2023 (3) TMI 1297 - AT - Income Tax

Not giving credit of the TDS as available in the form 26 AS - 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 - whether the appellant apportioned half of the income earned by the appellant with his spouse as required from the assesses governed by u/s. 5A of Income Tax Act, 1961? - appellant's 26AS disclosed the TDS Credit but credit of less was given while processing the return thus reducing the refund received HELD 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. 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. 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 - we wish to reiterate here that the legislative expression assessee herein must be read as the spouses 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. As 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 section 5A. 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. Assessee s appeal is dismissed.

Summary

Issues:
1. Appeal against CIT(A)-12, Bengaluru's order for assessment year 2018-19 under section 154 of the Income Tax Act, 1961.
2. Non-credit of TDS as per Form 26AS.
3. Application of Portuguese Civil Code of 1867 in Goa.
4. Apportionment of income between spouses under section 5A of the Income Tax Act, 1961.
5. Discrepancy in TDS credit in 26AS and return processing.
6. Claiming TDS credit by the spouse.
7. Interpretation of Rule 37BA of the Income Tax Rules, 1962.

Analysis:
1. The appeal challenges the CIT(A)-12, Bengaluru's order, alleging it to be against the law, unjust, and erroneous. The appellant argues that TDS credit as per Form 26AS was not given, and the CIT(A) erred in applying the Portuguese Civil Code of 1867 and section 5A of the Income Tax Act, 1961. The appellant contends that TDS credit should not be apportioned between spouses and that the full credit should be allowed. The appellant also raises concerns about the discrepancy in TDS credit and the reduction in the refund amount.

2. The Tribunal notes that the appellant is governed by the Portuguese Civil Code, making him subject to section 5A of the Act. The legislative intent behind section 5A is to apportion income between spouses equally. The Tribunal upholds the Revenue's argument that TDS amounts must be apportioned between spouses as per the Act. The Tribunal rejects the appellant's claim for full TDS credit, emphasizing the legislative requirement for apportionment under section 5A.

3. The appellant's reliance on Rule 37BA of the Income Tax Rules, 1962 is dismissed, as the rule does not negate the requirement for apportioning TDS credit between spouses under section 5A. The Tribunal holds that the appellant cannot benefit from his failure to provide the necessary declaration for apportionment. Consequently, the appellant's appeal is dismissed, affirming the apportionment of TDS credit between spouses as mandated by section 5A of the Income Tax Act, 1961.

This detailed analysis of the judgment addresses the various issues raised in the appeal and provides a comprehensive overview of the Tribunal's decision regarding the apportionment of TDS credit between spouses under the specific provisions of the Income Tax Act.