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Facts
The assessee filed an appeal against the order of the CIT(A) who denied TDS credit on house property income. The TDS was deducted in the name of the assessee's wife, but the assessee claimed it, leading to a denial by the AO and confirmation by the CIT(A).
Held
The Tribunal observed that the rental income and TDS were treated similarly in the preceding year (AY 2019-20) and allowed by the NFAC. Therefore, following the principle of consistency, the AO was directed to allow the relevant tax credit to the assessee.
Key Issues
Whether the assessee is eligible for TDS credit when the TDS was deducted in the name of spouse, and if denial of credit aligns with principles of natural justice and consistency with prior years' treatment.
Sections Cited
143(1), 199, 37BA, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’: NEW DELHI
(Assessment Year: 2020-21) Ashok Lavasa, vs. ACIT, Circle 67 (1), House No.32, New Moti Bagh, Delhi. New Delhi – 110 003. (PAN : AATPL5376R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Lalit Mohan, CA REVENUE BY : Shri Sanjay Kumar, Sr. DR Date of Hearing : 13.03.2025 Date of Order : 21.05.2025 O R D E R
The assessee has filed this appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 09.10.2024 for the Assessment Year 2020-21.
Brief facts of the case are, the assessee filed appeal on 18.12.2021 for the year under consideration against the order of CPC passed u/s 143(1) of the Income-tax Act, 1961 (for short ‘the Act’) on 26.02.2021 and the order was served on 26.02.2021. There was a delay of 264 days in filing the appeal before the ld. CIT (A). Ld. CIT (A) condoned the delay in filing the appeal in view of the principles of natural justice. Ld. CIT (A)
TDS credit of Rs.34,456/- which was made on house property income. He observed that the assessee was having income from house property owned jointly by him along with his spouse and children and earned on the total rental income from house property of Rs.19,84,280/-, tax was deducted of Rs.98,428/-. He observed that this TDS was done in the hands of his spouse, Mrs. Novel Singhal Lavasa as per Form 26AS produced by the assessee but the TDS was claimed by the assessee of Rs.34,456/-. He further observed that the assessee has produced the details of TDS claimed as under :- (i) Novel Singhal Lavasa : Rs.29,510/- (ii) Assessee : Rs.34,456/- (iii) Avny Lavasa : Rs.34,456/-
However, ld. CIT (A) observed that since TDS was done in the hands of his spouse, Smt. Novel Singhal Lavasa, credit can be allowed in the hands of the spouse only. He also made an observation that assessee’s spouse may put a rectification application before the Assessing Officer. Accordinlgy, he confirmed the order of Assessing Officer.
Aggrieved against the above order, assessee is in appeal before us raising following grounds of appeal :-
1. That the action of learned Commissioner of Income Tax (Appeals), Addl/JCIT (A), Thiruvanantpurarn, (hereinafter referred to as "CIT(A)") has 26.2.2021 u/s 143(1) of the Act wherein the learned Assessing Officer had raised a demand of Rs.36,l80/- is illegal, invalid and without jurisdiction and therefore such order deserves to be quashed as such.
2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining the intimation dated 26.2.2021 u/s 143(1) of the Act wherein credit of TDS of Rs.8,45,343/~ was granted as against claim of Rs. 8,79,799/- without any valid basis and therefore such an intimation is unsustainable. 3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that amount of Rs. 34,456/~ represents TDS deducted in the hands of the spouse of the appellant in respect of rental income taxed in the hands of the appellant and therefore denial of such credit is not in accordance with law and in fact is contrary to statutory provision section 199 of the Act read with Rule 37BA of Income Tax Rules, 1962. 3.1 That finding of the learned "Commissioner of Income Tax (Appeals) that "since TDS was done in the hands of his spouse, Smt. Novel Singhal Lavasa, credit can be allowed in the hands of spouse only" is contrary to provisions of section 199 read with Rule 37BA of the Income Tax Rules' 1962 and therefore untenable. 3.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once identical claim of deduction stood allowed in preceding year, the addition so made and, upheld was contrary to principles of consistency and untenable. 4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the adjustment made was without jurisdiction and beyond the scope and ambit of the provisions contained in section 143(1) of the Act and thus unsustainable. 5 That even otherwise the learned Commissioner of Income Tax (Appeals) has also failed to appreciate that the adjustments so made in the intimation dated 26.2.2021 u/s 143(1) of the Act are debatable and contentious issues and thus untenable.
6. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that intimation dated 26.2.2021 was made without granting opportunity and without reasons and therefore such an intimation was otherwise vitiated and nullity. Prayer :It is therefore, 'prayed that, it be held that adjustment made is without jurisdiction and demand raised alongwith interest may kindly be held to be not tenable and not in accordance with law and appeal of the appellant be allowed.”
At the time of hearing, ld. AR of the assessee submitted that there are three owners who have received the rental income and TDS was deducted and credited in the name of the assessee’s wife. The assessee has declared the rental income as well as claimed the relevant TDS which was denied by the AO. In this regard, he brought to my notice page 177 of the paper book wherein relevant chart of the rental income was disclosed and for the sake of clarity, it is reproduced below :-
He brought to my notice that the whole TDS was deducted in the name of Ms. Novel Singhal Lavasa and credited only in her name. Further he brought to my notice page 94 of the paper book which is appellate order passed u/s 250 of the Act for AY 2019-20 dated 07.12.2022 in which NFAC, Delhi has allowed the claim of the assessee on the exact similar facts. Further he brought to my notice page 59 of the paper book which is return of income of Ms. Novel Singhal Lavasa, wife of the assessee wherein she has declared rental income as well as claimed TDS to the extent of rental income declared by her. He also brought to my notice page 143 of the paper book which is Form 26AS of assessee’s wife wherein the details of extract of total rental income and the relevant TDS deduction are given. He prayed that the claim of the assessee may be allowed.
On the other hand, ld. DR of the Revenue fairly agreed that direction may be given to the AO as per the findings in AY 2019-20.
Considered the rival submissions and material placed on record. I observed that the rental income received by the assessee along with spouse and children, they are equally distributed. The same was declared in their respective return of income and also claimed the respective TDS. The deductor has deducted the TDS and deposited in the name of the first person mentioned in the joint rental Agreement. Accordingly, all the TDS are being deducted in the hands of the first person i.e. assessee’s wife and it is brought to my notice that assessee’s wife has declared the rental income and has also claimed the TDS to the extent the rental income declared by her. Similarly, the assessee has declared the rental income and also claimed the relevant TDS which was denied by the AO.
I observed that in AY 2019-20, the claim of the assessee was already allowed by NFAC and the relevant order is already placed on record. Therefore, it is settled proposition. I direct the AO to allow the same and direct him to allow the relevant tax credit to the assessee. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on this 21st day of May, 2025.