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Facts
The assessee-Trust, formed from the will of deceased Veena Patodia, had interest income credited to its accounts. However, the corresponding TDS was deducted under the deceased's PAN and not reflected in the Trust's Form 26AS. Consequently, the CPC denied TDS credit, a decision upheld by the ld. CIT(Appeals).
Held
The Tribunal held that since the interest income accrued to and was accounted for by the assessee-Trust, and the corresponding TDS was reflected in the Form 26AS of the deceased (whose will formed the Trust), the CPC was incorrect in denying the TDS credit to the Trust. The grounds raised by the assessee were allowed.
Key Issues
Whether TDS credit should be allowed to a trust when income is accounted for by the trust but TDS is deducted under the PAN of the deceased person from whose will the trust was formed, and not reflected in the trust's Form 26AS.
Sections Cited
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2016-2017 Veena Patodia Memorial Trust,………………..Appellant 3, Tollygunge Circular Road, Kolkata-700053 [PAN:AACTV2102N] -Vs.- Income Tax Officer,…………………..…………..Respondent Ward-30(1), Kolkata, Aayakar Bhawan, Dakshin, 2, Gariahat Road (South), Kolkata-700031 Appearances by: Shri Sunil Surana, A.R., appeared on behalf of the assessee Shri Somnath Das Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: May 19, 2025 Date of pronouncing the order: August 06, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 13.02.2025 passed for Assessment Year 2016-2017.
(A.Y. 2016-2017) Veena Patodia Memorial Trust 2. Brief facts of the case are that the assessee-Trust was created pursuant to the will of the deceased Veena Patodia so that all the income accruing to Late Veena Patodia can be considered in the hands of the Trust. The Interest income accruing to Late Veena Patodia was credited in the accounts of the assessee-Trust. However, the corresponding TDS was deducted by the deductors in the PAN of the deceased Late Veena Patodia, an individual. This income has been transferred subsequent to the death of Veena Patodia, which has proceeded to offer it for taxation. However, the TDS corresponding to this income has not travelled in Form 26AS of the assessee-Trust. Unless the same is done, CPC cannot give credit to the said TDS. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals) and ld. CIT(Appeals) dismissed the appeal of the assessee.
On being aggrieved, the assessee preferred an appeal before the ITAT and raised the following issues:- “(1) For that the ld. CIT(A) erred in upholding the action of CPC in not giving full credit of taxes deducted at source as claimed in the return of income only on the ground of non-reflection of the TDS in Form 26AS of the assessee (which was reflected in Form 26AS of the deceased under whose will, the present Trust was formed), when the corresponding income was duly accounted for. (2) For that in the alternative, the CPC may be directed to exclude the corresponding income in the hands of the assessee when the credit of corresponding TDS was not allowed.
I have heard both the sides. It was the submission of the ld. Counsel for the assessee that in support of the claim of the assessee, the assessee filed Form 26AS of Late Veena Patodia by (A.Y. 2016-2017) Veena Patodia Memorial Trust way of paper book in pages 8 and 9, which is evident that the TDS of Rs.4,260/- and Rs.19,159/- corresponding to interest income of Rs.42,600/- and Rs. 1,91,556/- is duly reflected in the Profit & Loss account of the Trust, which is reflected in page 7 of the paper book ( 2nd and 3rd item). He further submitted that the same was also offered for taxation for which the copy of ITR of the Trust and computation of income are also enclosed in paper book at pages 1 to 6. The ld. Counsel for the assessee pleaded that the credited amount of TDS should have been clubbed to the Trust.
On the other hand, ld. Departmental Representative relied on the order passed by the ld. CIT(Appeals) and pleaded before the Bench to uphold the order passed by the ld. CIT(Appeals).
I have perused the material available on record. It is an admitted fact that the interest income acquiring to Late Veena Patodia was credited in the accounts of the assessee-Trust. It is also an admitted fact that the corresponding TDS was deducted by the deductors in the PAN of the deceased Late Veena Patodia and the same was clearly reflecting in Form 26AS of Late Veena Patodia, which is filed in the paper book at pages 8 and 9. It is also an admitted fact that the assessee-Trust was created pursuant to the will of the deceased Veena Patodia so that all the income acquiring to Late Veena Patodia can be considered in the hands of the assessee-Trust. Therefore, considering the above facts and circumstances of the case and also Form No. 26AS, I have no hesitation to come to the conclusion that the corresponding TDS was deducted by the deductors in the PAN of the deceased Late (A.Y. 2016-2017) Veena Patodia Memorial Trust Veena Patodia. Therefore, I am of the view that the ld. CIT(Appeals) is not correct in upholding the action of CPC in not giving full credit of taxes deducted at source as claimed in the return of income on the ground of non-reflection of the TDS in Form 26AS of the assessee, since the same was reflected in Form 26AS of the deceased under whose will, the present Trust was formed. Therefore, the grounds raised by the assessee are allowed. The adjustment made by the CPC is not warrant.