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Facts
The assessee, B.V. Kapadia HUF, filed its return of income for AY 2021-22, declaring a total income of ₹18,31,470/-. The return was processed under section 143(1) of the Income Tax Act, 1961, resulting in a demand of ₹1,18,420/- due to short-granting of TDS credit related to dividend income. The assessee's appeal before the CIT(A) was dismissed.
Held
The Tribunal held that the assessee's appeal was partly allowed for statistical purposes. The CIT(A)'s order was set aside, and the matter was remitted back to the AO for granting summary relief concerning the TDS credit for dividend income. The assessee was to be given a reasonable opportunity to present its case.
Key Issues
Whether TDS credit for dividend income can be denied due to a mismatch in the deductor's reporting when the beneficial owner has offered the income and paid tax.
Sections Cited
250, 143(1), 139(5), 139BA, 199, 37BA(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the Assessee is against the order of the Addl/JCIT(A)-2, Pune [hereinafter referred to as Ld. ‘Addl/JCIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2021-22 dated 22.09.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in dismissing the appeal filed by the appellant against the intimation u/s 143(1) dated 28.04.2022 without appreciating the facts, evidences, and legal submissions placed on record.
The learned CIT(A) erred in confirming the action of CPC in short-granting TDS credit relating to dividend income, on the ground that the shares stood in the name of Smt. Anima Bhupendra Kapadia, ignoring the fact that the beneficial ownership and income belonged to the appellant HUF and that dividend income had been duly offered to tax by the appellant.
The learned CIT(A) grossly erred in holding that filing a revised return u/s 139(5) was the only remedy, ignoring the settled principle that where income ITA No.: 2879/KOL/2025 Assessment Year: 2021-22 B.V. Kapadia HUF. has been duly offered by the correct assessee, corresponding TDS credit cannot be denied merely due to a mismatch in deductor's reporting in Form 26AS.
The learned CIT(A) erred in holding that the remedy of filing an updated return u/s 139(BA) is not available to claim such credit. The finding is misplaced since the issue pertains not to reduction of tax liability or new refund, but to proper grant of TDS credit already deducted and deposited to the credit of the appellant.
The learned CIT(A) failed to appreciate that as per section 199 read with Rule 37BA(2), TDS credit is to be given to the person in whose hands the related income is assessable. The appellant, being the beneficial owner of shares and recipient of dividend income, is legally entitled to TDS credit irrespective of deductor's reporting error.
The learned CIT(A) erred in not appreciating the detailed evidences filed by the appellant (including proof of beneficial ownership, dividend credit, and income disclosure in ROI) and summarily dismissed the appeal without proper adjudication, thereby violating the principles of natural justice.
Without prejudice to the above, the demand raised consequent to short- grant of TDS credit is bad in law and deserves to be deleted.
The appellant craves leave to add, amend, alter, or withdraw any ground at the time of hearing.”
Brief facts of the case are that the assessee had filed its return of income on 31.12.2021 declaring total income of ₹18,31470/-. The said return was processed u/s 143(1) of the Act vide order dated 28.04.2022 and raising demand of ₹1,18,420/-. Aggrieved by the intimation passed u/s 143(1) of the Act, the assessee filed an appeal before the Ld. Addl/JCIT(A) who vide order dated 22.09.2025 dismissed the appeal of the assessee by holding as under: “6.1 Ground no. 1 to 4: The above contention/submission made by the appellant and all the supporting documents/evidences submitted during the course of appellate proceedings, have been thoroughly perused and considered carefully. The appellant has challenged the action of the CPC for short-granting of credit towards TDS claimed in the ROI filed for A.Y. 2021- 22 stating that "As per the statement of fact the shares against which dividend has been received was held in the name of Ms Anima Bhupendra Kapadia (PAN AEZPK6241K) sister of Karta Mr Vinay B Kapadia. Beneficial ownership of the shares belonged to B V Kapadia HUF." If any omission or ITA No.: 2879/KOL/2025 Assessment Year: 2021-22 B.V. Kapadia HUF. wrong statement was noticed in the return of income, the appellant was required to file a revised return under section 139(5) of the Income-tax Act within the prescribed time-limit.
2 Further, it is pertinent to mentioned here that an updated return (ITR-U) can be filed within 24 months from the end of the relevant AY. However, an updated return cannot be used to claim a new refund or reduce a tax liability. So, filing an updated return to newly claim that dividend with TDS credit is not permitted. Thus, all the grounds raised by the appellant-in present appeal are treated as dismissed.
3 Ground No. 5: The appellant has not raised any new grounds/arguments of appeal during hearing hence no separate adjudication is required so far. Therefore, this ground of appeal is dismissed.
As a result, the present appeal of the appellant is Dismissed.”
Aggrieved with the order of the Ld. Addl/JCIT(A), the Assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined.
The assessee had sought a judgement, but the same was withdrawn and the appeal was heard. It was stated that there was no proper compliance before the Ld. AO, CPC, Bengaluru as well as before the Ld. CIT(A) and requested that the matter may be remanded to the Ld. AO so that the assessee can properly represent its case. Since there was no proper compliance before the Ld. AO, in the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. Addl/JCIT(A) and remit the matter back to the Ld. AO for grant of summary relief in respect of the credit for TDS relating to the dividend income as in the case of an HUF, the shares are held in ITA No.: 2879/KOL/2025 Assessment Year: 2021-22 B.V. Kapadia HUF. the names of the members of HUF and the required credit for TDS out of the dividend income was also required to be allowed to the HUF. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its claim and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 27th February, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 27.02.2026 Bidhan (Sr. P.S.) ITA No.: 2879/KOL/2025 Assessment Year: 2021-22 B.V. Kapadia HUF. Copy of the order forwarded to:
B.V. Kapadia HUF, C/o M/s. Salarpuria, Jajodia & Co. , 7, C.R. Avenue, 3rd Floor, Kolkata, West Bengal, 700072. 2. D.C.I.T, CPC, Bengaluru.
Addl/JCIT(A)-2, Pune.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order