Siddhartha Nautiyal ORDER
Siddhartha Nautiyal, Member (J)
1. This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-8, Ahmedabad in Appeal no. CIT(A)-4/10209/2018-19, in proceeding u/s. 154 vide order dated 10/05/2019 passed for the assessment year 2016-17.
2. The assessee has raised the following grounds of appeal :-
"1. The C.I.T.(A) erred in not allowing the credit of TDS of Rs. 2,50,100/- brought forward from the earlier year and claimed by the Appellant during the current year in respect of the professional income received by the Appellant during the current year and in dismissing the appeal.
2. The C.I.T.(A) failed to appreciate that if the payer follows mercantile system of accounting and if the recipient like the Appellant follows cash system of accounting, this type of mismatch is bound to happen and the Income tax Department is required to adjust the mismatch in the interest of justice otherwise it will turn out to be not a case of proper taxation but a case of downright misappropriation.
3. The CIT(A) ought to have allowed the appeal of the Appellant.
4. The appellant craves leave to add, amend or alter the aforesaid grounds of appeal at the time of hearing if the need arise
Total tax effect Rs. 2,50,100/-"
3. The brief facts of the case are that the assessee who was a practising advocate, filed its return of income for assessment year 2016-17 showing total income of ` 1,08,85,460/- and claimed TDS credit of ` 12,05,147/- in respect of professional fees received during the year. The assessee has been consistently following cash basis of accounting as per section 145 of the Act, since inception. As per the rectification order passed u/s. 154 of the Act, TDS credit of ` 2,50,100/-, brought forward from earlier assessment year i.e. assessment year 2015-16 was not granted to the assessee. The reason for non-grant of TDS was that the payer/deductor had deducted the above TDS on the basis of "accrual system" when the professional services were rendered by the assessee in assessment year 2015-16, while the assessee has claimed credit for the above TDS in assessment year 2016-17, when the aforesaid amount was "received" by the assessee, since the assessee has been following cash basis of accounting since inception and accordingly, TDS is being claimed in the year when such income is "received" and offered to tax as his income by the assessee, in accordance with the provisions of Rule 37BA read with section 199(3) of the Act. Hence the aforesaid tax credit mismatch is primarily because of the fact that Income Tax Department-CPC gives credit of TDS which stands reflected in the online computer records i.e. Form 26AS of the previous year when tax has been deducted. Since the method of accounting differs between the deductor entities and the assessee, the same results into mismatch between the TDS as is reflected in Form 26AS which is a summary of the TDS deducted during the financial year by various deductors and one that is claimed by the assessee as per return of income. As per the system employed by the assessee, though the expenditure has been booked by the deductors in assessment year 2015-16, but the related payment has not been shown as a receipt/turnover by the assessee in his return of income for assessment year 2015-16 as the amount has not been received till 31-03-2015.
4. All the above facts were explained before Ld. CIT(Appeals), however, he dismissed the assessee's appeal on the ground that credit for the same should have been claimed by the assessee in assessment year 2015-16 itself i.e. in the year when the payer/dedu........