By K. B. Bhujle, Advocate
Naresh Bhavani Shah (HUF) vs. CIT; 396 ITR
589 (Guj):
The assessee was a HUF regularly assessed to
tax under the provisions of Income-tax Act, 1961. The funds belonging to the
assessee were invested in RBI taxable bonds. This was, however, done in the
name of N, the karta of the family. Inadvertently, such investment was made in
his individual name and he was not described as the karta of the family. The
PAN given to the RBI also was that of N in his personal capacity and not that
of the family. Therefore, the RBI while deducting tax at source on the interest
income of such bonds issued certificates of tax deducted at source in the name
of N carrying his permanent account number. In the return of income for the A.
Y. 2012-13, the assessee included the interest from the said RBI bonds and also
claimed Rs. 5,42,800/- TDS on such interest. N, in his individual capacity, had
not included the said interest income and also had not claimed the TDS on the
same. The assessee wrote to the Assessing Officer and pointed out that the
amount of Rs. 5,42,800/- represented tax deducted at source on the income
offered by the assessee and that the benefit of such TDS should be granted to
the assessee, particularly when the karta had no claim on such benefit. The
Assessing Officer assessed the interest income, but refused to give credit of
the TDS. The assessee’s revision petition was rejected.
The Gujarat High Court allowed the writ
petition filed by the assessee and held as under:
“i) There
was no dearth of power with the Department to grant credit of tax deducted at
source in a genuine case. In the present case, many years had passed since the
event. The facts were not seriously in dispute. The assessee had offered the
entire income to tax. The Depatrment had also accepted such declaration and
taxed the assessee.
ii) In view of such special facts and circumstances,
the Department had to
give credit of
the sum of Rs. 5,42,800/- to the assessee, deducted
by way of tax at source, upon N filing an affidavit before the Department that
the sum invested by the RBI did not belong to him, the income was also not his
and that he had not claimed any credit of the tax deducted at source on such
income for the said assessment year.”
