Form 26AS – Department is required to give credit for TDS once valid TDS certificate had been produced or even where deductor has not issued TDS certificates on the basis of evidence produced by the assessee regarding deduction of tax at source and on the basis of indemnity bond.
Facts:
For assessment year 2007-08 the assessee claimed total credit for TDS of Rs. 21,51,63,912 – claim of Rs 16,52,09,344 was made in the original return and further claim of Rs 1,42,71,296 was made in revised return filed on 13-04-2009 and a claim of Rs. 3,56,83,272 was made vide letter, dated 28-12-2010, filed in the assessment proceedings. The Assessing Officer (AO) granted credit of TDS only to the tune of Rs. 11,89,60,393. The AO did not grant credit claimed because of discrepancy with respect to credit shown in Form No. 26AS.
Aggrieved, the assessee preferred an appeal to CIT(A) who directed the assessee to furnish all TDS certificates in original before the AO and directed the AO to verify the claim of credit of TDS and to allow TDS as per original challans available on record or as per details of such TDS available on computer system of the department.
Aggrieved, the assessee preferred an appeal to the Tribunal where it was contended that credit of TDS has to be given on the basis of TDS certificates and in case TDS certificates are not available, on the basis of details and evidence furnished by the assessee regarding deduction of tax at source. Reliance was placed on the decision of Bombay High Court in the case of Yashpal Sawhney vs. ACIT (293 ITR 593). Reference was also made to the decision of the Delhi High Court in the case of Court on its own Motion vs. CIT (352 ITR 273).
Held:
The Tribunal noted that the credit of TDS has been denied to the assessee on the ground that the claim for TDS was not reflected in computer generated Form No. 26AS. It observed that the difficulty faced by the tax payer in the matter of credit of TDS had been considered by the Hon’ble High Court of Bombay in the case of Yashpal Sawhney vs. DCIT (supra) in which it has been held that even if the deductor had not issued TDS certificate, the claim of the assessee has to be considered on the basis of evidence produced for deduction of tax at source as the revenue was empowered to recover the tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Hon’ble High Court of Delhi in case of Court on its Own Motion v. CIT (supra) have also directed the department to ensure that credit is given to the assessee, where deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by the assessee regarding deduction of tax at source and on the basis of indemnity bond.
The Tribunal modified the order passed by the CIT(A) on this issue and directed the AO to proceed in the manner discussed above to give credit of tax deducted at source to the assessee.
This ground of appeal filed by the assessee was allowed.
