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2022 (8) TMI 679 - AT - Income TaxDisallowance of credit for TDS - jurisdiction of AO to rectify the mistake u/s 154 - tax deductor has withdrawn certain TDS and revised its TDS return - CIT (A) as relying on the statement mentioned in the order u/s. 154 that the taxes deducted earlier in the name of the appellant have been withdrawn by the deductor - assessee received a rectification order u/s 154 wherein TDS credit was disallowed and consequential interest u/s 234B and 234C respectively also charged - HELD THAT:- It is nowhere from the record established that on what basis CPC Bangalore and jurisdictional ITO ward-35(1) (5), reduced the claim of the assessee from Rs 4, 53,605/- to Rs 39,605/-. It is further noted that the proceedings u/s 154 can be done only in the cases where there is a mistake apparent from record and no debatable issue is involved in this case the record before us clearly established that there is no mistake apparent from record as far as assessee is concerned. Department nowhere able to establish the fact as observed by the Ld. CIT (A) in his order “The credit for TDS is governed by the provisions of section 199 of the Act read with Rule 37BA of the Income Tax Rules, 1962. As per order u/s 154 dated: 10.08.2018, the tax deductor of the appellant has withdrawn certain tax credits as per Rule 37BA. In view of the fact that the taxes deducted earlier in the name of the appellant have been withdrawn by the deductor, only the tax credits which have not been withdrawn and those appearing in the claims of the appellant are allowed by the assessing officer in the case of the appellant. In view of the above facts and circumstances, I do not see any reason to interfere in the order of the AO, the appeals of the appellant are not allowed.” This observation challenges even the jurisdiction of CPC Bangalore and jurisdictional ITO ward-35(1)(5). Assessee filed her return of income on the basis of record generated by department itself i.e., form no 26AS and form no 16A. The documents which has been processed and issued by the department itself on which assessee relied, how there can be a case of mistake apparent from record. May be there is a mismatch in the data pertaining to assessee and data pertaining to deductor (processed and maintained by department), CPC Bangalore and jurisdictional ITO can’t proceed u/s 154 against the assessee. We declare this whole action of CPC Bangalore and in turn jurisdictional ITO is bad in law hence set aside with a consequential direction to give full credit of TDS claim by the assessee and any other money she deposited during this period. Appeal of the assessee is fully allowed with consequential relief in terms of reversal of interest charged u/s 234B and 234C with immediate grant of refund if any with consequential interest.
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