Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate

50. Liladevi Dokania vs. ITO
ITA No. 126/Srt./2021 (Surat-Trib.)
A.Y.: 2019-20
Date of order: 27th June, 2022
Sections: 199, 203

Credit for tax deducted at source needs to be allowed even though the amount so deducted is not reflected in Form No. 26AS of the payee.

FACTS

The assessee, an individual, during the previous year relevant to the assessment year under consideration, earned rental income and offered the same for taxation under the head ‘Income from House Property’. The tenant, while paying rent, deducted TDS but did not deposit the same with the Government. The assessee claimed the amount of tax deducted by the tenant even though the same was not reflected in Form No. 26AS of the assessee. The AO , CPC did not allow credit of Rs. 5,71,770.

Aggrieved, the assessee preferred an appeal to CIT(A), NFAC, who confirmed the action of the AO.

Aggrieved, the assessee preferred an appeal to the Tribunal.

HELD

On perusal of the documents produced before it, the Tribunal held that it is clear that the assessee received the rent income, and the tenant deducted TDS but has not deposited the same with the Government. The Tribunal noted that the issue is no more res integra as the Gujarat High Court, in the case of Kartik Vijaysinh Sonavane [(2021) 132 taxmann.com 293 (Guj.)], has held that where the employer of the D.S. assessee has deducted TDS, it will always be open for the Department to recover from the said employer and credit of the same could not have been denied to the assessee.

Following the judgment of the High Court of Gujarat in the case of Kartik Vijaysinh Sonavane, the Tribunal directed the AO to verify the assessee’s claim and allow credit of TDS in accordance with the law.

The Tribunal allowed the appeal filed by the assessee.