TDS Credit on Accrued Income is allowable, if it was not claimed in earlier years: ITAT

The Delhi bench Income Tax Appellate Tribunal (ITAT) ruled that TDS credit on accrued income is allowable if it was not claimed in earlier years.

The assessee, Ujjwal Singh declared income of Rs.1,01,79,310/- and claimed credit for TDS amounting to Rs.5,70516/- deducted by the deductor, KIN Finserv LLP in the preceding Assessment Year 2015-16. The assessee claimed credit of TDS in Assessment Year 2016-17 on the ground that the bill was raised on 01.08.2015 and thus the income accrued was also included in the return of income in the Assessment Year 2016-17.

The assessee claims to have reported an income of Rs.5,70516/- based on invoices dated 01.08.2015 in the Assessment Year 2015 – 16 which was denied by the AO on the ground that such TDS was not reflected in the annual information statement in form 26AS generated by the Revenue.

It was contended that as per the law laid down in Section 199 r.w. Rule 37BA (3), the credit for TDS shall be allowed by the Assessing Officer in the year when the income has been offered by the assessee.

The Tribunal observed that the income has been offered by the assessee in the year of its accrued in Assessment Year 2016-17 and the credit for TDS deserves to be allowed in Assessment Year 2016-17 as claimed in terms of Section 199 r.w. Rule 37BA (3).

It was observed that the assessee is entitled to TDS corresponding to the income reported in Assessment Year 2016-17 only on satisfying the condition that the assessee has not claimed any credit for TDS in earlier the Assessment Year 2015-16.

Shri Saktijit Dey, judicial member & Shri Pradip Kumar Kedia, accountant member set aside the impugned order of the CIT(A) and restored the matter to the file of the Assessing Officer for grant of credit by the law.