The Income Tax Appellate Tribunal (ITAT), Amritsar, has recently, in an appeal filed before it, while allowing TDS credit, held that the assessee cannot suffer due to the delay on part of the deductor in updating the PAN of legal heir.
The aforesaid observation was made by the Amritsar ITAT, when an appeal was filed before it by the assessee, as against the order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 14.12.2021, in respect of the Assessment Year 2016-17.
The ground of the assessee’s appeal was that the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, has erred on the fact that the assessee has not communicated about death of his mother and change of PAN to the deductor , while actually the assessee had communicated the same to the deductor but the same was updated by the deductor in the next financial year, it was the submission of the assessee that as such the assessee should not be made to suffer because of delay and procedural error on the part of the deductor.
With Mrs. Geetika Arora, C.A., the counsel for the assessee, having submitted that the appellant being the legal heir had offered the income of his deceased mother at Rs.3,53,057/- in his Income Tax Return and that consequentially he has paid additional tax of Rs.74, 295 (97492-23197) to the department, it was the argument of the assessee that admittedly the income on which TDS has been deducted had been offered for tax in the return of income filed by the assessee as assessed u/s 143(1) of the Income Tax Act, 1961 and therefore corresponding TDS deducted belongs to the assessee and credit of TDS.
While the Counsel for the assessee contended that where the income of the deceased mother is offered for taxation, then the appellant is entitlement of credit of such TDS, Ms. Priyanka Singla, the Sr. D.R. on the other hand, stood by the impugned order, however, in agreement with the argument of the appellant in principle.
Hearing the opposing contentions of either sides, and thereby perusing the materials available on record, the Amritsar ITAT noted:
“The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has confirmed the finding of the AO on account of non- allowance of TDS Credit of Rs. 36,008/- deducted in the name of deceased mother of the assessee while assessing the income of Rs. 3,53,057/- belonging to Smt. Mohinder Kaur (deceased mother of the assessee) in hands of appellants for A.Y. 2016-2017. It is admitted facts on record that the appellant’s deceased mother’s income on which TDS was deducted had been offered for tax in its return of income and assessed u/s 143(1) of the Income Tax Act, 1961 and thus, the credit of TDS cannot be denied merely because it appears in the name of deceased mother.”
“As per law and in principle, the tax on particular income can be charged once only. In the instant case, the tax has already been deducted by way of TDS by the revenue and thus, the confirmation of the order of the lower authorities would be denial of TDS claim to the appellant would result into double taxation of the same income. In our view, a particular income cannot be taxed twice under the law and therefore, as in the present case, the appellant is entitlement for the credit of TDS deducted on the disputed income.”, the ITAT added.
“Alternatively, the assesse shall be eligible to seek permission from the CCIT to file belated return in the name of disease person (Appellants mother) for the claim of TDS under Rule 34BA of Income Tax Rules and thereby withdrawing the diseased mother income shown in its return. In the case of Smt. Vijay Luxmi Gupta Vs. Income Tax Officer, it was held that credit of TDS cannot be denied merely because the TDS amount was wrongly deposited by the deductor in PAN of the deceased husband and in refusing to follow Rule 37 BA of Income Tax Rules.”, the Bench consisting of Anikesh Banerjee, the Judicial Member, along with Dr. M. L. Meena,the Accountant Member noted.
Thus, allowing the assessee’s appeal the Amritsar ITAT held:
“In the above view, we accept the grievance of the assesse as genuine. As such, we conclude that the assessee would not be made to suffer because of delay on the part of the deductor in updating PAN of the legal heir. Accordingly, the AO is directed to allow credit of the TDS claimed by the appellant on verification of form 26 issued for the relevant quarters of the financial year in the name of diseased person as per Rule 37 BA of Income Tax Rules.”
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