JT RECEIVERS CHETLA AUDDYESTATE,KOLKATA vs. I.T.O., WARD - 29(4), KOLKATA, KOLKATA

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ITA 461/KOL/2022Status: DisposedITAT Kolkata09 February 2023AY 2014-154 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the beneficiaries of the estate had offered the income for taxation and could not claim the TDS credit as it was reflected in the assessee's 26AS. Therefore, disallowing the TDS credit would result in the revenue retaining tax without any party being able to claim it.

What were the facts?

The assessee, an association of persons, claimed TDS credit of Rs. 1,01,450/- in its return showing Nil income. The CPC disallowed this claim as no corresponding income was offered. The CIT(A) upheld this disallowance.

What were the issues?

Whether TDS credit can be disallowed when the income from the source of TDS has been offered to tax by the beneficiaries, even if they cannot claim the credit directly due to its reflection in the assessee's 26AS.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH ‘B’, KOLKATA

Before: Dr. Manish Borad & Shri Sonjoy Sarma]

Hearing: 21.11.2022Pronounced: 09.02.2023

ORDER

Per Sonjoy Sarma, JM:

1.

This appeal of the assessee for the assessment year 2014-15 is directed against the order dated 11.05.2022 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee in this appeal has taken the following grounds of appeal: “i. The National Faceless Appeal Centre (NFAC) was totally wrong in understanding the case of the appellant and erred in disallowing TDS credit of Rs. 1,01,450/- for the relevant assessment year.

ii. The NFAC was wrong in totally ignoring the decision made by CIT(A), Kolkata-10 on a similar case relating to AY 2013-14 wherein it had allowed the TDS to be credited and refunded to the appellant even though no income was offered by the appellant following the same principle for the said AY.”

2.

At the outset, we find that there is a delay of 32 days in filing of this appeal by the assessee. We after perusing the petition for condonation, we are convinced that the assessee was prevented by sufficient cause from filing the appeal in time hence delay is condoned and appeal is admitted.

Jt. Receivers Chetla Auddyestate 3. Brief facts of the case are that the assessee is an association of persons comprising of co-shares of joint hindu family having properties and filed its return of income for the assessment year 2014-15 on 28.02.2016 in ITR-V, through representative assessee Mr. Ramesh Sharma showing total income at Nil. In the return of income, the assessee has claimed to have TDS credit of Rs. 1,01,447/- deducted from State Bank of India, Chelta. However, there was no income offered against the TDS claimed by the assessee. Therefore, CPC disallowed the claim of TDS and corresponding refund was also denied vide intimation u/s 143(1) dated 16.03.2017.

4.

Aggrieved by the above order, assessee filed an application for rectification u/s 154 of the Act before the AO, CPC, Bangalore but the claim of the assessee was disposed of vide order u/s 154 dated 21.07.2017 without granting any relief to the assessee. Thereafter, the assessee has filed an appeal before the ld. CIT(A) against the intimation order received u/s 143(1) of the Act dated 16.03.2017. However, the appeal of the assessee was dismissed by the ld. CIT(A) observing that assessee has claimed TDS credit but not offering corresponding income for taxation, the credit cannot be allowed to the assessee.

5.

Aggrieved by the above order, assessee preferred an appeal before the Tribunal. At the time of hearing, the ld. AR for the assessee submitted that income from the estate has been offered for taxation by the beneficiary in their respective income tax return, the corresponding TDS credit has not been able to claim by the beneficiary as the same is being reflected in the 26AS

Jt. Receivers Chetla Auddyestate statement of the present assessee. In such a situation, the beneficiary did not have any scope to claim the credit of TDS. In such circumstances, the contention of the ld. CIT(A) stating that the income has not been offered for taxation is not a correct observation. Further, he contended that if the credit of taxation is not allowed to the assessee that credit of TDS cannot be demand by anybody as all the 57 beneficiaries/co-parceners have not claimed the credit of TDS in their respective income tax return as there is no mechanism by which all the 57 beneficiaries/coparceners can claim the benefit of TDS credit which is not reflected in their 26AS statements. He also contended that the revenue cannot be allowed to retain tax deducted at source without credit being available to anybody. This is certainly not the spirit and intention of law. Therefore, the order passed by the ld. CIT(A) may be set aside and allow the claim of the assessee. On the other hand, the ld. DR heavily relied on the decision of ld. CIT(A).

6.

We have considered the rival submission and going through the facts of the case, we find that the income from the said AOP has been offered for taxation by the beneficiary in their return of income and they could not claim the TDS credit as it is being reflected in 26AS statement of the assessee and there is no scope to claim the credit of TDS in the hands of beneficiary. In such a situation, the contention made by the ld. CIT(A) that the income has not been offered for taxation is not a correct observation. From the facts of the case, it is also come to our notice that under similar situation in the prior assessment year 2013-14, the Jt. Receivers Chetla Auddyestate refund has been granted to the assessee but in the current assessment year under consideration, the claim of refund has been denied. In such circumstances, we are of the considered view that the ld. CIT(A) has erred in disallowing TDS credit of Rs. 1,01,450/- for the assessment year in question. Therefore, the order passed by the ld. CIT(A) is set aside and we direct the ld. AO to allow the TDS credit of Rs. 1,01,450/- to the assessee after verification of the fact that income from the estate has been offered for taxation by the individual beneficiaries in their respective income tax returns. Accordingly, appeal of the assessee is allowed for statistical purposes.

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

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