The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) stated that TDS credit cannot be refused to a trust only because of the appearance of the deduction in the trustee’s PAN instead of the trust’s Form 26AS when income has actually been proposed to tax by the trust.
The issue arose while processing the ITR of Shri Venktesh Ayurvedic Aushdhalaya Sita Ram Bag (the taxpayer). The CPC allowed TDS credit of only ₹9,93,220 against the trust’s claimed credit of ₹12,41,130 due to a mismatch with Form 26AS.
The taxpayer clarified that the disputed TDS related to interest earned on securities purchased using the trust’s funds. As the trust was unable to open a demat account in its own name, the securities were held in the trustee’s name.
The TDS was deducted using the trustee’s Permanent Account Number (PAN). The trust stated that the investment was made via RTGS from its own bank account, and the interest income was included in its return.
The CIT(A) denied the claim on the ground that the declaration required under Rule 37BA(2) had not been submitted by the deductee to the deductor.
The assessee’s counsel argued before the ITAT that filing the Rule 37BA declaration was a procedural matter and could not undermine the substantive right to claim credit when the individual claiming the TDS had indeed offered the income to tax.
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They placed reliance on the ITAT Pune ruling in Anil Ratanlal Bohora v. ACIT, which stated that “the requirement of filing declaration as per Rule 37BA(2) of the Income Tax Rules is purely procedural when the fact that the income on which TDS was deducted was established to not be of the deductee but of the other person. It was pointed out that the ITAT had held that the person who had reflected the income and had established the same to be his own was entitled to credit of TDS in such circumstances.”
The representative of the revenue kept the order of CIT(A) but was unable to differentiate the decisions relied upon by the taxpayer’s counsel.
The bench, Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member), said that the requirement was fulfilled because the trust had returned the interest income to tax and the related Tax Deducted at Source (TDS) had been deducted in the trustee’s hands.
The tribunal observed, “The credit for TDS deducted thereon could not have been denied merely because it was not reflected in the TDS return of the assessee in Form 26AS.”
The CPC/AO was asked to provide the disputed Rs 2,47,910 TDS credit, and the appeal was permitted.
| Case Title | Shri Venktesh Ayurvedic vs. Income Tax Officer, Ward (E) |
| Case No. | ITA No. 230/JODH/2026 (Assessment Year:2024-25) |
| Appellant by | Sh. Devang Gargieya |
| Respondent by | Ms. Nidhi Nair |
| Jodhpur ITAT | Read Order |
