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Income Tax Appellate Tribunal, PANAJI ‘SMC’ BENCH : PANAJI
Before: SHRI SATBEER SINGH GODARA
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI ‘SMC’ BENCH : PANAJI (THROUGH VIRTUAL HEARING) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
ITA.No.6/PAN/2021 Assessment Year 2018-2019
Shri Prasad Raghoba Naik, The Assistant Director of H.No.31, Near Govt Ground, vs., Income Tax, CPC, Khairikhattem, Sanguem, Income Tax Department, Goa – 403 704 Bengaluru – 560 500. PAN ALFPN7563F Karnataka. (Appellant) (Respondent) For Assessee : Shri Kapish Kakodkar For Revenue : Shri N. Shrikant Date of Hearing : 23.11.2022 Date of Pronouncement : 25.11.2022 ORDER
This assessee’s appeal for assessment year 2018-19, arises against the CIT(A)-12, Bengaluru’s order dated 25.03.2021, passed in case ITA.No.10631/CIT(A)-12/2019-20, in proceedings u/s. 154 of the Income Tax Act, 1961 (in short "the Act").
Heard both the parties. Case file perused.
The assessee raises the following substantive grounds in the instant appeal.
“That the impugned Appellate Order u/s. 250 dated 25.03.2021 is patently against law, contrary to the facts on record, unjust, erroneous and passed with complete non application of mind. The same merits to be quashed on this ground alone. 2. The learned CIT (Appeals) - 12, Bengaluru was not justified in not giving credit of the TDS as available in the form 26 AS.
2 ITA.No.06/PAN/2021 3. The learned CIT (Appeals) - 12, Bengaluru erred in considering the fact that the appellant is governed by the system of community of property under the Portuguese Civil Code of 1867 which is in force in the State of Goa. 4. The learned CIT (Appeals)- 12, Bengaluru erred in considering the fact that the appellant apportioned half of the income earned by the appellant with his spouse Mrs. Pranavi Prasad Naik (PAN :AWZPN7487M) as required from the assesses governed by u/s. 5 A of Income Tax Act, 1961. 5. The learned CIT (Appeals) - 12, Bengaluru acted erroneously in stating that TDS credit can be given only on apportioned income, when as per the provisions of Section SA of Income Tax Act, 1961 specify that only the income shall be apportioned equally between husband and wife. 6. The learned CIT (Appeals)-12, Bengaluru erred in considering the fact that the appellant's 26AS disclosed the TDS Credit of Rs.2,66,599/- but credit for only Rs.1, 76,159/- was given while processing the return thus reducing the refund received by Rs.90,440/-. 7. The learned CIT (Appeals) - 12, Bengaluru acted erroneously in not considering the fact that the above TDS Credit of Rs.2,66,599/- was entirely availed in the appellant's Income tax return. No TDS from this amount was availed in the appellant's spouse's Income Tax return. Hence the allowance of full TDS Claim in the hands of the appellant would not have caused any revenue loss to the Department. 8. The appellant craves leave to add, amend, modify and/or alter any of the grounds whenever considered necessary.
3 ITA.No.06/PAN/2021 9. For these and other grounds that may be submitted at the time of hearing of appeal, the appellant prays that the appeal may please be allowed. 10. The appellant prays that appeal may be admitted, heard and order may be passed rendering justice to the appellant.”
Both the learned representatives next invited my attention to the CIT(A)’s detailed discussion in issue as follows :
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It is noted during the course of hearing that the most clinching admitted fact herein is that the assessee is indeed governed by the Portuguese Civil Code and, therefore, he is covered under the application of the special provision i.e. section 5A of the Act wherein any income arising under the specified heads of income [other than the head salaries] has to be apportioned between the spouse(s) to the extent of 50% each. The legislature had inserted this special provision vide Finance Act 1994 with retrospective effect from 01.04.1963. This followed the CBDT’s circular No.684 dated 10.06.1994 making it clear that both the spouses covered under this special scheme are further entitled to claim their respective separate deductions under the provisions of Chapter-VIA and rebate under Chapter-VIII; as the case may be.
7 ITA.No.06/PAN/2021 5.1. It is at this stage that the learned counsel raised his vehement contentions that the scheme of the Act; and more particularly, in Chapter-XVII dealing with “Collection and Recovery Of Tax” nowhere supports the Revenue’s stand that the TDS collected in issue involving such an assessee covered under the Portuguese Civil Code by virtue of section 5A of the Act, also has to undergo the consequential apportionment. Mr. Kakodkar quoted Rule 37BA of the Income Tax Rules, 1962 that the same nowhere prescribes for such an apportionment whilst granting TDS credit to the spouses independently covered under section 5A of the Act.
The Revenue has strongly supported the CIT(A)’s foregoing discussion.
I have given my thoughtful consideration to the foregoing respective stands and find merit in the Revenue’s arguments. It is made clear that section 5A is a special provision wherein the legislature has prescribed in the latter limb thereof that “and the remaining provisions of the Act shall apply accordingly.” I, therefore, apply the age old principle generilia specialibus non derogant i.e., the other general provisions of the Act in other chapters’ must make way for the same for all intents and purposes. I further find from a perusal of section 198 of the Act that all TDS amounts deducted under Chapter XVII of the Act, are indeed deemed as income received of the concerned assessee. I wish to reiterate here that the legislative expression “assessee” herein must be read as “the spouses
8 ITA.No.06/PAN/2021 assessees” in light of section 5A of the Act and therefore, such TDS amount has to be consequentially apportioned going by scheme of the Act. The assessee’s instant arguments seeking entire TDS credit in his hands stand rejected therefore.
7.1. Learned counsel lastly stated that Rule 37BA in Income Tax Rules does not provide for such an apportionment for the purpose of claiming TDS credit and, therefore, the assessee husband herein has rightly raised the claim of entire TDS credit. There is hardly any merit in the assessee’s contentions as Rule 37BA (2) read with “Proviso” thereunder casts a liability on the concerned deductee /assessee herein to file a declaration with the deductor that the whole or any part of the income on which the TDS has to be deducted, which is assessable in the hands of any other person i.e., the spouse herein by virtue of section5A of the Act. The assessee could hardly be allowed to take advantage of his own failure in not furnishing the necessary declaration before his deductor therefore. His instant last argument also fails. Rejected accordingly.
This assessee’s appeal is dismissed in above terms.
Order pronounced in the open court on 25.11.2022.
Sd/- [SATBEER SINGH GODARA] JUDICIAL MEMBER Pune, Dated 25th November, 2022 VBP/-
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Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Panaji ‘SMC’ Bench, Panaji 6. Guard File. //By Order//
Assistant Registrar, ITAT, Pune Benches, Pune.