Kanika Satyanand Vs ITO (ITAT Delhi)
She Asked for Half the TDS; the Tribunal Shifted All the Income to Her Brother
A mismatch between income and Form 26AS
Kanika Satyanand offered to tax a 50% share of income received from Zodius funds for assessment year 2024–25 and claimed the corresponding TDS credit of ₹2,22,988. The difficulty was that the deductors had reported the entire TDS under her brother Mohit Satyanand’s PAN. The credit claimed by Kanika was denied during processing, and the NFAC upheld that denial.
The figures recorded by the Delhi ITAT were that total income of ₹44,59,794 had been credited and TDS of ₹4,45,979 deducted under Section 194LBB. Mohit reported ₹22,29,988, representing half the income, and claimed approximately half the TDS. Kanika said she had reported the remaining half and should receive the matching TDS credit. Her appeal concerned ₹2,22,988, not a claim for credit of the entire deduction.
The case therefore presented a familiar problem: the income is offered in one person’s return, while the TDS appears against another person’s PAN. Kanika relied on Section 199 read with Rule 37BA, arguing that credit should follow the person who offered the corresponding income to tax.
What Kanika asked the Tribunal to do
Kanika’s ground of appeal was specific. She did not ask for the whole Zodius income to be taxed in Mohit’s hands. She pointed out that he had claimed credit for only 50% of the TDS in his own return. According to her, this supported her claim that the other half of the income and TDS belonged in her return.
The Revenue defended the denial of credit. The order does not set out a detailed factual dispute over the income split or any independent finding that Kanika’s reported half actually belonged to Mohit. The Tribunal itself recorded that Kanika had offered the remaining 50% to tax and that Mohit had claimed only his half of the deduction.
On those recorded facts, one might expect the decision to address whether Kanika could receive proportionate credit despite the PAN mismatch. The Tribunal instead gave a very different direction.
The operative direction goes the other way
After recording the 50:50 reporting, the Tribunal directed the Assessing Officer to delete the entire addition in Kanika’s hands, tax 100% of the income in Mohit’s hands and give him credit for 100% of the TDS. It allowed Kanika’s appeal.
That is the operative holding of the order. It would be inaccurate to describe this decision as one in which the Tribunal allowed Kanika’s claim for ₹2,22,988 of TDS credit. It did not. It proposed to remove the income from her hands altogether and place the full income and full credit with her brother.
There is also an ambiguity in the phrase “entire addition.” The dispute described in the order arose from denial of TDS credit during processing, rather than a clearly identified addition of the Zodius income to Kanika’s returned income by the AO. The order does not explain what specific addition is to be deleted or provide a computation reconciling that phrase with her return.
The unanswered questions
The Tribunal did not explain why the entire income should be taxed in Mohit’s hands after noting that each sibling had reported half. Nor does the order set out an examination of their underlying entitlement to the investment income. The fact that a deductor used Mohit’s PAN explains where the TDS appeared; by itself, it does not explain the direction to shift 100% of the taxable income to him.
The practical implementation is equally unclear. Mohit was not the appellant in Kanika’s appeal. The order contains no discussion of his assessment status, the procedure through which his income would be changed, or how the corresponding TDS credit would be adjusted. These are material questions when the relief ordered affects another taxpayer’s return.
The case therefore has to be read in two parts. Its narration records a claim that half the income was taxed in Kanika’s hands without the matching TDS credit. Its operative paragraph directs that none of that income remain in her hands, with all income and credit going to Mohit. The order does not supply the reasoning that connects those two positions.
Author’s comment
For practitioners, this is a case where the operative paragraph must be checked before citing the result. The facts and the ground of appeal appear to present an issue under Section 199 and Rule 37BA concerning proportionate TDS credit. But the actual direction does not decide that issue in Kanika’s favour in the manner she requested. It reallocates the whole income and TDS to her brother.
Anyone dealing with a similar PAN mismatch should first establish who is legally entitled to the income, verify how much each person has offered in the return and claimed as TDS, and reconcile the deductor’s reporting. This particular order offers limited guidance on granting split TDS credit, because its stated result follows a different route without explaining the basis for taxing Mohit on the full amount.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “Ld.CIT(A))”] vide order dated 13-3-2026 pertaining to A.Y. 2024-25 arising out the order dated 30.9.2025 passed u/s.154 of the Income-tax Act, 1961, (in short ‘the Act’).
2. The assessee raised the following solitary ground of appeal:
“The CIT(A) erred in law and on facts in denying TDS credit of Rs. 2,22,988/- despite the assessee having duly offered the corresponding 50 percent share of income to tax. The CIT(A) failed to appreciate that Mr. Mohit Satyanand had claimed credit for only 50 per cent of the TDS in his return of income, thereby clearly attributing the balance income and corresponding TDS top the assessee. The denial of TDs credit on mere procedural grounds, despite complete disclosure of material facts, is contrary to Section 199 read with Rule 37BA and settled principles of substantive justice.”
3. The brief facts of the case are that the assessee filed her return of income for AY 2024-25 on 30.7.2024 declaring income of Rs. 1,00,50,890/-. The return was processed u/s. 143(1) of the Act on 29.9.2025 by denying the TDS credit of RS. 2,22,988/-, against which the Assessee is in appeal before us.
4. The Ld. AR submitted that CIT(A) erred in law and on facts in denying TDS credit of Rs. 2,22,988/- despite the assessee having duly offered the corresponding 50 percent share of income to tax. It was further submitted that CIT(A) failed to appreciate that Mr. Mohit Satyanand had claimed credit for only 50 per cent of the TDS in his return of income, thereby clearly attributing the balance income and corresponding TDS top the assessee. The denial of TDS credit on mere procedural grounds, despite complete disclosure of material facts, is contrary to Section 199 read with Rule 37BA and settled principles of substantive justice.
5. On the other hand, Ld. DR relied upon the orders of the authorities below.
6. We have heard the parties and perused the material available on record. It is noted that the assessee claimed TDS credit of RS. 2,22,988/- (deducted by Zodius Techology Fund and Zodius Technology Opportunities Fund) out of the total TDS claimed of Rs. 4,756,082/- on income offered to tax. This TDS pertains to income received from Zodius Technologies and was deducted under section 194LBB of the Income Tax Act. The total income credited by Zodius Technologies amounted to Rs. 44,59,794/-, on which TDS of Rs. 4,45,979/- was deducted. The TDS, whoever, was deducted in the name of Mr. Mohit Satyanand (brother of the assessee), whose PAN is AFGPS1957P. It is further noted that during the relevant assessment year, Mr. Mohit Satyanand (brother of the assessee) while filing his return of income, reported only 50% of the income from Zodius Technologies i.e. Rs. 22,29,988/- and correspondingly claimed 50% of TDS, i.e. Rs. 2,22,988, as reflected in his computation of income and Form 26AS. The remaining 50% of income, alongwith the proportionate 50% of the TDS, was duly offered to tax in the assessee’s return, but TDS credit was not allowed, however, assessee has duly offered the corresponding 50 per cent share of income to tax and Mr. Mohit Satyananad had claimed credit for only 50 per cent of the TDS in his return of income, thereby clearly attributing the balance income and corresponding TDS to the assessee. In view of aforesaid discussions, we direct the Ld. AO to delete entire addition in assessee hands and tax 100% of income in the hands of Mr. Mohit Satyanand and corresponding give credit of 100% TDS thereon. This would meet the ends of justice.
7. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court 28.09.2026.
