The assessee, Krishna Prakash Goel, filed his return of income for Assessment Year 2023-24 declaring total income of ₹2,27,620. The return was processed under section 143(1) of the Income-tax Act, 1961 by the Centralized Processing Centre, Bengaluru, wherein credit for Tax Deducted at Source (TDS) amounting to ₹2,07,454 was disallowed. Consequently, TDS credit was restricted to ₹1,35,561 as against the claim of ₹3,43,015 reflected in Form 26AS, resulting in a demand of ₹1,41,660.

Aggrieved by the adjustment, the assessee preferred an appeal before the First Appellate Authority. However, the appeal was dismissed, and the action of the Assessing Officer was confirmed on the ground that the assessee failed to establish that the remaining joint owners of the property had not claimed the corresponding TDS in their respective returns.

Before the Tribunal, it was contended that the assessee, along with his two sisters, was a joint owner of the property sold and that the sale consideration and corresponding income shares were duly disclosed. The Tribunal observed that the disallowance of TDS credit was sustained primarily due to lack of supporting evidence rather than conclusive verification.

Considering the peculiar facts and in the interest of justice, the Tribunal held that the assessee deserved one more opportunity to substantiate his claim. Accordingly, the matter was restored to the file of the First Appellate Authority with a direction to grant proper opportunity of hearing and to verify the TDS claim afresh based on documentary evidence. The assessee was cautioned to fully comply with appellate proceedings, failing which the authority would be at liberty to decide the matter in accordance with law.

The appeal was thus allowed for statistical purposes, reinforcing the principle that TDS credit disputes—especially in joint ownership transactions—must be resolved after due verification and adherence to principles of natural justice.

Source Link- https://itat.gov.in/public/files/upload/1767595614-2h8GHA-1-TO.pdf

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