TaxTMI 
TaxTMI 
2023 (3) TMI 1639
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....ted and hence he was eligible for TDS credit on the said income. 4. The Assessing Officer has failed to understand that the assessee is being penalized for no fault of his. 5. The Assessing Officer has not considered the valid explanation submitted by the Assessee in this regard." 3. The brief facts of the case are as follows: - The assessee is a senior citizen aged 70 years. For AY 2011-12 return of income was filed on 11.07.2011 declaring total income of Rs.18,55,120/- from pension, house property and interest. In the said return of income the assessee had declared interest income of his deceased wife from SBI and Canara Bank and claimed TDS credit on the same. Intimation under Section 143(1) of the Act was issued on 13.02.2013, disallowing TDS credit in the name of assessee's wife. 4. Aggrieved, assessee filed appeal before the first appellate authority. The CIT(A) confirmed the view taken by the CPC in the intimation issued under Section 143(1) of the Act. The relevant findings of the CIT(A) read as follows:- "In the instant case, the interest income accrued to Late Smt. Shobana Prem and accordingly TDS was deducted and the credit was given t....
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....es of, giving credit to a person other than those referred to in sub-section (1) and sub section (2) and also the assessment year for which such credit may be given". 8. Rule 37BA of I.T. Rules 1962 is reproduced below for ready reference: - "[Credit for tax deducted at source for the purposes of section 199. 37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor 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 i....
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....und Nos.2 & 3 are allowed. 8. As far as ground Nos.4 & 4.1. of appeal are concerned, the same are charging of interest u/s. 234B & 234C of the Act, which are consequential in nature and, hence, no separate adjudication is required. Thus, these grounds of appeal raised by the assessee are allowed. In the-present ca&ey yuur-Appettarrt's wife passed away and due to the same your appeflafrt enjoyed the interest received from the deceased wife's deposit and dutifully declared the same to tax. And hence, yow-appeWa-nt is eligible to get the/credit of his deceased wife's TDS as he has declared the income ining to the said TDS." 10. The Hon' High Court of Andhra Pradesh in the case of Commissioner of Income Tax vs. Bhooratnam & Co. I.T.T. Appeal Nos. 117 & 222 OF 2012 November, 23, 2012, it was held as follows: - "17. In our view, the CIT (Appeals) and the Tribunal have rightly held that the assesses is entitled to the credit of the TDS mentioned in the TDS certificates issued by the contractor, whether the said certificate is issued in the name of the Joint Venture or in the name of a Director of the assessee company They have considered the terms....
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.... have entertained this PIL not to decide individual claims but in view of the general problems faced by the tax payers specially small tax payers/individuals regarding issue of refunds, which are denied on the basis of wrong or bogus demands or incorrect record maintenance and the problem faced by them in getting full credit of the tax. which is deducted from their income and paid to the Revenue. The problem is apparent, real and enormous. It has escalated because of Centralized Computerization and problems associated with the incorrect and wrong data which is uploaded by both the deductors or payees and the Assessing Officers The issue is of general governance, failure of administration, fairness and arbitrariness. The magnitude of the problem and the number of tax payers adversely affected thereby is apparent from the counter affidavit, wherein it is admitted that 43% and 39% of the returns in Delhi zone for the Financial Year 2010-11 and 2011-12 respectively were defective. Substantial number of these defaults relate to mismatch of TDS details and the tax payers have been denied benefit of TDS claimed by them. For the Financial Year 2010-11, the approximate demand created in Del....
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....rge of tax on such income under the provisions of sub-section (1) of section 4." Section 199 reads as under: "(1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given." Section 206C reads as under: "(1) Every person, being a seller shall, at the time of debit....
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....ng purposes. The person responsible for collecting tax under this section shall deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner one copy of the declaration referred to in sub-section (1A) on or before the seventh day of the month next following the month in which the declaration is furnished to him. (2) The power to recover tax by collection under sub-section (1) or sub section (1C) or subsection (1D)] shall be without prejudice to any other mode of recovery." Rule 37BA(2)(i) of Income tax Rules as amended, by the Income Tax (Eight amendment) Rules 2011 reads as under: "Where under any provisions of the Act, the whole or any part of 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 tax deducted at source, as the case may, shall be given to the other person and not to the deductee. Provided that the deductee files a declaration with the deductor and deductor reports the tax deduction in the name of the other person in the information relating to deduction ref....
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....ught to tax in the hands of the assessee firm or not. Where after due examination and verification, the AO find that the corresponding income has been brought to tax in the hands of the assessee firm, the AO is directed to allow credit for TCS in the hands of the assessee firm." 8. Learned DR, however, placed reliance on the decision of SMC Bench, Bengaluru, rendered in the case of Shri. Jayaprakasha Rai Vs. DCIT ITA No.681/Bang/2021, order dated 13.06.2022. I have perused the aforesaid decision and I find that the said decision was a case of transfer of licence from one person to another where pending the formality of transfer of licence, the credit was claimed by transferee of the licence in respect of TCS made in the hands of the predecessor in interest of transferor of the licence. In the aforesaid decision, the Tribunal made a reference to the provision of section 206C(4) and Rule 37-I of the Rules and came to the conclusion that credit should be given to TCS on the basis of the ultimate outcome before the Central Excise authorities regarding transfer of excise licence. The Tribunal also held in the aforesaid case that the AO can take necessary safeguards to ensure th....