Amendment by FA 2024 Regarding Credit of TCS to Be Given to Person Other Than Collectee is Retrospective in Nature | ITAT

Case Details: Anshul Anil Goel vs. DCIT (1) 1 - [2025] 171 taxmann.com 382 (Pune-Trib.)

Judiciary and Counsel Details

• R.K. Panda, Vice President & Ms Astha Chandra, Judicial Member
• Sharad A. Shah for the Appellant.
• Ramnath P. Murkunde for the Respondent.

Facts of the Case

Assessee, an individual, filed his return of income declaring total income, including the income of his minor child, which had been clubbed as per the provisions of section 64(1A). The assessee claimed TDS and TCS, and the said TCS constituted an amount of TCS collected in the hands of his minor child.

Since the income of the minor child was required to be clubbed in the hands of the assessee, the assessee claimed the TCS collected in the name of the minor child. However, the Centralized Processing Center (CPC) denied the claim of TCS collected in the hands of the minor child and raised a demand for the corresponding amount.

Assessee filed an appeal before the CIT(A), wherein CIT(A) dismissed the appeal. Aggrieved by the order, an appeal was filed to the Pune Tribunal.

ITAT Held

The Tribunal held that it was an admitted fact that the assessee filed his return of income declaring total income, including the income of his minor child, which had been clubbed as per the provisions of section 64(1A). Since the income of the minor child was required to be clubbed in the hands of the assessee, the assessee claimed the TCS collected in the name of the minor child.

The CIT(A) dismissed the claim on the ground that the Memorandum explaining the provisions in the Finance Bill, 2024, was applicable from 1-1-2025. Since no other mechanism had been provided to allow such TCS credit in the Act till the said amendment, which took effect only from 1-1-2025, the claim of the assessee could not be entertained.

It was held that the assessee cannot be denied his rightful claim of TDS/TCS if the corresponding income has already been offered to tax. Therefore, the amendment introduced by the Finance Act 2024 should be considered retrospective and should not operate to the assessee’s disadvantage in asserting a legitimate claim.

Since the income of the minor child was clubbed with the income of the assessee, the corresponding TCS collected in the hands of the minor also should be allowed, and due credit should be given to the assessee. The revenue cannot be allowed to retain the tax collected at the source without credit being available to anybody. Accordingly, if the credit of tax is not allowed to the assessee, credit of TCS cannot be taken by anybody.

List of Cases Reviewed

• Allied Motors (P) Ltd. v. CIT (1997) 224 ITR 677 (SC)
• Genpact India Pvt. Ltd. v. DCIT (2019) 265 DLT 123 [Para 18] – followed.

List of Cases Referred to

• Aluminium Corporation of India Ltd. v. Union of India & Ors. 1975 AIR 2279 (para 11)
• Pinnacle Vastunirman Pvt. Ltd. v. Union of India (2021) 438 ITR 27 (Bom) (para 11)
• Allied Motors (P.) Ltd. v. CIT [1997] 91 Taxman 205/224 ITR 677 (SC) (para 12)
• Wipro Limited v. JCIT & Anr. (2021) 205 DTR 434 (Kar) (para 12)
• Union of India v. Tata Chemicals Ltd. [2014] 43 taxmann.com 240/222 Taxman 225/363 ITR 658 (SC) (para 12).