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CA Pratibha Goyal | Apr 27, 2022 | Views 116696

Assessee entitled to get credit on TDS which was deducted in the PAN of his late father: ITAT

Assessee entitled to get credit on TDS which was deducted in the PAN of his late father: ITAT

The brief facts of the case is that the assessee is an individual and also non-resident. The assessee submitted before the CIT(A) that he had inherited movable and immovable properties of his late father Dr.Navinbhai Parekh, who expired on 17.2.2017. The assessee is the only legal heir of his late father since his mother also pre-deceased. Hence, the entire estate of his late father and income thereon is filed by the assessee for the AY 2018-19 in his individual capacity. The major income derived from “income from other sources”; namely, bank deposits from Bank of Baroda and NSC. The assessee’s father had deposits with Bank of Baroda on which interest income of Rs.13,04,682/- was accrued during the AY 2018-19 with TDS of Rs.1,34,220/-. However, the TDS certificate carrying the PAN of assessee’s late father Dr.Navinbhai Parikh. However, the assessee offered other incomes and interest income of Rs.13,04,682/- for taxation in his return of income for the AY 2018-19 and paid balance tax thereon.

The return of income was processed by the Centralized Processing Center (CPC), Bengaluru by order dated 12/04/2019 and intimation u/s.143(1) of the Act was passed, whereby denying TDS amount from Bank of Baroda of Rs.1,34,220/- and also demanded tax of Rs.1,57,610/-.

Aggrieved against this intimation, the assessee filed an appeal before the Ld. CIT(A)-13, Ahmedabad and the Ld. CIT(A) dismissed the assessee’s appeal.

Aggrieved by the order of the Ld. CIT(A), assessee is now in appeal before the Income Tax Appellate Tribunal (ITAT).

Argument of Taxpayer

The Ld.counsel for the assessee Shri Dhinal Shah appearing for the assessee submitted that when the income of the late father of the assessee, a sum of Rs.13,42,190/- which has been accepted by Revenue, the corresponding TDS is denied to the assessee on the ground that mismatching of PAN of the assessee’s deceased father. The assessee on admitting the amount of Rs.13 lakhs also paid self- assessment tax of Rs.2,70,000/- for the balance income of his late father. Therefore, the CPC Bengaluru is not correct in denying the TDS credit of his late father. Inadvertently, the assessee being a non- resident failed to instruct the Bank of Baroda about the change in PAN for his late father. Thus, the assessee cannot be denied the benefit of TDS made by the Bank of Baroda and pleaded to allow the TDS credit and allow the appeal in favour of the assessee.

Argument of Department

Per contra, the Ld.DR appearing for the Revenue supported the orders of the lower authorities and requested to confirm the same.

ITAT Order

7.4. On going through this judgement, it is crystal clear that there are provisions of under the Income Tax Act; namely, section 199 of the IT Act, 1961 and Rule 37BA of the IT Rules, 1962 and proper mechanism is also provided under the Act and Rules. Thus, applying the ratio of the above judgment also, the assessee is entitled to get credit on TDS of Rs. 1,34,220/- which was deducted in the PAN of his late father. However, the entire income is offered by the assessee in his individual capacity as sole legal heir. Apart from that, the assessee also paid self-assessment tax of Rs.2,70,000/- on the above income. Thus, the grounds of appeal raised by the assessee; namely, Ground Nos. 2 & 3 are allowed.

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