TaxTMI 
TaxTMI 
2026 (9) TMI 838
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 27.03.2026. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: "1. That the order passed by the Learned ADDL/JCIT (A)-2 LUCKNOW is bad in law, arbitrary, unjust, and passed without properly appreciating the facts and circumstances of the case. 2. That on the facts and in the circumstances of the case, the Learned ADDL/JCIT (A)-2 LUCKNOW erred in law and on facts in upholding the denial of TDS credit amounting to Rs. 79,330/- deducted by State Bank of India and appearing in the appellant's Form 26AS, despite the fact that the tax had been deducted in the name and PAN of the appellant. 3. That the Learned ADDL/JCIT (A)-2 LUCKNOW failed to appreciate that Rule 37BA(1) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad in fact been deducted and deposited to the credit of the Central Government results in manifest double prejudice and unjust enrichment of the Revenue and is contrary to the scheme of section 199 of the Act; and further, the Learned ADDL/JCIT (A)-2 LUCKNOW failed to appreciate the settled principle that substance must prevail over form, particularly when the corresponding income has already been subjected to tax in the same assessment year and the denial of credit is based merely on procedural and technical considerations. 8. That the denial of TDS credit appearing in Form 26AS while simultaneously accepting that tax had in fact been deducted and deposited to the credit of the Central Government results in manifest double prejudi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act on 08.09.2023 disallowing the claim for TDS credit of Rs. 79,330/- relating to interest on fixed deposit held with State Bank of India. The Ld. AO also noted that the corresponding interest income was not offered to tax in the assessee's return but was clubbed in the hands of his wife u/s. 64 of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. Addl/JCIT(A), who observed that the assessee had failed to furnish the declaration and the deductor certificate mandated under Rule 37BA(2) of the Income Tax Rules, 1962, nor did he provide any proof regarding the corresponding income being declared in the spouse's return. It was concluded that the provisions of section 199 of the Act and Rule 37BA ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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." 6. Thus, a perusal of sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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). In the case before us, no such declaration as required under the proviso to clause (i) to sub rule (2) of rule 37BA of IT Rules appears to have been filed else the TDS would not have been reflected in Form No. 26AS relating to the assessee but instead would have been reflected in the Form No. 26AS relating to the spouse of the assessee, Smt. Sumita Dey (PAN-AJLPD4243J). Thus, since no such declaration was filed, the issue was to be governed by sub-rule (1) of rule 37BA of the IT Rules. As regards section 199 of the Act, the same relates to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 9. Thus, for the purposes of credit of TDS, the claim of the assessee was justified as the amount was figuring in Form No. 26AS of the assessee and since the credit was not given, it was a mistake apparent from record which was liable to be rectified. Sub-section (2) refers to the tax paid on behalf of the person in respect of whose income such payment of tax has been made. On the basis of the FD being in the name of the assessee, the TDS was treated as made on the income credited to the assessee being interest on FD. By virtue of section 64 of the Act, the income, however, was liable to be included in the hands of the spouse and the credit for TDS relating to such income could be given to the spouse only if the condition as stipulated ....