ITAT Quashes Assessment made on basis of incorrect Form 26AS when updated 26AS was provided

The Income Tax Appellate Tribunal (ITAT Delhi) in the matter of Shiv Kumar Sharma Vs. Ward 2(2)(3) quashed the assessment made on basis of incorrect Form 26AS when updated 26AS was provided.

FACTS:

Assessee is an individual who electronically filed his return of income for AY. 2018-19 on 22.01.2019 declaring total income at Rs.14,81,410/-. Thereafter, vide intimation u/s 143(1) dated 15.04.2019, the return income of the assessee was accepted and the refund due to the assessee was determined at Rs.80,647/- as against the claim of Rs.3,09,590/-. Thereafter, assessee filed appeal before CIT(A) who vide order dated 24.12.2021 in Appeal No.CIT(A), Ghaziabad/10416/2019-20 dismissed the appeal of the assessee.

At the outset, ld AR submitted that though the assessee has raised various grounds but the sole controversy is with respect to addition of income amounting to Rs. 40,09,235/-

FINDINGS:

The Learned AR submitted that assessee is an agriculturist and during the year under consideration compensation of Rs.40,09,235/- was stated to have been received on the acquisition of his agriculture land from U.P. Awas Vikas Parishad Ghaziabad as per Form 26AS dated 30.07.2018. Based on the compensation reflected in Form 26AS, assessee filed return of income on 22.01.2019 declaring the total taxable income at Rs.14,81,410/-(which included the compensation of Rs 40,09,235/-).

Subsequently, the compensation to the assessee was revised by U.P. Awas Vikas Parishad suo moto to Rs.11,52,618/- instead of Rs 40,09,235/- and the corresponding TDS was also reduced to Rs.2,30,518/- from Rs. 5,81,641/-. Ld AR submitted that the reduction of compensation was for the reason that the original compensation included the compensation belonging to the cousin of assesssee, Mr. Mahaveer Prasad Sharma. The revised compensation and the corresponding TDS was reflected in the revised Form 26AS dated 1.7.2019 (the copy of which is placed at page 9 of the paper book). He submitted that on the basis of the revised Form 26AS, the total income of the assessee worked out to Rs..10,56,531/- instead of Rs.14,81,410/-, but however in the intimation passed u/s 143(1)(a) of the Act, the total income of the assessee was considered as Rs.14,81,967/- instead of revised total income amounting to Rs.10,56,531/-. He submitted that assessee had filed his original return of income by considering the amount of compensation as per the original Form 26AS dated 30.07.2018 and by the time the revised Form 26AS which was updated on 1st July 2019, was received by the assessee, the time for filing the revised return had expired (the last date for filing the revised return of income was 31.03.2019). He submitted that before CIT(A), assessee pleaded that on the basis of the revised Form 26AS the total taxable income be considered but the plea of the assessee was rejected by CIT(A). He thereafter pointed to the original computation of taxable income which is placed at Page 4 of the paper book and pointed out that assessee had claimed TDS of Rs. 5,81,641/- being the TDS deducted u/s 194LA of the compensation received but however Revenue has granted credit for TDS to the extent of Rs. 3,51,123/-, being the TDS reflected in revised Form 26AS i.e. updated on 1st July 2019. Ld AR thereafter submitted that various Courts have held that even though if higher income has been declared by the assessee, the Revenue can recover the tax only on the correct income. He therefore submitted that the assessee be taxed only on the portion of the compensation that is due to the assessee as per revised Form 26AS.

JUDGMENT:

Revenue has not placed any material on record to demonstrate that assessee has been issued any subsequent Form 26AS after 1st July 2019 wherein the compensation of Rs.28,56,647/- has been revised upwards by the Revenue. In such circumstances and in view of the foregoing I find merit in the submissions of the Ld AR. I therefore restore the issue back to the file of CIT(A) and direct him to compute correct income and tax in accordance with law after considering the submissions of the assessee and the documents furnished by the assessee. Needless to state that the CIT(A) shall grant adequate opportunity of hearing to both the sides. Thus the ground of assessee is allowed for statistical purposes.

In the result, appeal of the assessee is allowed.

To Read Judgment Download PDF Given Below: