ITAT Grants Relief for Clerical Error in TDS Credit Claim:

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 15 May partly allowed the appeal filed by Nishant Anilbhai Shah for AY 2017-18 and directed the Assessing Officer to grant TDS credit after permitting rectification of a typographical error in the employer’s TAN mentioned in the return of income. A Single Member Bench comprising Judicial Member Suchitra Kamble observed that the mistake was genuine and technical in nature, with no mala fide intent attributable to the assessee.

The assessee had filed the return of income within the prescribed due date on 19 August 2017 and had duly discharged the entire tax liability. However, while filing the return, the assessee inadvertently mentioned the employer’s TAN incorrectly as “PENS12481A” instead of the correct TAN “PNES12481A”. Due to this typographical error, the system failed to grant TDS credit, resulting in a tax demand of Rs. 1.28 lakh.

The assessee contended that the taxes were duly deducted and deposited by the employer, which was clearly reflected in Form 16 and Form 26AS. It was further submitted that the error was purely accidental and there was no revenue loss to the department. The assessee also pointed out that although grievances were raised after becoming aware of the issue, rectification could not be filed online within the prescribed limitation period.

Before the Tribunal, it was argued that sustaining the demand despite the taxes already having been deducted would result in double taxation of the same income and would be contrary to principles of equity and natural justice. The Tribunal observed that the mistake committed by the assessee was a genuine typographical error while mentioning the employer’s TAN in the return of income.

The Bench further noted that though the assessee could not follow the rectification procedure within time, exceptional circumstances existed in the present case, warranting relief.

The ITAT held that the assessee should be permitted to rectify the correct TAN details, and if found eligible, the corresponding TDS credit should be granted in accordance with law.

Thus, the Tribunal directed the Assessing Officer to allow rectification of the TAN particulars and grant appropriate TDS credit after verification under the provisions of the Income Tax Act. The appeal of the assessee was partly allowed.