Widow entitled to TDS in the name of her late husband, after she had declared his income in her own tax returns (ITRs): ITAT

 

Lovely Das Versus Addl/JCIT (Case No.: I.T.A. Nos.: 291, 292, 293 & 294/KOL/2025)

Facts:

1.  The appellant, Lovely Das of Kolkata, became proprietor of her late husband Jagbandhu Das’s sole proprietorship, M/s Elco Enterprise, after his death in June 2016.

2.  In addition to her own interest income, she declared in her returns the business income and bank interest earned in her late husband’s name, along with corresponding TDS amounts.

3.  However, the Centralised Processing Centre (CPC) allowed her credit only for TDS appearing in her own name, disallowing the portion – totalling over ₹72 lakh across four years – that was reflected against her late husband’s PAN.

4.  For instance, in AY 2019-20, against a claimed TDS credit of ₹46.52 lakh, the CPC allowed only ₹24.46 lakh, denying ₹22.06 lakh linked to her husband’s income. This led to substantial additional tax demands and interest under Sections 234A, 234B, and 234C.

5.  The Assessing Officer and Commissioner (Appeals) [Addl./JCIT(A)] held that under Rule 37BA of the Income Tax Rules, TDS credit cannot be transferred to another person unless the deductor reports it in that person’s name.

6.  They faulted the appellant for not ensuring the deductors updated records after her husband’s death, and suggested she should have filed returns as legal heir in his name to claim the credit.

ITAT Kolkata held as below:

1.  Rule 37BA(3)(i) of the Income Tax Rules specifically provides that TDS credit shall be given to the person in whose hands the related income is assessed.

2.  Since the appellant had included her husband’s business and interest income in her own returns, she was entitled to claim the corresponding TDS, provided no other person had claimed it.

3.  The credit for TDS made in the name of appellant’s deceased husband shall be allowed to her as per law as the income has been shown by her in her return of income.

4.  The appellant may approach the deductor to get the records corrected as required under rule 37BA, if required, so that the TDS is reflected in her PAN and file the evidence before the Ld. AO that the credit for the TDS has not been availed by any other person.

The copy of the order is as under:

1754309798-XwH4KR-1-TO