TaxTMI 
TaxTMI 
2026 (7) TMI 1885
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....er be credited to the firm and not to the assessee's individual Permanent Account Number. Many clients complied; however, a few, owing to business exigencies and long-standing relationships, continued to deduct tax on the assessee's individual PAN. The assessee filed his return of income on 16 November 2017 declaring total income of Rs.8,99,750. The return was processed under section 143(1) of the Act with certain adjustments. The assessee's rectification application was rejected, and he therefore preferred an appeal before the learned CIT(A). The only dispute before the learned CIT(A) was the partial denial of TDS credit. The assessee claimed TDS credit of Rs.6,18,601, which included TDS relating to income of the partnership firm. As per Form 26AS, the TDS claimed by the assessee was Rs.6,18,601, whereas the corresponding receipts were Rs.4,11,94,750. 3. The learned Assessing Officer noted that the assessee's claim related to short credit of TDS. The assessee claimed TDS of Rs.6,15,160, whereas the CPC granted credit only to the extent of Rs.1,24,082, resulting in short credit of Rs.4,91,079. The short credit arose due to a mismatch between the TDS reported in Form 26AS and the....
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....e (a) of section 143(1) read with clause (c) of the said section of the Act authorizes the assessing officer (in this case, AO, CPC) to adjust for tax payable/refundable by/to the assessee on the basis of prima facie information available with him, the AO rightly denied the credit of TDS which was not reported in the Form 26AS of the appellant. 5.3 Having analysed the facts involved and details and documents available on record as well as filed by appellant during appellate proceedings, I find that the only dispute is whether credit of TDS claimed by appellant in his return of income should be allowed though the same was missing in Form 26AS. As already briefly stated above, the facts as narrated by appellant are that he was running a proprietorship business in the name of M/s. Cargolinks since 1998 and till 30th September 2015. With effect from 1 st October 2015, the said M/s. Cargolinks was converted from sole proprietorship to partnership firm and appellant became one of the partners of the firm. The business of M/s Cargolinks however remained same even after being converted to firm. The appellant also claimed that all the related business parties from whom business rec....
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....he 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 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 s....
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....imed as credit were reported. In fact, appellant's return of income does not contain any such details in Schedule TDS though it is required to be mandatorily filled in if income is not offered to tax but credit of TDS is claimed. Even after such defaults committed by both the appellant and the firm, if credit of TDS claimed by appellant is allowed to him, though corresponding income is not offered to tax by him on the ground that such income has been offered to tax by some other entity, it will give rise to several legal discrepancies: - 1.There will be mismatch of tax determined as payable or refundable among the two stakeholders. The person claiming credit of TDS may be granted refund with interest u/s 244A which will not be commensurate with the income disclosed by him. Similarly, the person offering the income to tax but not claiming credit of corresponding TDS will be taxed at higher amount with higher amounts of mandatory interests chargeable u/s 234A, 234B and 234C not commensurate with his income. 2. True picture will not be reported if future litigations arise between the two entities and courts of law may not arrive at proper decision on the basis of suc....
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....nership firm, the individual assessee could not claim the corresponding TDS credit. He further submitted that it was for the assessee to coordinate with his clients and request them to revise the TDS statements by correcting the PAN. 8. We have carefully considered the rival submissions and perused the orders of the lower authorities. 9. The appellant, a senior citizen, carried on business as proprietor of M/s. Cargolinks under PAN AMRPS9730Q until 30 September 2015. Thereafter, the business was converted into a partnership firm under PAN AAKFC4782H, in which the appellant became a partner. The nature of business remained unchanged, namely, operating as a Custom House Agent providing clearing and forwarding services and stevedoring services at various ports in India. During the transition from proprietorship to partnership, clients were informed to deduct tax at source in the name of the newly constituted partnership firm. However, certain clients inadvertently continued to deduct tax in the appellant's individual PAN, resulting in TDS of Rs. 6,02,745/-. Despite repeated requests to the deductors to correct the TDS entries, they did not cooperate, citing internal approval req....
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....nying such credit to the assessee. Income offered by one entity cannot give rise to a TDS credit claim by another entity. 11. The learned authorised representative strongly relied on the decision of the Hon'ble Delhi High Court in Commissioner of Income Tax v. Measures RELCOM, ITA No. 26/2015, dated 16 January 2015. In that case, the assessee, M/s. RELCOM, was engaged in the business of erection, commissioning, and installation of towers on a contractual basis. Its Form 26AS reflected total receipts of Rs.6,20,99,368, as against Rs.19,08,20,903, and TDS credit of Rs.1,20,73,097. The assessee explained that the vendor had billed Reliance Engineering Private Limited, its sister concern, for the work, but had mistakenly quoted the assessee's PAN in the TDS certificate, thereby crediting the TDS to the assessee's Form 26AS. The Assessing Officer denied the TDS credit, but the CIT(A) allowed it, and the coordinate bench confirmed that decision. The Revenue therefore carried the matter to the Hon'ble High Court. After considering section 199 of the Income-tax Act and relying on the decision of the Andhra Pradesh High Court reported in 357 ITR 196, the Hon'ble Delhi High Court decided ....