Venktesh Ayurvedic Aushdhalaya Vs ITO (ITAT Jodhpur)
Jodhpur ITAT Allows Trust TDS Credit Reflected in Trustee’s Form 26AS: Rule 37BA Declaration Is Procedural and Cannot Defeat Substantive Entitlement
Summary: The Jodhpur Bench of the Income Tax Appellate Tribunal allowed the appeal of Shri Venktesh Ayurvedic Aushdhalaya and directed the CPC/AO to grant TDS credit of Rs.2,47,910/- for Assessment Year 2024-25. The dispute arose from processing of the return under Section 143(1) of the Income Tax Act, 1961, where the CPC denied part of the TDS credit on account of a mismatch between the credits claimed and those reflected in Form 26AS.
The assessee trust had claimed prepaid taxes/TDS credit of Rs.12,41,130/-, whereas credit of only Rs.9,93,220/- was allowed. The assessee explained that the disputed TDS related to interest income earned on securities purchased from the trust’s funds. Since the trust contended that it could not open a demat account in its own name, the securities were held in the name of the trustee and the TDS was consequently deducted against the trustee’s PAN. The corresponding interest income, however, was returned to tax by the trust.
The CIT(A) upheld the denial of the disputed TDS credit of Rs.2,47,910/- by relying on Section 199 read with Rule 37BA(2) of the Income-tax Rules, 1962. The CIT(A) held that the requisite declaration by the deductee, contemplated by Rule 37BA(2), had not been furnished and treated the requirement as mandatory.
