INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.5236/DEL/2025 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 Assessment Year 2022-23 O R D E R PER VIMAL KUMAR, JUDICIAL MEMBER:

The appeal filed by the appellant/assessee is against the order dated

03.07.2025 of Learned Commissioner of Income Tax (Appeals), Mumbai [hereinafter referred to as ‘Ld. CIT(A)] under Section 250 of the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of order dated 02.05.2023 of Learned Assessing Officer/Centralized Processing Centre, Bangaluru (hereinafter referred to as “Ld. AO") passed under section 154 of the Act for AY 2022-23.

2. Brief facts of the case are that assessee filed return of income for AY 2022-23 on 22.09.2022. The said return of income was processed under Section 143(1) of the Act vide intimation order under Section 143(1) of the Act dated 02.03.2023 wherein TDS credit only to the tune of Rs.3,485/- has been allowed, instead of credit of Rs.5,65,923/- as appearing in Form 26AS. No prior intimation/communication of proposed adjustment under Section 143(1)(a) of the Act was issued to the Assessee. The assessee filed a rectification application under Section 154 of the Act against Section 143(1) order. The rectification order was passed on 02/05/2023 sustaining the disallowance of TDS credit of Rs.5,62,438/-, however, vide the rectification order the CPC reduced the interest granted under Section 244A of the Act from Rs.12,528/- (i.e. for 12 months) to Rs. 3,133/- (i.e. for 3 month) in the said rectification order and raised demand of Rs.9400/-.

3. Against order dated 02.05.2023 of Ld. AO, the appellant/assessee filed appeal before Ld. CIT(A) which was partly allowed vide order dated

03.07.2025.

4. Being aggrieved, the appellant/applicant filed present appeal with following grounds:

“1. On the facts and circumstances of the case, the order passed by the leamed Commissioner of Income Tax (Appeals), (hereinafter referred to as (CIT(A))) is bad both on facts and in the eye of law

2. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the action of AO(CPC) in disallowing the credit of TDS of Rs.5,62,438/-claimed by the assessee in the return of income.

(ii) That the above said credit of TDS has been denied despite the fact that the amount of TDS is appearing in Form 26AS uploaded on the income tax portal.

3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in denying the TDS credit, ignoring the assessee's contention that, since the project is under completion, the corresponding receipts on which TDS has been deducted have been duly accounted for as income by reducing the same from 'Capital Work in Progress' reflected in the balance sheet and hence the TDS claimed by the assessee cannot be denied.

4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the action of the AO ignoring the various judicial precedents brought on record by the assessee to justify that the TDS credit is allowable to the assessee.

5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in denying the TDS credit by misinterpreting the provisions of section 199 and Rules 37BA of the Income Tax Rules.

6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the action of the AO (CPC) in disallowing the TDS credit, despite the fact that no prior intimation was given to the assessee for such adjustment, thereby violating the conditions laid down in