Tribunal overturns tax credit disallowance, emphasizes due process and factual consideration.

The Tribunal ruled in favor of the assessee in a tax credit disallowance case. It held that the adjustment made by CPC without issuing notice to the assessee was not sustainable under section 143(1)(a). Additionally, the AO's disallowance of tax credit due to non-disclosure of corresponding income was overturned as the CIT (A) failed to consider the presented facts. The Tribunal emphasized the importance of due process and proper consideration of facts in tax assessments, ultimately allowing the assessee's appeal.

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Issues:
1. Disallowance of Tax credit by CPC without notice to the assessee.
2. Disallowance of Tax credit by AO due to non-disclosure of corresponding income.
3. Failure of CIT (A) to consider the facts and circumstances of the case.

Analysis:

Issue 1: Disallowance of Tax credit by CPC without notice to the assessee
The appeal was against the order of the ld. CIT (A) dated 30.09.2019 related to assessment year 2017-18. The CPC did not give credit of TDS amounting to Rs.1,85,392/-, despite it being reflected in Form 26AS. The CPC did not issue any notice to the assessee. The assessee contended that the AO should have made a proposal under section 143(1)(a) before making the adjustment. The Tribunal noted that the adjustment made by CPC without issuing a notice to the assessee was not sustainable in law, as it violated the mandate of section 143(1)(a) requiring notice before such adjustments.

Issue 2: Disallowance of Tax credit by AO due to non-disclosure of corresponding income
The assessee had exchanged land with two parties and received consideration, including TDS. The income was transferred to the ultimate holding company as per a collaboration agreement. The assessee claimed TDS credit, but the AO disallowed it as the corresponding income was not disclosed in the return. The CIT (A) upheld the AO's decision, stating that since the income was not shown, the TDS credit could be disallowed. However, the Tribunal found that the CIT (A) did not apply his mind to the facts presented by the assessee and set aside the order, ruling in favor of the assessee.

Issue 3: Failure of CIT (A) to consider the facts and circumstances of the case
The CIT (A) confirmed the AO's decision without adequately considering the facts and circumstances presented by the assessee. The Tribunal observed that the CIT (A) did not apply his mind in this regard and exhibited a lack of reasoning in confirming the AO's order. Consequently, the Tribunal set aside the orders of the authorities below and decided the issue in favor of the assessee. The appeal filed by the assessee was allowed, emphasizing the importance of due process and proper consideration of facts in tax assessments.

In conclusion, the Tribunal's judgment highlighted the necessity of following due process, considering all relevant facts, and ensuring proper application of the law in tax assessments to uphold the rights of the assessee.

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