Assessee can claim TDS credit in the year income is taxed, even if deduction was in prior year.

The Tribunal allowed the appeal, stating that the assessee, following cash basis accounting, can claim TDS credit in the year the income is offered for tax, despite the deduction occurring in a prior assessment year. This decision aligns with previous rulings and ensures fair treatment based on the accounting method followed by the assessee.

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Issues involved:
Claim of TDS credit for professional income received in a different assessment year due to accounting method mismatch.

Detailed Analysis:

Issue 1: Claim of TDS credit for professional income received in a different assessment year
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) regarding the denial of TDS credit of Rs. 2,50,100 brought forward from the earlier year for the assessment year 2016-17. The assessee, a practicing advocate, consistently followed the cash basis of accounting as per section 145 of the Act. The discrepancy arose as the payer deducted TDS based on the accrual system in the earlier assessment year, while the assessee claimed credit in the current year when the income was received, in line with the cash basis of accounting. The Income Tax Department-CPC credited TDS based on the deductor's method, causing a mismatch with the assessee's claim. The Commissioner dismissed the appeal stating that TDS credit should have been claimed in the year of deduction. However, the Tribunal referred to precedents and held that credit for TDS should be allowed in the year the income is assessable/offered to tax, even if deducted in previous years, as per the cash basis of accounting followed by the assessee.

Conclusion:
The Tribunal allowed the appeal, emphasizing that the assessee, following cash basis accounting, is entitled to claim TDS credit in the year the income is offered for tax, despite the deduction occurring in a prior assessment year. The judgment aligns with previous decisions and ensures fair treatment based on the accounting method followed by the assessee.

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