9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 1105 - AT - Income TaxRectification u/s 154 - Denial of the credit of TDS on the income declared and assessed in the hands of the assessee - HELD THAT - There is no dispute that the assessee has offer the income to tax which was received as commission income from M/s Unitech Wireless (East) Pvt. Ltd. The contract income was subjected to TDS and is assessed in the hands of the assessee as a proprietrix of M/s Gupta Electric Works then the TDS on the said income even if deposited in the PAN of the deceased husband of the assessee due to inadvertence or mistake, it would not lead to denial of the claim of credit to the assessee, who has offered the said income to tax. Rule 37BA of Income Tax rules, 1962 also provides the credit of tax deducted at source and paid to the Central Government, if the income on which tax is deducted at source and paid to the Government is offered to tax by the assessee and the deposit is made in the name of other person. There is no dispute that the assessee has offer the income to tax which was received as commission income from M/s Unitech Wireless (East) Pvt. Ltd. The contract income was subjected to TDS and is assessed in the hands of the assessee as a proprietrix of M/s Gupta Electric Works then the TDS on the said income even if deposited in the PAN of the deceased husband of the assessee due to inadvertence or mistake, it would not lead to denial of the claim of credit to the assessee, who has offered the said income to tax. Rule 37BA of Income Tax rules, 1962 also provides the credit of tax deducted at source and paid to the Central Government, if the income on which tax is deducted at source and paid to the Government is offered to tax by the assessee and the deposit is made in the name of other person. Denial of TDS credit to the assessee is not justified. The impugned orders of the Assessing Officer passed u/s 154 as well as Ld. CIT (A) are set aside and the claim of the assessee for TDS credit is allowed. Appeal of the assessee is allowed.
Issues Involved:
1. Denial of TDS credit of ?5,89,348/- deposited in the PAN of the deceased husband of the assessee. 2. Validity of the order under Section 154 of the Income Tax Act. 3. Principles of natural justice and statutory reasonable opportunity of being heard. Issue-wise Detailed Analysis: 1. Denial of TDS Credit of ?5,89,348/-: The primary issue in this appeal is the denial of TDS credit of ?5,89,348/-, which was deposited by the deductor in the PAN account of the deceased husband of the assessee. The assessee, as the legal heir, succeeded the proprietorship of M/s Gupta Electric Works and filed the return of income declaring total income of ?7,72,960/-. The return was processed by the Central Processing Unit (CPC) under Section 143(1), and an adjustment was made due to the TDS credit being in the name of the deceased husband. The Tribunal noted that the income on which TDS was deducted was offered for tax by the assessee, and therefore, the TDS credit should be allowed to the assessee. Rule 37BA of the Income Tax Rules, 1962, supports this view, providing that credit for tax deducted at source should be given if the income is offered to tax by the assessee, even if the TDS is in the name of another person. The Tribunal also referenced the decision of the Hon'ble Andhra Pradesh High Court in CIT vs. Bhooratnam & Company, which held that credit for TDS should be granted if the income is assessed in the hands of the assessee. 2. Validity of the Order Under Section 154 of the Income Tax Act: The assessee challenged the order under Section 154 of the Act, which was rejected by the Assessing Officer and upheld by the CIT (A). The Tribunal found that the order under Section 154 was erroneous as it did not consider the relevant facts that the income on which TDS was deducted was offered for tax by the assessee. The Tribunal emphasized that the wrong submission of PAN should not debar the claim of TDS credit, especially when the income is included and assessed in the hands of the assessee. The Tribunal also referred to Circular No. 22 of 1961, which allows for the credit/refund due to the estate of a deceased person to be paid to the legal heir upon furnishing an indemnity bond. 3. Principles of Natural Justice and Statutory Reasonable Opportunity of Being Heard: The assessee argued that the order under Section 154 was passed without granting a statutory reasonable opportunity of being heard, which is contrary to the principles of natural justice. The Tribunal agreed with the assessee, noting that the Assessing Officer did not appreciate the admitted facts and failed to provide an opportunity for the assessee to present her case. The Tribunal emphasized the importance of following the principles of natural justice and providing a fair opportunity to the assessee before passing any order. Conclusion: The Tribunal concluded that the denial of TDS credit to the assessee was unjustified and arbitrary. The impugned orders of the Assessing Officer and the CIT (A) were set aside, and the claim of the assessee for TDS credit was allowed. The appeal of the assessee was allowed, and the order was pronounced in the open court on 22nd March 2021.
|
