TDS — Credit for tax deducted — S. 199 — Assessee bank received sale proceeds from auction of borrower’s property under SARFAESI Act — Tax was deducted at source u/s. 194-IA — Property ownership remained with borrower — Sale consideration was not bank’s income — Assessee bank was entitled to credit/refund of TDS from sale proceeds.

16. Pr.CIT v. Punjab National Bank:

(2026) 185 taxmann.com 1003 (Del.)

A. Y. 2020-21: Date of order 21/04/2026

S. 199 of ITA 1961/S. 390 of ITA 2025

TDS — Credit for tax deducted — S. 199 — Assessee bank received sale proceeds from auction of borrower’s property under SARFAESI Act — Tax was deducted at source u/s. 194-IA — Property ownership remained with borrower — Sale consideration was not bank’s income — Assessee bank was entitled to credit/refund of TDS from sale proceeds.

The Assessee is a Bank. The Assessee sold an immovable property by way of an auction under the SARFAESI Act on account of default by the borrower. The sale proceeds were credited to the Assessee after deduction of tax at source u/s. 194-IA of the Income-tax Act, 1961.

In the assessment proceedings, it was the contention of the Assessee that the Assessee was entitled to refund of the amount deducted from the sale proceeds. It was submitted that the Assessee was merely a custodian of the sale proceeds and did not receive the same in the capacity of the owner and that the Assessee was liable to return the excess consideration over the liability to the