Deposit of TDS under wrong TAN – ITAT directed credit of TDS after verification of challan

Deposit of TDS under wrong TAN – ITAT directs credit of TDS to the assessee after verification of challan

In the instant appeal, the appellant assessee had challenged the order of the CIT(A) in the matter of order passed under Sections 201(1)/201(1A) of the Income Tax Act, 1961 (the Act).

ABCAUS Case Law Citation:
ABCAUS 2338 (2018) (05) ITAT

The appellant, by inadvertent mistake, had deposited the tax deducted at source (TDS) by mentioning in the challan the wrong Tax Deduction Account Number (TAN).The assessee had filed TDS Return in Form no. 24Q for the relevant quarter, however due to the wrong TAN, appellant had not received credit for the TDS so deposited.

The AO observed that the assessee had committed defaults by non-payment of TDS amount deducted. Accordingly he raised demand under Section 201(1)/201(1A) of the Act.

Before the CIT(A), with respect to the mistake, the assessee filed certificate of Bank stating that the amounts corresponding to the challan had been debited to the assessee’s account. The assessee prayed CIT(A) to ask the AO to give credit for the said challan in view of an apparent mistake in the mentioning of the TAN.

However, the CIT(A) rejected the appeal.

Before the Tribunal, the assessee pointed out an order of the Coordinate Bench wherein under similar facts, the AO was directed to give credit for the tax deducted at source . In the said case, the assessee had inadvertently deposited TDS under wrong TAN and also in one challan wrong section had been mentioned.  and wrong section the AO had raised the demand. The assessee requested the CIT(A) that the AO be directed to make required corrections and provide credit in the correct TAN and drop the demand against the assessee. The CIT(A) after considering the evidences furnished, directed the AO to allow necessary relief after proper verification of the original challan furnished by the assessee. The Revenue challenged the order of the CIT(A) before the Tribunal but did not raise any contention in respect of TDS deposited under the wrong TAN.

Even with respect to the contention of the Revenue that assessee should have filed a correction statement to rectify the wrong section and in absence of that the credit had not been given to the assessee, the Tribunal opined that once the challan is deposited with the bank, it would not be possible for assessee to retrieve the same and make any correction.

Accordingly following the decision of the Coordinate Bench, the Tribunal directed the AO to verify the original challan for deposit of TDS and decide the issue as per the direction given by the Coordinate Bench.

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