TDS u/s 194Q Not Creditable if Income Not Assessee’s | ITAT

Case Details: Jivanbhai Somabhai Patel vs. Deputy Commissioner of Income-tax, CPC, Bengaluru [2026] 185 taxmann.com 517 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• Ms Suchitra Kamble, Judicial Member
• P F Jain, AR for the Appellant.
• Umesh Kumar Agarwal, Sr. D.R. for the Respondent.

Facts of the Case

The assessee, a commission agent registered with the APMC, facilitated the sale of farmers’ agricultural produce to traders at an auction held in the APMC’s open market. While filing the return, the assessee claimed TDS of Rs. 1.48 lakhs, including Rs. 53,000 under Section 194Q. During the processing of the return, the Assessing Officer (AO) allowed TDS of only Rs. 5,777. AO contended that the income corresponding to TDS reflected in Form 26AS in the assessee’s PAN was not included in the assessee’s returned income.

On appeal, the CIT(A) held that the TDS in dispute was deducted by purchasers on the sale of agricultural produce belonging to farmers. The assessee acted only as an APMC commission agent. Since the corresponding income was not assessable in the assessee’s hands despite TDS appearing in his PAN, credit could not be allowed under section 199 read with Rule 37BA(2). The assessee was required to get the TDS corrected in the names of the actual beneficiaries. The matter reached the Ahmedabad Tribunal.

ITAT Held

The Tribunal held that the assessee himself had accepted that the TDS made by the purchasers was not his sales, but those of the agriculturist/farmer. Hence, the TDS had been made wrongly in the PAN of the assessee, and the credit thereof ought not to have been claimed by the assessee in the return.

Therefore, the CIT(A) had rightly concluded that the assessee was at liberty to seek an appropriate remedy in respect of any mismatch in TDS as per the return filed by the deductor. The same cannot be rectified by getting an appropriate correction statement filed by the deductor. On the issue of granting credit for TDS under section 194Q, there was no infirmity in the action of the AO, CPC, and therefore, no interference was needed.

As a result, the assessee’s appeal is dismissed.