Senior citizen bank retiree wins TDS credit appeal after rectifying return mismatch under section 155

ITAT Jodhpur allowed the appeal of a senior citizen retired bank employee who was denied TDS credit due to initial mismatch. Though the assessee later rectified the TDS return and showed matching credit in TRACES, the AO rejected the section 154 application citing four-year limitation. The tribunal held that section 155 empowers the AO to rectify apparent tax credits, noting the genuine credit was supported by Form 16 and online records. The AO was directed to pass consequential order granting due tax credit to the assessee.

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Issues:
The issues involved in the judgment are the delay in filing the appeal due to the COVID-19 pandemic and the denial of TDS credit leading to a demand for assessment year 2008-09.

Delay in Filing Appeal:
The appeal filed by the assessee was delayed by 309 days due to the COVID-19 pandemic. The assessee, being a senior citizen, explained the reasons for the delay, attributing it to physical movement restrictions. The bench noted the pandemic situation and condoned the delay in filing the appeal.

Denial of TDS Credit:
The assessee's return of income for the assessment year 2008-09 showed a total income of Rs. 3,92,297, with tax payable at Rs. 34,701, adjusted against TDS of Rs. 36,400. However, the TDS credit was not given by the Assessing Officer (AO) initially due to a mismatch. The assessee approached the TDS deductor, and after a considerable time, the TDS was reflected in Form 26AS. Despite this, the AO rejected the rectification request, leading to the appeal.

The CIT(A) upheld the AO's decision citing the provision of section 154(7) of the IT Act, which limits the time for rectification. The assessee then appealed, providing detailed submissions regarding the TDS mismatch issue and the efforts made to rectify it, including communication with the bank and the tax department.

Upon hearing both parties, the tribunal noted the assessee's efforts to rectify the TDS credit mismatch. Despite the delay in filing the rectification request, the tribunal invoked section 155 of the Act, granting the AO powers to rectify the tax credit. The tribunal directed the AO to pass an order giving the tax credit due to the assessee based on the fresh records submitted.

Conclusion:
In conclusion, the tribunal allowed the appeal of the assessee, emphasizing the genuine efforts made to rectify the TDS credit mismatch and the entitlement to the tax credit. The tribunal's decision aimed to grant justice to the senior citizen assessee, considering the specific facts presented and the denial of genuine tax credit by the AO.

The appeal was allowed, and the order was pronounced in open court on 13.03.2024.

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