TDS credit entitlement: full Form 26AS TDS must be allowed even if gross receipts were not fully assessed, for commission agents.

Where tax is deducted and reflected in Form 26AS in the assessee's name, the assessee is entitled to claim full credit of that TDS even if the gross receipts (on which TDS was deducted) are not fully offered to tax, particularly where the assessee acts as a commission agent and only commission income is assessable; intimation under section 143(1) and rectification under section 154 that denied proportionate credit on that basis must be corrected and the processing authority directed to grant full credit as per Form 26AS.

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Issues: Whether the assessee is entitled to full credit of tax deducted at source as reflected in Form 26AS where CPC granted only proportionate credit in the intimation under section 143(1) and rectification under section 154 was rejected.

Analysis: The dispute concerns denial of full TDS credit shown in Form 26AS on the ground that the gross receipts against which TDS was deducted were not fully offered to tax in the assessee's profit and loss account. The assessee acted as a commission agent (kachcha arhtia) receiving payments on behalf of others and offering only commission income to tax, while TDS was nevertheless deducted on payments made to the assessee. The intimations under section 143(1) and the rectification order under section 154 arose from the same grievance of denial of full TDS credit. The technical objection that separate appeals should have been filed against the section 143(1) intimation and the section 154 rectification was held to be incorrect because both intimation and rectification related to the same substantive denial of TDS credit. Given that the tax was deducted from amounts attributable to the assessee (as reflected in Form 26AS) and that only commission income is assessable while the deducted amounts remain the assessee's money for which credit has been given by deductors, the appropriate remedy is to allow the TDS credit as reflected in Form 26AS. The Tribunal directed the processing authority to grant full TDS credit accordingly.

Conclusion: The appeal is allowed and the assessee is entitled to full credit of TDS as shown in Form 26AS; the intimation and rectification shall be treated consistent with granting full TDS credit to the assessee.

Ratio Decidendi: Where tax has been deducted and reflected in Form 26AS in the name of the assessee, the assessee is entitled to credit of such TDS notwithstanding that the gross receipts on which TDS was deducted are not offered to tax in full, particularly where the assessee is a commission agent and only commission income is assessable.

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