The Income Tax Appellate Tribunal, New Delhi, ruled that TDS credit may be granted only when income corresponding to TDS is assessed to tax in the same FY.
The tribunal noted that the matter came up before the Tribunal in AY 2007-08 and 2009-10 in the case of the same assessee and the Tribunal held that the credit of TDS in a financial year can be granted only when income corresponding to such TDS is assessed to tax in the said financial year. Further, the Tribunal directed that the assessee will be at liberty to approach the Assessing Officer for claiming credit of TDS in the concerned year and the AO may allow the claim in accordance with law.
Facts
The assessee company is engaged in the business of developing and implementing integrated marketing programmers for promotion and marketing of client’s goods and services. The assessee company has filed its returned of income on 25.11.2011 declaring total income of Rs.4,97,719/-.
The return was processed u/s 143(1) and it was also selected for scrutiny under CASS. The AO observed that the sales shown by the assessee in the profit & loss account was not matching with the amount shown by the TDS Certificates filed by the assessee.
The AO directed for reconciliation of the sales as per P/L account and as per TDS Certificates. The AO reproduced the sales as per P/L account sales as per TDS Certificates of 39 concerns on page 2 of the order and noted that total sales as per TDS certificates was Rs.56.92 crores, whereas the assessee had declared sales as per profit & loss account at Rs.46.17 Crores and thus there was a difference of Rs.10.75 Crores. The assessee was asked to reconcile the same.
The assessee submitted that the same was due to the mistake of the client. The AO held that it was apparent that the assessee had not disclosed Rs.10,75,12,135/- of worth of sales leading to understatement of income.
The AO, accordingly, added back the same to the income of the assessee as done in the earlier assessment year.
CIT(A) after considering the facts of the case directed the AO to verify the claim of the assessee and allow the TDS as per sub-rule-3
and Rule 37BA of the I.T. Rules. The ld. CIT(A) also observed that if the assessee wants to claim TDS, it has to offer corresponding receipts during the year.
Submissions
AR submitted that similar matter came in the case of the assessee for AYs 2007-08 and 2009-10. On similar facts, it was submitted that the Tribunal had agreed with the AO that the credit of TDS in a financial year can be granted only when income corresponding to such TDS is assessed to tax in the said financial year.
It was submitted that the Tribunal directed that the assessee will be at liberty to approach the Assessing Officer for claiming credit of TDS in the concerned year and the AO may allow the claim in accordance with law.
Conclusion
The bench held that credit of TDS in a financial year may be granted only when income corresponding to such TDS is assessed to tax in the said financial year.
The tribunal said that the assessee will be at liberty to approach the Assessing Officer for claiming the such credit in the concerned year in which income is offered and the AO may allow the same in accordance with law.
Case Details
Case Name: Solutions Integrated Marketing Services Private Ltd. V/S The Deputy Commissioner of Income tax
Citation: ITA No.2852/Del/2015
Tribunal: ITAT New Delhi
Coram: Shri Kul Bharat, Judicial Member And Shri Brajesh Kumar Singh, Accountant Member
