RAVINA NISHANT BHOJWANI,MUMBAI vs. ASSISTANT DIRECTOR OF INCOME TAX CPC BANGLORE, MUMBAI

The present appeal has been preferred by the Assessee against the order, dated 18/03/2024, passed by the Learned Additional/Joint Commissioner of Income Tax (Appeal)-2, Gurugram [hereinafter referred to as the ‘CIT’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had disposed off the appeal against the Intimation Order, dated 28/10/2022, passed under Section 143(1) of the Act for the Assessment Year 2021-22. 2. The Appellant has raised following grounds of appeal : “1. The Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-2,

The CIT(A) erred confirming the action of AO in not giving credit for Tax Deducted at Source (TDS) of Rs.15,62,722/- while computing the income u/s.143(1) of the I.T. Act.

The Appellant is an individual deriving income from Capital Gain and Other Sources. The Appellant had filed the Return of Income for the Assessment Year 2021-22 on 28/12/2021 declaring total income of INR.1,32,49,840/- and claiming refund of INR.3,120/-. The Return of Income was processed under Section 143(1) of the Act on 28/10/2022. While the no variation was made in the returned income, the Centralized Processing Centre (CPC) did not grant credit of Tax Deducted at Source (TDS) aggregating to INR.15,62,722/- on the ground that the same was not reflected in Form 26AS of the Assessee. Accordingly, a demand of INR.18,92,220/- was raised upon the Assessee.

Being aggrieved, the Assessee preferred the appeal before the CIT(A). In the appellate proceedings before the CIT(A), the Assessee explained that the Assessee had received gift from her father [Mr. Ravi Ghai - PAN: AAOPG7107J] in terms of Declaration of Gift, dated 01/04/2020. The gift received included the following investments which were in the nature of Bank Fixed Deposits, Mutual Funds, ICD, Equity Shares etc: (a) Fixed Deposit in Allahabad Bank (5 number of FD’s) A.Y.2021-2022

1. During the relevant previous year, following income had accrued from the above investments received as gift: Particulars Interest Amount TDS (INR)

The Appellant offered to tax the above income of INR.1,11,45,307/- and had claimed credit of corresponding TDS of INR.15,62,722/- in the returned of income for the Assessment Year 2021-2022. It was submitted before the CIT(A) that since the CPC has accepted the income offered to tax, the credit of corresponding tax deducted at source should also be allowed to the Appellant. However, vide order dated 18/03/2024, the CIT(A) rejected the aforesaid submission of the Appellant on the ground that the corresponding TDS was not appearing in Form 26AS of the Appellant. However, the CIT(A) directed the Assessing Officer to allow credit of tax deducted at source if and when it was credited to the Account of the Appellant. A.Y.2021-2022

Not being satisfied with the above directions given by the CIT(A), the Appellant has preferred the present appeal before the Tribunal.

The Learned Authorized Representative for the Appellant reiterated the submissions made before the Authorities below, while the Learned Departmental Representative placed reliance upon the order passed by CIT(A).

We have considered the rival submissions and perused the material on record. It is admitted position that income of INR.1,11,45,307/- accruing/arising from the investments/assets received by the Appellant as gift from her father was offered to tax as income for the Assessment Year 2021-2022 and the same was accepted as income of the Appellant. During the course of hearing the Learned Authorised Representative for the Appellant had submitted that the Appellant should be granted credit for TDS as per Section 199 of the Act and had placed on record copy of order, dated 04/09/2024, passed by the CIT(A) in the case of Ms. Gaurika Chandhok [PAN AADPC2028F]. It was submitted that in identical facts and circumstances CPC had not granted credit of TDS to the sister of the Appellant who had also received similar gifts from her father. The CIT(A) allowed the appeal and vide order, dated 04/09/2024, directed the Assessing Officer to grant credit of TDS. The relevant extract of the aforesaid order of the CIT(A) reads as under:

Computation of Total Income of Mr. Ravi Ghai for A.Y.2021-22 is enclosed at Page No.210 to Page No.211. A.Y.2021-2022

Statement showing reconciliation of TDS appearing in Form 26AS of Mr. Ravi Ghai, TDS claimed by him in his return of income, TDS claimed by Appellant Mrs. Gaurika Chandok and his other daughters alongwith Form 26AS is enclosed at Page No.212 to Page No.219. 4. Declaration of Mr. Ravi Ghai that he have not claimed TDS relating to assets gifted to his daughters in his return of income (Refer Page No.220). 8. On verification from documents, it is seen that the appellant has offered the income to tax from investments received as gift from her father. The father of the appellant Shri Ravi Ghai neither offered the income of Rs.61,02,775/- nor claimed corresponding TDS of Rs.16,19,169/-. From page 207-208 of Paper Book it is seen that TDS if Rs.16,19,169/- is appearing against PAN:AADPC2028F which is of the appellant. Relevant part of the paper book is as under: A.Y.2021-2022

Ground 3 is on levy of interest under Section 234A, 234B and 234C of the Act, which is consequential in nature.

In the result appeal is allowed.”

On perusal of the above order of the CIT(A) passed in the case of the sister of the Appellant, we find that the CIT(A) has reproduced extract of the return of income filed by the father of the Appellant in paragraph 9 of the said order. It can be seen that the father of the Appellant has not claimed credit of tax deducted at source in respect of income from investments gifted to the daughters with their respective PANs mentioned in the respective entries [highlighted in the table hereinabove]. We note that there is not dispute as to the nature of income or the hands in which the income of INR.1,11,45,307/- should be brought to tax. The Appellant had offered the aforesaid income of INR.1,11,45,307/- to tax as her income for the Assessment Year 2021-2022 and the Assessing Officer has accepted the same. It is the case of the Appellant that once the Assessing Officer has accepted the income offered to tax as income of the Appellant the corresponding TDS credit of INR.15,62,722/- should also be granted to the Appellant as per Section 199 of the Act. It has been contended that the aforesaid TDS credit has not been claimed by her father. Similar, claim made by the sister of the Appellant has been accepted in appeal preferred by her sister before the CIT(A) vide order dated 04/09/2024. We note that in the case of the Appellant also the CIT(A) has in principle accepted that the credit of tax deducted at source should be granted to the Appellant and has in conclusion stated that ‘the appeal is allowed’. It is not the case of the Revenue that the Appellant or her family members have acted in a malafide manner or that the Declaration of Gift, dated 01/04/2020, is not genuine. Therefore, keeping in view the peculiar facts and circumstances of the present case, we direct the Assessing A.Y.2021-2022

In result, the present appeal preferred by the Assessee is allowed for statistical purposes.