and insurance payments.
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Sahu appealed before the Commissioner of Income Tax (Appeals), but his plea was dismissed on grounds of non-prosecution, with the CIT(A) wrongly claiming that he had not filed necessary appeal documents. The tribunal, however, found that Sahu had indeed submitted Form 35 and supporting evidence, including Form 16 and Form 26AS, which clearly reflected the TDS deductions.
Representing Sahu, his Chartered Accountant, G.S. Agrawal, argued that the railway guard’s mobile job made it difficult for him to receive notices or file returns on time. The tribunal acknowledged this practical challenge but emphasized that the tax department’s failure to verify TDS details from Form 26AS despite having access to it was a serious lapse.
The ITAT bench comprising Judicial Member Ravish Sood and Accountant Member Arun Khodpia set aside the assessment and penalty orders, directing the AO to re-examine the case. The tribunal stressed that Sahu must be given a fair opportunity to present his documents, including proof of TDS and eligible deductions.
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While the tribunal did not condone Sahu’s delay in filing returns, it ruled that denying TDS credit despite evidence was unjust. The decision aligns with past rulings where courts have held that technicalities should not override substantive justice when tax deductions are verifiable.
The case has been sent back to the AO for fresh adjudication, with instructions to consider Sahu’s TDS claims and deductions. The penalty of ₹2.96 lakh under Section 271(1)(c) was also quashed since the original assessment itself was flawed.
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