TaxTMI 
TaxTMI 
2025 (12) TMI 972
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....n appeal before this Tribunal raising the following grounds : "1. In the facts and circumstances of the case and in law, the Learned CIT(A) ADDL/JCIT (A)-3, Bengaluru has erred in upholding rectification order passed under section 154 of the Income Tax Act, 1961 by Deputy Director of Income Tax, CPC, Bengaluru by allowing only proportionate TDS credit of Rs. 33,55,983/- based on Rule 37BA of Income Tax Rules, 1962; as against Rs. 45,28,441/- claimed by the appellant. 2. In the facts and circumstances of the case and in law, the Learned CIT(A) ADDL/JCIT (A)-3, Bengaluru has erred in not providing full TDS credit of Rs. 10,36,269/- to the appellant ignoring the provisions of Section 199 of the Income Tax Act, 1961 and nonapplicability of Rule 37BA(2) of Income Tax Rules, 1962. 3. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other." 3. Ld. Counsel for the assessee submitted that the assessee is Governed by Portuguese Civil Code 1860 and therefore as per section 5A of the Income Tax Act, 1961 being a resident of Goa assessee is governed by the syste....
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....apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly. (2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head "Salaries", such income shall be included in the total income of the spouse who has actually earned it." 7. We further observe that the assessee in the ITR has claimed the TDS at Rs. 45,28,441 along with advance tax of Rs. 1,01,100 and Tax collected at source of Rs. 30,340. The CPC has duly given the credit of advance tax as well as tax collected at source. However, for the TDS of Rs. 45,28,441 the claim has been allowed only at Rs. 33,55,983. The CPC for calculating the TDS credit allowed by it has made the computation citing Rule 37BA of the Income Tax Rules, 1962 in the following manner : Computation of Restriction of TDS based on Rule 37BA Sl.No. Particulars Amount 01 Total receipts offered to tax under various heads (Including receipts under Schedule E1 other than the Agricultural income part) in the return 45,28,441 02 Tot....
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....ortioned, the TDS corresponding to the apportioned income should be considered for calculating proportionate credit. Since, the income is to be apportioned equally, therefore, TDS of Rs. 10,36,269/- should also be apportioned equally between him and his wife amounting to Rs. 5,03,015/- each. Furthermore, the Appellant's wife MRs. Pooja Raikar, has not claimed any TDS out of the Appellant's TDS deduction. Therefore, the proportionate TDS credit should reflect this allocation. 5.1.3 The contentions of the Appellant have been duly perused. The Appellant being a resident of Goa is governed by the Portuguese Civil Code, 1860 and Section 5A of the Income Tax Act, 1961. The relevant provision of section 5(A) of the IT Act is reproduced hereinunder for ready reference: Apportionment of income between spouses governed by Portuguese Civil Code. 5A. (1) Where the husband and wife are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu, the income of the husband and of the wife under any head....
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....wance is required to be made in her hands. However, in case the Appellant has offered the entire income to tax in his return of income for the relevant year then the AO is directed to allow full TDS credit corresponding to the income offered by the Appellant. The AO shall give an opportunity of being heard to the Appellant and call for requisite details. The appeal filed on Ground No 1 is Partly allowed for statistical purposes. 5.2 Ground No. 2: Levy of Interest u/s 234B & 234C: The Appellant has contested the levy of interest under section 234B/C which has arisen on the income tax liability raised after the disallowance of TDS made in the intimation order. Since, the TDS disallowance has been adjudicated in para 5.1 of this order, therefore, the AO is directed to recompute the interest payable under the provisions of section 234B & 234C in the Order Giving Effect accordingly. The Appeal filed on this ground is partly allowed for statistical purposes. TAX DEPAN 6. In the result, the appeal is Partly allowed for statistical purposes." 9. Now from going through the above finding of ld.CIT(A) and the available record and the contentions made by ld. Couns....
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....ax 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 deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. (ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. [(3A) Notwithstanding anything contained in sub-rule (1), sub-rule (2) or sub-rule (3), for the purposes of section 194N, credit for tax deducted at source shall be given to the person from whose account tax is deducted and paid to the Central Government account for the assessment year relevant to the previous year in which such tax deduction is made.] (4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of- (i) the information relating to deduction of tax furnished by....