ITAT Mumbai directs AO to grant TDS credit & recompute interest under Sec 244A.

The Appellate Tribunal ITAT Mumbai ruled in favor of the assessee, directing the Assessing Officer to grant the TDS credit of Rs. 14,08,733 and recompute the interest under section 244A of the Act for the period from May 2007 to June 2014. The Tribunal emphasized that the failure to furnish the certificate for TDS should not hinder the credit, and interest should be allowed as the delay was not attributable to the assessee.

---

---

Issues:
1. Denial of credit of tax deducted at source.
2. Non-granting of interest under section 244A of the Act.

Issue 1: Denial of credit of tax deducted at source

The assessee appealed against the order of the Commissioner of Income Tax (Appeals) regarding the denial of credit for tax deducted at source (TDS) amounting to Rs. 14,08,733. Initially, the TDS credit was granted only to the extent of Rs. 11,92,15,936, resulting in a shortfall of Rs. 3,33,73,572. The assessee filed a rectification application under section 154 of the Act, leading to the grant of additional TDS credit. The Commissioner directed the Assessing Officer (AO) not to recover the TDS amount based on a Bombay High Court decision. Subsequently, the AO did not grant credit for a portion of the TDS amount as the certificate was not furnished before the AO. The Tribunal held that the assessee had provided details of TDS deductions, and the failure to furnish the certificate should not hinder the credit. Relying on the High Court decision, the Tribunal directed the AO to allow the credit of Rs. 14,08,733 to the assessee.

Issue 2: Non-granting of interest under section 244A of the Act

The second issue pertained to the denial of interest under section 244A of the Act on a TDS amount of Rs. 1,31,76,602 for the period from May 2007 to June 2014. The assessee claimed additional TDS credit, which was initially not granted in the assessment. The Commissioner directed the AO to verify the claim. The AO, however, did not grant interest for the period from May 2007 to June 2014, citing provisions of section 244A(2) of the Act. The Tribunal noted that the delay was not attributable to the assessee and that the TDS was deducted and deposited on time. Relying on a Bombay High Court decision, the Tribunal held that interest should be allowed to the assessee for the specified period. Consequently, the AO was directed to recompute the interest, and the appeal was allowed.

In conclusion, the Appellate Tribunal ITAT Mumbai ruled in favor of the assessee on both issues, directing the AO to grant the TDS credit and recompute the interest under section 244A of the Act.

---