2025 (2) TMI 1327 - AT - Income Tax

Credit of TDS not claimed in return: appellate authority directs AO to examine credit and corresponding income and affirm entitlement

Credit of TDS appeared in accounts and Form 26AS but was not claimed in the income tax return nor via Form 71; the central issue is entitlement to TDS ... Credit of TDS not claimed in return - Amount not claimed in income tax return filed by the assessee nor Form 71 was filed by the assessee for claiming refund of TDS - credit of TDS which was reflected in accounts and Form 26AS but not claimed in the return - CIT(A) directing the AO to examine and allow credit HELD THAT:- We find that Ld. CIT(A) has passed a reasonable order and correct in saying that technical pleas cannot circumscribe lawful rights of an assessee. Ld. CIT(A) has also noted that the claim was duly reflected in the accounts and in Form 26AS. CIT(A) directed the AO to examine the claim of TDS made by the assessee and also examine whether the corresponding income is shown in the return filed. In our considered opinion, the aforesaid findings of the Ld. CIT(A) is quite correct, therefore, we do not find any infirmity in the order of the Ld. CIT(A) and accordingly, affirm the same. Appeal of the Revenue is dismissed. Issues: Whether credit for TDS not claimed in the return but reflected in audited accounts and Form 26AS can be allowed after verification and subject to examination by the Assessing Officer.Analysis: The issue was examined on the basis that the TDS entries appeared in the audited financial statements under balances with government authorities and in Form 26AS while the credit was inadvertently not claimed in the filed return. The appellate authority applied judicial principles that technical objections should not defeat a lawful substantive right where a meritorious claim exists. The appellate authority directed that the Assessing Officer is to verify the genuineness of the TDS claim, examine whether the corresponding income has been disclosed in the return, and give the assessee adequate opportunity of being heard, with the assessee required to cooperate in the verification process. The appellate order was affirmed on the ground that the claim warranted examination and could not be denied on purely technical grounds.Conclusion: Credit for TDS not claimed in the return but reflected in audited accounts and Form 26AS is to be examined and allowed if verified; the Assessing Officer is directed to verify the claim and give opportunity of hearing, and the appellate order directing such verification is affirmed in favour of the assessee.