IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER Assessment Year : 2021-22 Manjari Housing Projects LLP, The Income Tax Officer, M/s. Kalyaniwalla & Mistry LLP, Ward-41(1)(1), Esplanade House, 2nd Floor, vs. Kautilya Bhavan, 29, Hazarimal Somani Marg, G Block, Bandra Kurla Complex, Fort, Mumbai Bandra East, PAN : AARFG0014F Mumbai (Appellant) (Respondent)

Assessee by : Shri F.V. Irani Revenue by : Shri R.R. Makwana, Sr.DR Date of Hearing : 31-12-2024 Date of Pronouncement : 01-01-2025

ORDER

PER B.R. BASKARAN, A.M :

The assessee has filed this appeal challenging the order dt.03-05-2024 passed by the Ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2021-22. The assessee is aggrieved by the decision of the Ld.CIT(A) in restoring the issue relating to withdrawal of refund already granted to the assessee by the CPC, Bengaluru („CPC‟) to the file of the AO.

2. The facts relating to the above said issue are that the assessee had filed its return of income for the year under consideration claiming a refund of Rs.50.19 lakhs. The same was processed by the CPC. Even though the total income (here it was loss) was accepted by the CPC without making any adjustment, yet the CPC allowed TDS credit of Rs. 36,203/- only, as against the TDS credit claim of Rs.48,39,268/-. Hence, the assessee filed a rectification petition u/s 154 of the Act on 09-11-2022 and the same was accepted by granting full amount of TDS credit as claimed by the assessee. The Ld.AR submitted that the above said refund was also received by the assessee.

3. Since there was mistake in granting of interest u/s. 244A of the Act against the refund granted in the above said order, the assessee filed another rectification petition u/s 154 of the Act on 09-02-2023. The same was processed and in that intimation also, the full amount of TDS credit was given. On the very same day, another rectification order u/s. 154 of the Act was passed, wherein also the full credit of TDS was given.

4. Subsequently, the CPC suo motu passed another rectification order u/s. 154 of the Act on 05-06-2023, wherein the TDS credit of only Rs.1,08,591/- was granted, as against the TDS claim of Rs.48,39,268/-. Accordingly, a tax demand has been raised upon the assessee. Hence the assessee filed appeal before Ld CIT(A), but the Ld CIT(A) restored the matter to the file of the AO.

5. The Ld.AR submitted that this rectification order has been passed by the CPC, without giving an opportunity to the assessee by way of issuance of any notice or otherwise. The same is in violation of sec.154 of the Act. Further, the CPC has not furnished any reason for reducing the TDS credit, even though full credit of TDS was granted to the assessee in the earlier three rectification orders. The Ld.AR submitted that the Ld.CIT(A) in principle has accepted the contentions of the assessee. However, he has restored the matter to the file of the jurisdictional AO with a direction to examine the claim of the assessee in accordance with the provisions of section 199 r.w. Rule 37(VA) of the Income Tax Rules, 1962 („the Rules‟). The Ld.AR submitted that the order so passed by the Ld.CIT(A) is not in accordance with law for more than one reason, i.e., the said rectification order has been passed without giving notice to the assessee and further, the CPC itself had allowed full credit of TDS in three of its earlier rectification orders passed for the very same year. Accordingly, the Ld.AR submitted that the demand raised by the CPC may be cancelled.

6. We have heard the Ld.DR and perused the record. As submitted by the Ld.AR, the CPC has given full credit of TDS in three of its orders. However, in the last order passed u/s. 154 of the Act, the TDS amount has been reduced, which resulted in raising of a demand. It is the submission of the assessee that the CPC has not iss