JAMSHED R BILIMORIA,MUMBAI V. ITO-19(1)(5), MUMBAI

ITA 6066/MUM/2024

AI Insights

The case involves Jamshed R Bilimoria, the sole beneficiary of a trust, who appealed against the decision of the Commissioner of Income Tax (Appeals) and the Centralized Processing Centre (CPC) regarding the non-granting of TDS credit. The TDS was deducted in the name of the trust, and although the income was declared and taxed in the hands of the assessee, the corresponding TDS credit was not allowed. The Tribunal found that the CPC and the CIT(A) erred in not granting the TDS credit as per the provisions of the Income Tax Act, despite the income being assessed in the hands of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471355 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2023-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KANUPRIYA DAMOR
• Assessee Lawyers: M M GOLVALA
• Keywords: TDS; FORM 26AS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 6066/MUM/2024 Assessment Year: 2023-24 Jamshed R Bilimoria, C/o Kalyaniwalla & Mistry LLP 2nd floor, Esplanade House 29 Hazarimal Somani Marg, Fort, Mumbai-400001. Vs. ITO Range 19(1)(5), Room No. 602, 6th floor Piramal Chambers Lalbaug, Mumbai-400012. PAN NO. AAPPB 8124 R Appellant Respondent Assessee by : Mr. M M Golvala Ms. Aruna Aaiyar Revenue by : Ms. Kanupriya Damor, Sr. DR Date of Hearing : 01/01/2025 Date of pronouncement : 21/02/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 30.09.2024 passed by the Ld. Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 2023-24, raising following grounds: 1. The Appellant objects to the demand 11,41,190/-. 2. The Commissioner of Income Tax (Appeals) erred in upholding that the Centralized Processing Centre (CPC) has rightly not granted TDS credit to the extent of Rs. 12,38,459/ claimed in the return of income only on the basis same did not appear in the 26AS of the Appellant. 3. Both the learned Commissioner of Income Tax (Appeals) and CPC erred in not considering the fact that the income from the assets held in the Trust created for the Appellant's sole benefit, is re Appellant's own hands. 4. The learned Commissioner of Income Tax (Appeals) and CPC erred in upholding that CPC has rightly not granted TDS credit of Rs. 12,38,459/ 74,66,005/- beneficiary, ignoring the provisions of section 199 of the Act read with rule 37BA. 5. The learned Commissioner of Income tax (Appeals) erred in upholding that CPC has rightly not granted TDS credit of 12,38,459/- not claimed the TDS credit in the return of income filed by the trust. 6. Having regard to the facts and circumstances of the case, the Appellant submits that the CPC be directed to grant T credit to the tune of Rs. 2. Briefly stated, facts of the case are that the assessee filed its return of income for the year under consideration declaring total income at Rs.99,82,560/ assessee was processed by the Central Processing Centre (CPC) u/s 143(1) of the Income dated 11.10.2023, wherein the CPC accepted the total income returned but credit for the claim of tax deducted at source ITA No. 1. The Appellant objects to the demand determined of Rs. . 2. The Commissioner of Income Tax (Appeals) erred in upholding that the Centralized Processing Centre (CPC) has rightly not granted TDS credit to the extent of Rs. 12,38,459/ claimed in the return of income only on the basis same did not appear in the 26AS of the Appellant. 3. Both the learned Commissioner of Income Tax (Appeals) and CPC erred in not considering the fact that the income from the assets held in the Trust created for the Appellant's sole benefit, is required to be taxed u/s 161(1) of the Act in the Appellant's own hands. 4. The learned Commissioner of Income Tax (Appeals) and CPC erred in upholding that CPC has rightly not granted TDS credit of Rs. 12,38,459/-, inspite of assessing income of Rs. from the trust in which the Appellant is the sole beneficiary, ignoring the provisions of section 199 of the Act read with rule 37BA. 5. The learned Commissioner of Income tax (Appeals) erred in upholding that CPC has rightly not granted TDS credit of despite acknowledging the fact that the trust had not claimed the TDS credit in the return of income filed by the 6. Having regard to the facts and circumstances of the case, the Appellant submits that the CPC be directed to grant T credit to the tune of Rs. 12,38,459/-. Briefly stated, facts of the case are that the assessee filed its return of income for the year under consideration declaring total income at Rs.99,82,560/-. The return of income filed by the sed by the Central Processing Centre (CPC) u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) vide order wherein the CPC accepted the total income returned but credit for the claim of tax deducted at source Jamshed R Bilimoria 2 ITA No. 6066/MUM/2024 determined of Rs. 2. The Commissioner of Income Tax (Appeals) erred in upholding that the Centralized Processing Centre (CPC) has rightly not granted TDS credit to the extent of Rs. 12,38,459/- claimed in the return of income only on the basis that the same did not appear in the 26AS of the Appellant. 3. Both the learned Commissioner of Income Tax (Appeals) and CPC erred in not considering the fact that the income from the assets held in the Trust created for the Appellant's sole quired to be taxed u/s 161(1) of the Act in the 4. The learned Commissioner of Income Tax (Appeals) and CPC erred in upholding that CPC has rightly not granted TDS , inspite of assessing income of Rs. from the trust in which the Appellant is the sole beneficiary, ignoring the provisions of section 199 of the Act 5. The learned Commissioner of Income tax (Appeals) erred in upholding that CPC has rightly not granted TDS credit of Rs. despite acknowledging the fact that the trust had not claimed the TDS credit in the return of income filed by the 6. Having regard to the facts and circumstances of the case, the Appellant submits that the CPC be directed to grant TDS Briefly stated, facts of the case are that the assessee filed its return of income for the year under consideration declaring total . The return of income filed by the sed by the Central Processing Centre (CPC) u/s tax Act, 1961 (in short ‘the Act’) vide order wherein the CPC accepted the total income returned but credit for the claim of tax deducted at source amounting to Rs.12,38, the Ld. CIT(A) directed the Assessing Officer to verify the claim of the assessee and allow as per the provisions of the Act. Aggrieved, the assessee is in appeal before the Tribunal. 3. We have heard rival submiss the relevant materials on record Bilimoria trust’ was created by the parents of the assessee vide deed of trust dated 15.12.2004 in which the brother of the assessee is a trustee along with other two professionals. The assessee is the sole beneficiary of the said trust. According to the assessee in terms of section 161(1) of the Act income from the assets held in the said trust was required to be taxed in the hands of the assessee. The assessee accordingly offered following income Interest Income Dividend Income Short Term capital Gain Long Term Capital Gain Long Term Capital 3.1 Although the deductor deducted the TDS in the name of the trust as said investments were made by the trust, but the assessee claimed relevant TDS credit appearing in the Form No. 26AS Income-tax Department under Income Rules’) for acknowledging trust. The trust filed return of income declaring nil income ITA No. amounting to Rs.12,38,459/- was not granted. On further appeal, the Ld. CIT(A) directed the Assessing Officer to verify the claim of the assessee and allow as per the provisions of the Act. Aggrieved, the assessee is in appeal before the Tribunal. We have heard rival submissions of the parties and perused the relevant materials on record. A private trust namely was created by the parents of the assessee vide deed of trust dated 15.12.2004 in which the brother of the assessee is a ther two professionals. The assessee is the sole beneficiary of the said trust. According to the assessee in terms of section 161(1) of the Act income from the assets held in the said trust was required to be taxed in the hands of the assessee. The e accordingly offered following income in his hand Gross TDS Interest Income 22,70,305 249,120 Dividend Income 51,95,700 9,89,339 74,66,005 12,38,459 Short Term capital Gain 1,65,374 NIL Long Term Capital Gain 10,11,364 NIL Long Term Capital Gain 16,48,619 NIL 3.1 Although the deductor deducted the TDS in the name of the trust as said investments were made by the trust, but the assessee claimed relevant TDS credit in his return. The said TDS were appearing in the Form No. 26AS [i.e. a form prescribed by the tax Department under Income-tax Rules 1962 (in short ‘the Rules’) for acknowledging the TDS credit of each person], of the The trust filed return of income declaring nil income Jamshed R Bilimoria 3 ITA No. 6066/MUM/2024 was not granted. On further appeal, the Ld. CIT(A) directed the Assessing Officer to verify the claim of the assessee and allow as per the provisions of the Act. Aggrieved, ions of the parties and perused trust namely ‘Jamshed was created by the parents of the assessee vide deed of trust dated 15.12.2004 in which the brother of the assessee is a ther two professionals. The assessee is the sole beneficiary of the said trust. According to the assessee in terms of section 161(1) of the Act income from the assets held in the said trust was required to be taxed in the hands of the assessee. The in his hand: 249,120 9,89,339 12,38,459 3.1 Although the deductor deducted the TDS in the name of the trust as said investments were made by the trust, but the assessee The said TDS were prescribed by the tax Rules 1962 (in short ‘the the TDS credit of each person], of the The trust filed return of income declaring nil income. The assessee claimed that income of the trust, it was not claimed. Thus the assessee for the tax in the year under consideration in the hands of the assessee, the corresponding TDS cred the assessee in the same year. The Ld. CIT(A) after considering the submission of the assessee and provisions of the law directed the Assessing Officer to verify the claim of the assessee and allow the TDS as per provisions o “In the present appeal under consideration, it is observed that income and TDS is related with the Trust and ITR has also filed by the Trust showing Nil income and no TDS was claimed by the Trust in the ITR filed for the Asstt 2023-24. The Appellant in the capacity of Individual filed ITR for the Asstt. Year 2023 Trust and claimed TDS, which was also shown in the Form 26AS of the Trust. In view of the above discussion, the restriction of TDS b the CPC Bengaluru is held to be correct, because no TDS is reflected in Form 26AS of the Appellant, hence no credit was allowed by the CPC. Further, the appellant has submitted that as per Trust deed dated 15 appellant himself is the sole be Hence, the AO is directed to verify the claim of the Appellant and allow the TDS as per provisions of the Income Tax 3.1 The issue before us pertains to the denial of credit for Tax Deducted at Source (TDS) to the a beneficiary of a trust, on the ground that the tax was deducted in the name of the trust and, consequently, was reflected in Form No. ITA No. claimed that in the prescribed form for filing return of trust, it was demonstrated that the TDS credit was Thus the assessee urged that since income was offered for the tax in the year under consideration in the hands of the the corresponding TDS credit should have been allowed to the assessee in the same year. The Ld. CIT(A) after considering the submission of the assessee and provisions of the law directed the Assessing Officer to verify the claim of the assessee and allow the TDS as per provisions of the Act observing as under: “In the present appeal under consideration, it is observed that income and TDS is related with the Trust and ITR has also filed by the Trust showing Nil income and no TDS was claimed by the Trust in the ITR filed for the Asstt 24. The Appellant in the capacity of Individual filed ITR for the Asstt. Year 2023-24 showing income related to Trust and claimed TDS, which was also shown in the Form 26AS of the Trust. In view of the above discussion, the restriction of TDS b the CPC Bengaluru is held to be correct, because no TDS is reflected in Form 26AS of the Appellant, hence no credit was allowed by the CPC. Further, the appellant has submitted that as per Trust deed dated 15-12- appellant himself is the sole beneficiary in the said Trust. Hence, the AO is directed to verify the claim of the Appellant and allow the TDS as per provisions of the Act, 1961.” The issue before us pertains to the denial of credit for Tax Deducted at Source (TDS) to the assessee, who is the sole beneficiary of a trust, on the ground that the tax was deducted in the name of the trust and, consequently, was reflected in Form No. Jamshed R Bilimoria 4 ITA No. 6066/MUM/2024 rm for filing return of the TDS credit was that since income was offered for the tax in the year under consideration in the hands of the it should have been allowed to the assessee in the same year. The Ld. CIT(A) after considering the submission of the assessee and provisions of the law directed the Assessing Officer to verify the claim of the assessee and allow the f the Act observing as under: “In the present appeal under consideration, it is observed that income and TDS is related with the Trust and ITR has also filed by the Trust showing Nil income and no TDS was claimed by the Trust in the ITR filed for the Asstt. Year 24. The Appellant in the capacity of Individual filed 24 showing income related to Trust and claimed TDS, which was also shown in the Form In view of the above discussion, the restriction of TDS by the CPC Bengaluru is held to be correct, because no TDS is reflected in Form 26AS of the Appellant, hence no credit was allowed by the CPC. Further, the appellant has -2004, the neficiary in the said Trust. Hence, the AO is directed to verify the claim of the Appellant and allow the TDS as per provisions of the The issue before us pertains to the denial of credit for Tax ssessee, who is the sole beneficiary of a trust, on the ground that the tax was deducted in the name of the trust and, consequently, was reflected in Form No. 26AS of the trust rather than in the Form No. 26AS of the assessee It is the settled position t only if the said amount appears in the Form No. 26AS of the relevant assessee. Since the TDS credit in the present case was not appearing in the Form No. 26AS of the assessee, the Assessing Officer, relying strictly such credit. Ideally, the assessee ought to have ensured that the deductor deducted tax in the hands of the assessee rather than in the name of the trust. However, the crux of the matter is that the Department has neither granted credit for the TDS in the hands of the trust nor in the hands of the assessee. As a result, the tax deducted at source continues to remain with the Government, while, at the same time, a demand has been raised against the assessee. This amounts to an inequitable situation, which cannot be countenanced in law. directed the Assessing Officer to verify the assessee’s claim and grant TDS credit in accordance with the provisions of the Income tax Act, 1961. If such credit has not been granted till the date of passing of this order, we hereby direct the necessary steps to address the request of both the assessee and the trust for the transfer of TDS credit from the Form No. 26AS of the trust to the Form No. 26AS of the assessee and, thereafter, to allow the credit in accordance w assessee are accordingly allowed for statistical purposes. ITA No. 26AS of the trust rather than in the Form No. 26AS of the assessee It is the settled position that the Department grants credit for TDS only if the said amount appears in the Form No. 26AS of the relevant assessee. Since the TDS credit in the present case was not appearing in the Form No. 26AS of the assessee, the Assessing Officer, relying strictly on procedural compliance, declined to grant such credit. Ideally, the assessee ought to have ensured that the deductor deducted tax in the hands of the assessee rather than in the name of the trust. However, the crux of the matter is that the as neither granted credit for the TDS in the hands of the trust nor in the hands of the assessee. As a result, the tax deducted at source continues to remain with the Government, while, at the same time, a demand has been raised against the amounts to an inequitable situation, which cannot be countenanced in law. We note that the Ld. CIT(A) directed the Assessing Officer to verify the assessee’s claim and grant TDS credit in accordance with the provisions of the Income tax Act, 1961. If such credit has not been granted till the date of passing of this order, we hereby direct the Assessing Officer to take necessary steps to address the request of both the assessee and the trust for the transfer of TDS credit from the Form No. 26AS of the trust to the Form No. 26AS of the assessee and, thereafter, to allow the credit in accordance with law. The grounds of appeal of the assessee are accordingly allowed for statistical purposes. Jamshed R Bilimoria 5 ITA No. 6066/MUM/2024 26AS of the trust rather than in the Form No. 26AS of the assessee. hat the Department grants credit for TDS only if the said amount appears in the Form No. 26AS of the relevant assessee. Since the TDS credit in the present case was not appearing in the Form No. 26AS of the assessee, the Assessing on procedural compliance, declined to grant such credit. Ideally, the assessee ought to have ensured that the deductor deducted tax in the hands of the assessee rather than in the name of the trust. However, the crux of the matter is that the as neither granted credit for the TDS in the hands of the trust nor in the hands of the assessee. As a result, the tax deducted at source continues to remain with the Government, while, at the same time, a demand has been raised against the amounts to an inequitable situation, which cannot Ld. CIT(A) has already directed the Assessing Officer to verify the assessee’s claim and grant TDS credit in accordance with the provisions of the Income- tax Act, 1961. If such credit has not been granted till the date of Assessing Officer to take necessary steps to address the request of both the assessee and the trust for the transfer of TDS credit from the Form No. 26AS of the trust to the Form No. 26AS of the assessee and, thereafter, to allow The grounds of appeal of the assessee are accordingly allowed for statistical purposes. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 21/02/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. In the result, the appeal of the assessee is allowed for nounced in the open Court on 21/02/2025. RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Jamshed R Bilimoria 6 ITA No. 6066/MUM/2024 In the result, the appeal of the assessee is allowed for /02/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "