09 October 2015
Dear Experts, My client is having business income from prop firm. He is also running a firm in his son's name. in 2012-13, Income of Son (Rs 450000) has been clubbed with the Income of father and TDS deducted pertains to Son has also been claimed in return of father. We received a notice u/s 154 from CPC, allowing credit of TDS of father only. Consequently demand equal to TDS portaion of Son has been raised. Now how we can reply the same online as demand is raised by CPC.
10 October 2015
TDS pertaining to son has been disallowed because it might be in the PAN of son and though legally his income has been clubbed in father's return since TDS was deducted in PAN of son it may not be reflecting in father's 26AS. Check father's 26AS and son's 26AS. This demand will rectify only when TDS portion of son is reflected in 26AS of father for this TDS return of person who has deducted TDS has to be revised quoting PAN of father.
13 October 2015
Thanks Mr Abhishek But some there is no provision for quoting PAN of father is payment is made to son so deductor will not mention the PAN of father. I spoke with other experts, the suggest to file rectification for credit of TDS of Son because corresponding income has been taxed in hands of father.
13 October 2015
Under rule 37BA of the Income Tax Rules situations like these are dealt with. It says that credit will be given to person in whose hands the income has been clubbed provided the deductee files a declaration with the deductor giving PAN of other person in this regard. So there is legal provision whereby TDS may be deducted in the name of the other person in whose hands the income has been clubbed. Father will get TDS credit only if TDS return is revised quoting PAN of father so that the same may reflect in his 26AS.
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