TDS credit mismatch: appeal restored to assessing officer for de novo adjudication and verification of HUF Karta and member claims

Dispute concerns denial of TDS credit due to mismatch in Form 26AS; tribunal found documentary evidence that neither the HUF Karta nor a member had claimed the TDS credit in their respective returns, and that this was not considered by lower authorities. Tribunal ordered restoration of the matter to the assessing officer for de novo adjudication and directed examination of whether the Karta and the member had refrained from claiming the TDS credit, effectively requiring fresh verification of claim entitlement and reconciliation of TDS records.

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Issues: Whether the assessee HUF is entitled to TDS credit of Rs.9,32,000/- where tax was deducted in the names of the Karta and a member of the HUF and those persons did not claim the TDS credit in their returns.

Analysis: The Tribunal examined the record including the return schedules and material showing that tax was deducted at source twice (1% on Rs.4,66,00,000 each) in the names of the Karta and a member, and that those persons had not claimed corresponding TDS credit in their respective returns as indicated in the schedules before the Tribunal. The Tribunal considered the assessment and subsequent rectification under section 154 where credit was withdrawn on account of an alleged Form 26AS mismatch. Finding that the lower authorities did not appreciate the evidence regarding non-claim by the Karta and the member, the Tribunal directed restoration to the Assessing Officer for fresh examination of whether the Karta and the member had indeed not claimed the TDS credit; and if so, to grant the TDS credit to the HUF since the corresponding income is considered in the hands of the HUF and the TDS was not otherwise claimed by those individuals.

Conclusion: The appeal is allowed for statistical purposes and the matter is restored to the Assessing Officer for de novo adjudication with direction to examine and, if satisfied that the Karta and the member did not claim the TDS, grant TDS credit of Rs.9,32,000/- to the assessee HUF.

Ratio Decidendi: Where tax is deducted in the names of individuals but the corresponding income is assessed in the HUF and the individuals have not claimed the TDS credit, the Assessing Officer must examine the claim and grant TDS credit to the HUF if the non-claim by the individuals is established.

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