Case Law Details
Nirav Bipinbhai Vaghasiya Vs ITO (ITAT Surat)
ITAT find that in the return of income the assessee claimed refund of TDS reflected in his Form-26AS. The CPC denied such refund in its intimation dated 08.10.2018. The assessee filed application for rectification under section 154. In the application under section 154, the assessee claimed such refund on the ground that during the financial year, immovable property was sold by said partnership firm (M/s Shri Hari Agri.) which was acquired by the partnership firm from its own source. The sale deed was executed by the assessee in the capacity of partner. The property was reflected in the balance-sheet of partnership firm. The TDS was made by purchaser and credited to the account of assessee (PAN). As the property was owned by the partnership firm, the capital gain was offered in the return of income of partnership firm, though document was executed by partner in its fiduciary capacity. No sale consideration was shown in case of assessee, however, such TDS was shown in Form-26AS. The assessee stated that there is no provision to transfer the credit of TDS to the partnership firm. No credit of TDS was claimed by partnership firm and assessee claimed such TDS credit in his case to avoid double taxation. The assessee claimed credit of such TDS reflected in Form-26AS. The capital gains of sale of immovable property was offered by partnership firm and there is no loss to revenue if credit / refund of TDS is given to assessee.
The NFAC/Ld. CIT(A) dismissed the application under section 154 vide intimation dated 23.10.2020 by taking view that provisions of section 199 and Rule 37BA, the credit can be claimed only in the year in which such income is assessable in the hand of the person other than deductee. It was also held that claim of credit can only be considered in the hand of firm as the income is assessable in the hand of partnership firm. The assessee executed the sale deed on behalf of the firm in the representative capacity as a partner. The assessee has not filed any declaration that as per Rule 37BA the credit be given to the partnership firm. I find that there is no dispute that the TDS was deducted on the sale consideration of the asset, which was owned by partnership firm. Further, there is no dispute that the assessee is partner in the said firm and signed the sale deed on behalf of partner in fiduciary relationship. It is also admitted fact that the TDS was credited in the account of (PAN) of assessee. However, from the fact of the present case, it is not clear that any tax liability was created against the firm on transfer of such asset, which was owned by firm. Thus, keeping in view all the facts and circumstances of the case, I deem it appropriate to restore the case to the file of assessing officer, with the direction to adjudicate the issue afresh. The assessee is also directed to move appropriate application under section 199 read with Rule 37BA for claiming the credit of such TDS with required declaration, undertaking of other condition prescribed therein. On filing such application with required declaration, the assessing officer shall decide the same in accordance with law. Needless to direct that before passing the order afresh the assessing officer shall grant proper and fair opportunity to the assessee. The assessee is also directed to make proper compliance on the notice of assessing officer in time. With these directions, all the grounds of appeal raised by the assessee are allowed for statistical purpose.
FULL TEXT OF THE ORDER OF ITAT SURAT
1.This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC”/Ld.CIT(A) dated 28.12.2021 for assessment year 2018-19, which in turn arises out assessment order passed by Asst. Director of Income Tax, Centralized Processing Centre (CPC) Bengaluru under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 23.10.2019. The assessee has raised the following grounds of appeal:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
