IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER Assessment Year: 2017-18 Shashi Prabhu & Associates Assistant Commissioner of C Wankhede Stadium, Income Tax, Mumbai D-Road, Churchgate, Mumbai - Vs.

400020 (PAN : AAAFS3813K)

(Appellant) (Respondent)

Present for:

Assessee : Shri Bhupendra Karkhanis,CA Revenue : Shri Leyaqat Ali Aafaqui, Sr. AR Date of Hearing : 04.08.2025 Date of Pronouncement : 12.08.2025

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of Ld. CIT(A)-

4, Kolkata, vide order no. ITBA/APL/S/250/2024-25/1073259510(1), dated 13.02.2025 passed against intimation by Centralized Processing Centre, Bengaluru, u/s. 143(1) of the Income-tax Act (hereinafter referred to as the “Act”), dated 09.03.2019 for Assessment Year 2017-

18.

2. Grounds taken by the assessee are reproduced as under:

" 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in granting TDS Credit of Rs. 91,57,596/- only as against Rs. 1,31,74,662/- claimed in the income tax return resulting in short granting of TDS credit on a incorrect assumption of fact that the TDS credit of Rs. 39,38,139 had already been allowed to appellant firm in AY 2016-17, which is wrong and contrary to the facts and circumstances of the case, provisions of the Income Tax Act, 1961 and the Rules made there under.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not giving TDS credit of Rs. 39,38,139/- without appreciating the facts that: (i) The appellate firm follows cash basis of accounting therefore claims the TDS as and when the income is received and offered to tax as per the provisions of Rule 37BA(3) of the Income tax rules, 1962.

(ii) Neither claim for the TDS of RS. 39,38,139/- was made by the appellant the Ld. AO. CPC nor has Ld. AO. CPC granted the said credit of TDS of Rs.

39,38,139/- in AY 2016-17.

(iii) Though the TDS was deducted in previous year AY 2016-17, merely since the TDS was not carried forward in AY 2016-17 while filing of return of income the said credit cannot be lost.

3. On the facts and circumstances of the case and in law, the ld. AO erred in levying additional interest of Rs. 10,19,749/- u/s 234B and additional interest of Rs. 2,02,889/- u/s 234C of the Act which is wrong and contrary to facts of the case, provisions of the Act and Rules made thereunder.”

3. The only issue involved in this appeal is in respect of short granting of TDS credit of Rs. 39,38,139/- which according to the Ld. AO has already been allowed to the assessee in AY 2016-17.

4. Brief facts of the case are that assessee is a partnership firm engaged in providing architectural services and maintain books of accounts on cash system of accounting. Assessee filed its return of income on 13.10.2017 reporting total income at Rs. 6,29,27,080/- wherein TDS credit of Rs. 1,31,74,662/- was claimed, resulting into a refund of Rs. 2,67,100/-. While processing the return u/s. 143(1) by CPC credit of Rs. 91,57,596/- was granted against TDS thought assessee had claimed TDS credit of Rs. 1,31,74,662/-. On account of short grant of TDS credit, the refund claimed by the assessee got converted into liability of Rs. 50,07,430/-, including consequential effect of levy of interest u/s. 234B and 234C. Aggrieved, assessee went in appeal before Ld. CIT(A) who dismissed it. Aggrieved assessee is in appeal before Tribunal.

5. Before us, Ld. Counsel for the assessee submitted that assessee follows cash basis of accounting and therefore claims TDS as and when the income is received and offered to tax as per the provisions of Rule 37BA(3) of the Income Tax Rules, 1962 (The ‘Rules’). According to the assessee, claim of TDS of Rs. 39,38,193/- was neither made by the assessee nor granted by the CPC in AY 2016-17. This TDS was done in the year AY 2016-17, but inadvertently could not be carried forward while filing of return. Accord