Yogesh Chander & Sons HUF Hero Nagar Vs ITO (ITAT Chandigarh)
Beneficial Owner Wins! TDS Cannot Be Denied Due to PAN Mismatch; TDS Belongs to HUF, Not Karta! ITAT Restores Credit After Rule 37BA Compliance
Assessee, a HUF, filed its return declaring income of ₹46,08,750 & claimed TDS credit of ₹4,57,068. CPC while processing u/s 143(1) allowed only ₹1,48,318 & disallowed ₹3,08,750 TDS on dividend income received from Hero MotoCorp Ltd. on the ground that such TDS was reflected in Form 26AS of the Karta (Individual) & not in the PAN of the HUF. CIT(A) upheld the denial of credit by holding that the Assessee failed to comply with the conditions of Rule 37BA(2), i.e. (i) filing of declaration with deductor, & (ii) deductor reporting TDS in the name of the correct person.
Before Tribunal, Assessee contended that it is the beneficial owner of the shares for more than 30 years & dividend has always been assessed in its hands, not in the hands of the Karta. It was further submitted that as per directions of the Bench in the previous hearing, the Assessee has now complied with Rule 37BA(2). Assessee produced (i) declaration filed with Hero MotoCorp Ltd. through the Karta requesting transfer of TDS to HUF PAN, & (ii) updated Form 26AS of the HUF showing TDS of ₹3,08,750 as of 07.10.2025. Reliance was placed on decisions like Gopal Das HUF (ITAT Delhi), Rajeev Goyal HUF (ITAT Jaipur) & M.M. Fish Products (Hyd ITAT) that TDS credit cannot be denied on mere technical lapses once income is offered in correct hands.
