In a recent decision, the Income Tax Appellate Tribunal ( ITAT ) has allowed the appeal of an assessee, directing the Assessing Officer ( AO ) to verify the documents related to Tax Deducted at Source (TDS) deposits. The assessee, PNC SPSCPL (JV), filed an appeal against the order of the Commissioner of Income Tax (Appeals), which had upheld the AO’s decision treating the assessee as an assessee-in-default for non-compliance of TDS provisions.

The dispute arose from the assessee’s failure to deduct TDS on payments made to its subcontractors, PNC Infratech Limited and S.P. Singla Construction Pvt. Ltd. The AO had raised a demand of Rs. 4,99,030 against the assessee under sections 201(1) and 201(1A) of the Income-tax Act, 1961. Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here During the appellate proceedings, the assessee contended that it had duly deducted and deposited the TDS amount. However, the CIT(A) dismissed the appeal for want of evidence.

The assessee then filed a second appeal before the ITAT. Before the ITAT, the assessee submitted evidence in the form of challans, TDS returns, and Form No. 16A, which showed that the TDS amount had been deposited on time. The ITAT observed that the assessee had filed these documents for the first time before the Tribunal, and therefore, they required verification.

Bench of Ramit Kochar ( Accountant Member ) allowed the appeal of the assessee, directing the AO to verify the documents and grant appropriate credit for TDS/interest deposited by the assessee. The Tribunal also expressed its disappointment at the manner in which the authorities below had dismissed the contentions of the assessee without verifying the facts. The ITAT noted that the department has access to digital data and can easily verify the contentions of the assessee using technology. The Tribunal observed that this would have saved the assessee and the authorities from the hassle of litigation. In Conclusion,the appeal was allowed,subject to directions.