Before the Centralised Processing Centre, Income-tax Department, Bengaluru
Ref: CPC Intimation dated [REF] · PAN [PAN] · AY 2023-24
Respected Sir/Madam,
1. Introduction
This reply is filed on behalf of the assessee, [Client] ("the assessee"), in response to the intimation issued under Section 143(1)(a) of the Income-tax Act, 1961, proposing an adjustment on account of alleged mismatch in TDS credit claimed in the return of income vis-à-vis the credit reflected in Form 26AS.
2. Factual position
2.1. The assessee filed its return of income on the due date declaring total income of ₹[REF] and claimed a TDS credit of ₹1,84,520 duly supported by Form 16A certificates issued by the deductors.
2.2. The intimation, however, restricts the TDS credit to ₹1,42,310 and proposes a demand of ₹42,210 plus applicable interest.
3. Ground 1 — TDS credit was correctly claimed
The TDS has been duly reflected in the deductor's TDS return (Form 26Q) for the respective quarter. The temporary mismatch arose because one of the deductors filed a correction statement after the assessee's return was processed by the CPC. The revised Form 26AS now reflects the full credit claimed.
Reliance is placed on:
- CIT v. [Client], wherein the Hon'ble High Court held that TDS credit cannot be denied to the deductee merely on account of the deductor's delayed filing of the TDS return, so long as the deductee can demonstrate that tax was in fact deducted at source.
- CBDT Circular No. 8/2017 read with Section 199 of the Act, which clarifies that the deductee is entitled to credit for TDS in the year in which the income is offered to tax, irrespective of the year in which the deductor deposits the tax.
4. Ground 2 — Adjustment under Section 143(1)(a) is beyond scope
4.1. The adjustment proposed in the intimation falls outside the scope of permissible adjustments under Section 143(1)(a), as the question of TDS credit mismatch is a factual matter that warrants verification under Section 143(2) or 143(3) and cannot be summarily adjusted by the CPC.
4.2. Further, the proviso to Section 143(1)(a) mandates that no adjustment shall be made unless the intimation under sub-section (1) is issued after considering the response, if any, filed by the assessee within the stipulated time. In the present case, the requisite opportunity was not afforded.
5. Prayer
In the light of the above, it is respectfully prayed that:
- The adjustment proposed in the intimation under Section 143(1)(a) may kindly be withdrawn.
- The full TDS credit of ₹1,84,520 as claimed in the return may be allowed.
- Consequential refund, if any, may be issued forthwith.
The assessee craves leave to add, alter, amend or withdraw any of the above grounds at any stage of the proceedings.
Yours faithfully, Authorised Representative for [Client]