₹26 Lakh TDS Shortfall: ITAT Orders Full Claim for Schindler India

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench recently directed the Assessing Officer (AO) to allow Schindler India Private Limited to claim the full Tax Deducted at Source (TDS) amount of ₹26,36,208, after verifying Form 26AS. Schindler, a leading elevator and escalator manufacturing company, had filed appeals for Assessment Years 2013-14 and 2014-15.

The case primarily revolved around a shortfall in permitted TDS, but also involved several other issues such as:

• Transfer pricing adjustments on royalty and management charges

• Additions related to provisions for bad and doubtful debts

• Disallowance of employee provident fund contributions

• Denial of MAT credit

• Levy of interest and penalties

Background of the Case

While multiple grounds were raised by Schindler India, the Tribunal focused on the TDS credit shortfall. For AY 2013-14, the AO had allowed a TDS claim of ₹11,53,59,382, whereas Form 26AS reflected ₹11,79,95,590, resulting in a difference of ₹26,36,208.

Schindler India argued that the TDS as per Form 26AS was accurate and requested the AO to allow the additional credit. Representatives Chandani Shah and Nidhi Agarwal presented the company’s case, highlighting the discrepancy and urging the Tribunal to direct the AO for necessary adjustments.

On the other hand, Ajay Chandra, representing the Revenue, did not object to the claim beyond the credit reconciliation discrepancy.

Tribunal’s Observations

The two-member ITAT bench, consisting of Vikram Singh Yadav (Accountant Member) and Sandeep Singh Karhail (Judicial Member), carefully examined the submissions and records. Key points included:

• The Revenue did not contest the correctness of the additional TDS claim.

• The claim was based on verified Form 26AS, the official record of TDS deposited and credited.

• The Tribunal concluded that the assessee was entitled to the full TDS credit, subject to verification.

The Tribunal allowed the appeal on this ground for statistical purposes, ensuring Schindler India could claim the ₹26,36,208 difference.

Key Takeaways

1. Form 26AS Verification is Crucial – TDS credits should always match with Form 26AS records to avoid disputes.

2. Accurate Record-Keeping – Companies must maintain proper documentation to substantiate claims before the AO or ITAT.

3. Legal Recourse Can Recover Legitimate Credits – Even minor discrepancies can be rectified through proper appeals.

4. Proactive Representation Matters – Skilled legal representation, as seen in Schindler’s case, can help secure rightful claims.

FAQs

1. What was the TDS shortfall in this case?
The shortfall was ₹26,36,208, where the AO allowed less than the amount reflected in Form 26AS.

2. Which assessment years were involved?
The case pertained to AY 2013-14 and 2014-15.

3. What other issues were raised by Schindler India?
Transfer pricing adjustments, disallowance of employee PF contributions, denial of MAT credit, interest, and penalties.

4. Did the Revenue object to the TDS claim?
No, the Revenue did not raise specific objections beyond credit reconciliation.

5. What is Form 26AS and why is it important?
Form 26AS is a consolidated statement of TDS deposited against the taxpayer’s PAN. It is used to reconcile claims and ensure accurate credit.

Conclusion

The ITAT’s decision reinforces the importance of reconciling TDS with Form 26AS and demonstrates that legitimate claims should be honored when properly documented. Companies must ensure accurate reporting, maintain proper records, and seek legal recourse where discrepancies arise.

This case also highlights the effectiveness of proactive legal representation, enabling businesses like Schindler India to secure rightful tax credits efficiently.