AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 80
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....Appeals) erred in ignoring Rule 37BA(3), which was relied on by the appellant. 5. Having regard to the facts and circumstances of the case, the Appellant submits that the Assessing Officer and Commissioner of Income Tax (Appeals) be directed to grant TDS credit to the tune of Rs. 1,15,010/- 3. The brief facts and the background of the case are that the assessee filed the return of income on 18/12/2021 declaring total income of Rs. 1,06,74,950/- including income received from the Deed of Settlement for K D Bahadurji, (Trustee R D Bahadurji) of Rs.16,43,425/-, TDS was claimed of Rs.7,53,318/- (including Rs.1,15,109/- in respect of the above mentioned Deed of Settlement, corresponding to the above mentioned income of Rs.16,43,425/-). The return was processed u/s 143(1) by Centralized Processing Centre, Bengaluru on 11 January, 2022, and a demand was raised of Rs.1,15,010/- on account of the grant of short credit. 4. It has been brought on record that Mr. Russi Dinshaw Bahadurji passed away on 21 July, 2018. An application was made to the Hon'ble Bombay High Court for grant of Probate in respect of the last Will and Testament of the deceased on 28/06/2019. The said application is....
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.... with and disposed of as provided by my Testamentary writing, if any, otherwise as if I had died intestate. Therefore, at the time of my death if I am the sole trustee of this Deed of Settlement dated 25th January, 1995 the whole of the corpus and the accrued unutilised income of this trust fund will revert to my estate. " 4) Therefore, the entire income received by the 'Deed of Settlement for K D Bahadurji Trustee R D Bahadurji' (PAN AABTD3941Q) of Rs. 16,43,4257- is now part of the income of Late Russi D. Bahadurji (PAN: AACPB4740N the appellant herein) during the year under consideration, and it was duly offered to tax in the hands of the appellant. Details of the same are as under : Name of the Investee Type of Income Gross amount TDS Deed of settlement for K.D. Bahadurji, Trustee R D Bahadurji HDFC Mutual Fund Dividend Income 4,25,539 33,688 HDFC Mutual Fund Dividend Income 4,25,533 31,915 Franklin Templeton Mutual Fund Dividend Income 6,60,086 49,506 HSBC Bank Savings Interest 1,32,266 Nil Total (A) 16,43,425 1,15,109 Other Income of the assessee (B) 1,00,31,522 6,38,208 Gross Total In....
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....N:AACPB4740N. It was in light of this fact, no tax credit was claimed in the hands of the trust and accordingly, credit is being claimed in the hands of Late Russi Dinshaw Bahadurji. He also noted the fact that return of income of trust has offered no income and does not contain any tax credit in the ITR and it has been claimed in the PAN of Late Russi Dinshaw Bahadurji as per Rule 37BA(2). He also reproduced the tax credit part of the return in the impugned assessment order. 11. Ld. CIT (A) after taking note of Rule 37BA gave the following finding:- "The appellant has stated that the claim for TDS has been made as per rule 37BA. As per Rule 37BA(2)(i) a declaration has to be filed with the deductor by the deductee, if the income is assessable in the hands of any other person. The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person. The deductor has to thereon report the tax deduction in the hands of this other person as per provisions of Chapter XVII of the Income Tax Act, ....
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....e parties at length and also perused the relevant finding given in the impugned order as well as the material referred to before us. The only issue involved here is that, CPC has wrongly denied credit of the TDS amounting to Rs.1,15,109/-. Before us, the ld. Counsel for the assessee after referring to the provisions contained in Section 199(1) of the Act submitted that, assessee is the original owner of the relevant income and has offered the same to tax and has been assessed on the same income. He admitted that there was a Deed of Settlement (private trust) created and income has been received in the bank account of Deed of Settlement and the deductor has reflected the PAN and Form 26AS of the Trust. However, the fact of the matter is that tax has been paid by way of TDS and Rs.1,15,109/- is in respect of income of Deed of settlement of Shri KD Bahadurji, therefore, there is no dispute and the tax has been paid. It is also undisputed fact that income belonging to Deed of Settlement / Trust was duly offered to tax in the return of income of Late Russi Dinshaw Bahadurji on PAN AACPB4740N under the head 'income from other sources'. The said income offered to tax by the assessee had d....
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....uctor to the income-tax authority or the person authorised by such authority. (2) (i) Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee. Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).] (ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person (iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. 3) (i) Credit for tax deduc....
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....and the original deductee files a declaration with the deductor and also in the return of income, can credit of TDS be denied to the other person showing the income. Under such circumstances a liberal interpretation has to be given. The form prescribed under the rules cannot have an effect of interpretation of operations of the parent statute. 18. Here, there was practical difficulty also to comply with Rule 37BA(2), because Late Mr. Russi D. Bahadurji, passed away on 21/07/2018 and the executors of the estate applied for probate on 20/06/2019 which is still awaited from the Hon'ble Bombay High Court. In the Deed of settlement Late Mr. Russi D. Bahadurji was the sole trustee and all the investments of the Deed of Settlement stood in a single name on that account. The executors of the estate have no right in the assets of the estate, till such time the will is probated. No company or mutual fund will entertain an executor till such time that the will is probated and therefore, for this reason the name of the deceased will continue on the Registry of the company or the mutual fund. Thus, in these peculiar facts and circumstances, it was an impossibility to comply with the condition ....
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....der the Act and same cannot be extended the scope of such prescription and lay down any conditions or qualifications which are outside the realm of its powers. This proposition has been held by the following judgments:- * CIT vs. Nagpur Hotel Owners Association (1994) (209 ITR 441) (Bom) "The Supreme Court decisions referred to above are clear. They specifically speak of the rules and not the form. In principle also no distinction between the form and the rule can be drawn to judge the extent of delegation under section ii(2)(a) where the language does not permit delegation of power to prescribe limitation to give notice. The conclusion is thus inevitable that the Income-tax Rules could not fix a time-limit for submitting the application in Form No. 10 under rule 17 and, therefore, the Tribunal was correct in its conclusion." * Sales Tax Officer vs. KI Abraham (1967 AIR SC 1823) "The decision of the question at issue therefore depends on the construction of the phrase "in the prescribed manner" in s. 8(4) read with s. 13 of the Act. In our opinion, the phrase "in the prescribed manner" occurring in s. 8(4) of the Act only confers power on the rule-making authority to pres....