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TMI Blog2025 (3) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... o as "the Act"], dated 26.11.2024, in connection with the intimation under section 143(1) for the Assessment Year (A.Y.) 2023-24, issued by the Centralized Processing Center (CPC), Bangalore, dated 09.01.2024. Facts of the Case 2. The assessee is engaged in the business of EPC (Engineering, Procurement, and Construction) contracts for State and Central Government projects. The company procures work orders through government tendering processes. 3. The assessee filed its return of income for A.Y. 2023-24, declaring total turnover as per books of accounts at Rs. 1,07,22,34,247/-, whereas total gross receipts as per Form 26AS stood at Rs. 1,16,87,23,656/- The assessee claimed TDS credit of Rs. 2,46,82,297/-, reflecting the deduction made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the assessee is in appeal with following tabulated grounds of appeal: Sr. No. Relevant Section(s)/Rules of the IT Act Issue Ground of Appeal 1 Rule 37BA Erroneous/Proportionate Disallowance of TDS Credit On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in proportionately reducing the TDS credit based on turnover discrepancies between books of accounts and Form 26AS, even though the assessee has claimed TDS correctly as per Form 26AS. This action is contrary to the provisions of the Income Tax Act, which mandates granting TDS credit as per Form 26AS. 2 Other Failure to Consider Circular No. 23/2017 Properly On the facts and circumstances of the case as well as law on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Form 26AS arising from deductor-side issues. 7 253 Prayer - The appellant prays that the Hon'ble ITAT direct the revenue authorities to grant full TDS credit as claimed in the return of income, as the demand raised and the proportionate reduction of TDS are not justified under law. - The appellant craves leave to add, alter, modify or delete any or all the grounds of appeal during the appeal proceedings. 6. The assessee also raised following additional grounds of appeal: Sr. No. Relevant Section(s) of the IT Act Issue Ground of Appeal 1 143(1) Disallowance made by CPC, ITD u/s 143(1) of the Act is beyond its jurisdiction. On the facts and circumstances of the case as well as law on the matter, the Centralized Proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the full TDS credit as reflected in Form 26AS, the CIT(A) acted contrary to the clarifications issued by the CBDT. The AR also placed on records two letters from Customers namely Executive Engineer, Panam Project Division Godhra Department and Watrak Project Canal Division confirming the fact that they have deducted tax on GST element of the invoice amount. 8. The assessee also placed reliance on the decision of the Co-ordinate Bench in Escorts Ltd. vs. DCIT (ITA No. 2436/Del/2005, order dated 11.05.2007), wherein the Bench held that TDS credit cannot be denied merely due to a mismatch between turnover as per books and Form 26AS, and that credit for TDS must be given in the year in which the corresponding income is assessable, provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Upon reviewing the data, we observe that while the assessee claims the entire difference arises due to GST at 18%, in certain cases, the percentage difference does not exactly match the GST rate. Specifically, for the following parties: Sr. No. PARTY NAME Income as per Books Income as per 26AS Difference (26AS - Books) % Difference w.r.t Books Represented by GST as claimed by the assessee 1 EXECUTIVE ENGINEER PANAM PROJECT DIVISION - GODH 23,02,10,549.00 21,92,86,304.00 1,09,24,245.00 -4.75% 3 EXECUTIVE ENGINEER WATRAK PROJECT CANAL DIVISION 76,73,01,276.00 86,18,44,716.00 -9,45,43,440.00 12.32% 2 EXECUTIVE ENGINEER SUJALAM SUFLAMGWRDCL 7,26,34,602.00 8,57,08,829.00 -1,30,74,227.00 18.00% 12. In case of Executive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit for TDS must be given in the year in which the corresponding income is assessable, provided the TDS has been duly deposited with the government. We find that the CPC acted beyond its jurisdiction by making such an adjustment under section 143(1), as the verification of TDS credit requires detailed examination, which falls within the scope of scrutiny assessment under section 143(3) rather than summary processing under section 143(1). The CIT(A) also failed to appreciate this jurisdictional issue and did not independently verify whether the amounts reflected in Form 26AS were duly accounted for in the assessee's books. 15. In light of the above, we hold that the assessee's claim regarding GST is prima facie correct, but further verific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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