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The taxpayer is entitled to TDS credit of its sister concern appearing in its Form 26AS due to an inadvertent error of a deductor

Background

Recently, the Delhi High Court (High Court) in the case of Relcom1 (the taxpayer) held that the taxpayer is entitled to the credit of the Tax Deducted at Source (TDS) of its sister concern due to an inadvertent error made by vendor mentioning the taxpayers Permanent Account Number (PAN) in the TDS certificate due to which TDS credit was reflected in the taxpayers Form 26AS instead of Form 26AS of the sister concern. The benefit of the TDS certificate was not availed by the sister concern.

The High Court observed that TDS credit was not availed by the sister concern and hence the tax department cannot deny the taxpayers TDS claim on a mere technical ground that corresponding income was not that of the taxpayer. The High Court also observed that Rule 37BA of the Income-tax Rules, 1962 (the Rules) envisages grant of TDS credit to entities other than the deductee. Therefore, the taxpayer is entitled to TDS credit.

Facts of the case

High Courts ruling

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