| Question And Answer | |
|---|---|
| Subject: | TDS DEDUCTED IN ONE ASSESSEE BUT TO BE CLAIMED IN ANOTHER ASSESSEE |
| Category: | Income-Tax |
| Querist: | CA KARAN SHAH |
| Answered by: | Research Team |
| Tags: | Credit for tax deducted at source . mismatch form no 26AS, credit for TDS |
| Date: | October 15, 2021 |
DURING AY 2017-18, PROPREITORSHIP FIRM WAS CLOSED AND PVT LTD COMPANY WAS FORMED. ALL THE WORK/CONTRACT WERE EXECUTED AND UNDERTAKEN IN PVT LTD COMPANY, BUT THE CONTRACTOR DEDUCTED TDS IN INDIVDUAL/PROPRIETORSIP FIRM.
THE INDIVIDUAL IN HIS RETURN HAS NOT OFFERED ANY CONTRACT INCOME AND ALSO NOT CLAIMED THE TDS REFLECTED IN HIS FORM 26AS. AND THE PVT LTD COMPANY HAS OFFERED ALL THE INCOME AND ALSO CLAIMED TDS WHICH IS REFLECTED IN FORM 26AS OF INDIVIDUAL.
ASSESSMENT PROCEEDING U/S 143(3) OF PVT LTD COMPANY FOR SAID AY UNDERTAKEN, WHEREIN NO ADDITION WAS MADE AND RETURNED INCOME WAS ACCEPTED. BUT IN COMPUTATION SHEET TDS CREDIT WAS NOT GRANTED AND DEMAND WAS RAISED.
IN RETURN OF INCOME OF AY 2017-18, THERE IS NO OPTION TO CLAIM TDS PERTAINING TO OTHER PAN (OPTION OF SELF/OTHER PAN) LIKE THE OPTION AVAILABLE IN RETURN UTILITY OF AY 2020-21 AND 2021-22.
PLEASE ADVISE WHAT STEP IS REQUIRED TO BE TAKEN BY PVT LTD COMPANY, GIVEN THE FACT THAT THE CONTRACTORS ARE NOT IN POSITION TO RECTIFY THERE TDS RETURN?
The assessee may have to appeal an before the CIT (A ) for not granting the Credit for tax deducted at source . Reading together section 198 and 199 of the Act , the tax deducted at source credit should be given to the person in whose hand the income is offered for taxation . The assessee can get the undertaking from the Deductor stating that it was wrongly shown in the name of individual. One has to verify whose income it really belong to . If it is of the company the credit must be given to the company . Form No 26AS does not determine the taxability of the income . In PCIT v. Tata Communications Ltd. (2019) 267 Taxman 498 / 111 taxmann.com 258 (Bom.)(HC) Court held that failure of deductor to upload the correct details in form No 26A-benefit of tax deducted at source should be given to the assessee on the basis of evidence produced before the revenue authorities. In Rakesh Kumar Gupta v. UOI (2014) 365 ITR 143 / 225 Taxman 198 (Mag.) / (2015) 276 CTR 379/ 117 DTR 52 (All.)(HC) the Court held that the assessee cannot be denied credit for TDS on the ground of Form 26AS mismatch because he is not at fault. Non-grant of TDS credit causes harassment, inconvenience & makes the assessee feel cheated. Department to pay interest + costs of Rs. 25,000.
IN ADDITION IT IS NOTICE THAT – ASSESSMENT ORDER HAS BEEN PASSED WITH NIL ADDITION BY NFAC DELHI. AND NO DEMAND NOTICE OR COMPUTATION SHEET WAS FURNISHED. BUT LATER ON CPC BANGALORE HAS GENERATED OUTSTANDING DEMAND WITH RESPECT TO SAID YEAR ON PORTAL. SO IF APPEAL IS REQUIRED TO BE FILED, THEN AGAINST WHICH ORDER APPEAL SHOULD BE FILED.