Anomaly in Form 26AS by Deductor- Assessee Cannot be denied Credit of TDS
It has been recently held in the case of LSG Sky Chef (India) Pvt. Ltd vs. CIT (ITAT Mumbai) that an assessee cannot be deprived of credit for TDS due to an anomaly in Form 26AS filed by his deductor.
Brief facts of the case:
The Assessee filed an appeal before the ITAT Mumbai against the order of the Commissioner of Income Tax (Appeals) dated 23.04.2011, regarding its assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 2009-10.
The assessee furnished the TDS certificate containing the entire details of the tax deducted at source, for which he claimed credit. However the Form 26AS of his deductor showed some anomaly for which he was denied credit of TDS.
The most important issue arising in the appeal was the short credit of the TDS claimed by the assessee in the return file by him.
The ld. Dy. CIT (A), before whom the assessee preferred the first appeal, partly allowed the claim of the assessee. Being aggrieved by the order, the assessee filed the second appeal before the ITAT Mumbai.
The judgment passed by the Tribunal:
The ITAT Mumbai held that the Revenue was entitled to verify and satisfy itself regarding the authenticity of the assessee’s claims, but the department cannot deny the assessee credit for TDS.
It has been further held that Form 26AS is a statement prepared by the Revenue, as such the assessee is not responsible for any discrepancy appearing therein. If any non-matching of TDS is reflected in such a statement, the assessee’s genuine claims cannot be denied by the Revenue.
It was also held that the burden of proving the reason of the absence of the details of the entire tax deducted at source in the said Form 26AS Statement by the deductor does not fall upon an assessee.
The plea that the deductor has quoted an incorrect TAN so that the TDS will be reflected in the account of another assessee cannot be a ground for disallowing credit for the TDS in the hands of the original assessee. The onus lies fully upon the Revenue.
According to the view of the Tribunal no infirmity attended the impugned order of the ld. DCIT (A). The Revenue should grant the assessee credit for the TDS where he has proved to the A.O. the fact regarding the deduction of tax at source and the deposit of the TDS to the central government, subject to the conditions of sections 198 and 199 of the Income Tax Act.
The A.O. was directed to allow the assessee credit for the shortfall amount, subject to verification by the Department. Accordingly the appeal of the assessee was allowed.