U/s 199 of the Income Tax Act

Court :
IN THE ITAT COCHIN BENCH

Brief :
Section 199 of the Income-tax Act, 1961 - Deduction of tax at source - Credit for tax deducted - Assessment year 1996-97 - Whether amendment to section 199, permitting to adjust tax deducted at source (TDS) proportionately in hands of co-owners had been brought in statute book only with effect from assessment year 1997-98, with prospective effect - Held, yes - Whether before said amendment, normally credit for TDS was given to person in whose name TDS certificate was issued - Held, yes - Whether so long as assessee is having a certificate in his name for amount higher than tax due to be paid by him, excess tax is to be refunded to him - Held, yes - Assessee was one of four co-owners of property given on lease - In respect of rent paid, lessee deducted tax at source and issued a certificate for entire TDS in name of assessee - Whether for relevant year, assessee was entitled to full credit of TDS on basis of said certificate, even though he had included only one fourth of rental income in his total income - Held, yes The assessee along with three more co-owners was receiving rent from certain property. In respect of the rent paid, the lessee deducted tax at source and issued the certificate for entire tax deducted at source (TDS) in the name of the assessee. The assessee filed his return claiming refund of the amount towards TDS. The Assessing Officer, however, restricted the same to one-fourth on the ground that the assessee had included only one fourth of rental income as his share in his total income, and, therefore, in terms of section 199, the assessee was entitled to claim credit for TDS only to the extent of such share of income as assessed in his hands. On appeal, the assessee contended that there was no specific provision in section 199 till the assessment year in question and such a provision, enabling adjustment of proportionate share of TDS relatable to income from jointly owned property, was brought into effect specifically only from the assessment year 1997-98. The Commissioner (Appeals) accepted the assessee’s claim and directed the Assessing Officer to give full credit of the TDS along with interest. On revenue’s appeal :

Citation :
Income-tax Officer, Ward-2(1), Ernakulam v. T.G. Veeraraghavan