ITAT Mumbai: CIT(A) Cannot Remand TDS Credit Issue; Directs AO Verification in Estate of Pallonji Mistry Case
Court / Authority
Income Tax Tribunal
Update / Judgement Date
26 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
Key Facts and Tribunal Findings
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, partly allowed the appeal of the Estate of Pallonji Shapoorji Mistry for Assessment Year 2024–25, holding that the Commissioner (Appeals) lacks power to remand matters to the Assessing Officer under Section 251, while directing factual verification regarding TDS credit.
The case concerned denial of TDS credit of ₹3.56 lakh on dividend income offered to tax by the estate of the deceased. The assessee contended that the income accrued post the demise of Pallonji Mistry and was rightly taxed in the hands of the estate under Section 168, thereby entitling it to corresponding TDS credit under Section 199.
The intimation under Section 143(1) denied the TDS credit. On appeal, the CIT(A) restored the matter to the Assessing Officer for verification of whether the income pertained to the pre-death or post-death period.
The Tribunal held that under Section 251, the CIT(A) is empowered only to confirm, reduce, enhance, or annul an assessment, and does not have jurisdiction to remand matters to the Assessing Officer except in limited circumstances. Accordingly, the remand direction was held to be legally unsustainable.
However, the Tribunal observed that determination of the relevant period of income—whether pre- or post-death—was essential to decide eligibility of TDS credit. It held that income accruing post-death is taxable in the hands of the estate, and corresponding TDS credit must be allowed accordingly.
In absence of complete factual clarity on record, the Tribunal directed the Assessing Officer to verify the period of accrual of income and grant TDS credit in accordance with law.
The appeal was thus partly allowed for statistical purposes.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about Income Tax Tribunal
- What is the Income Tax Appellate Tribunal (ITAT)?
- The ITAT, set up in 1941, is the second appellate authority in direct tax matters and the final fact-finding body. It hears appeals against orders of the Commissioner (Appeals) and certain other authorities, through benches across India.
- What is the time limit to file an appeal before the ITAT?
- An appeal must be filed within two months from the end of the month in which the order is communicated. This rule has applied since 1 October 2024 and continues under the Income-tax Act, 2025. The Tribunal can condone delay for sufficient cause.
- Can the ITAT stay a tax demand?
- Yes. The Tribunal can stay recovery of a disputed demand while an appeal is pending, usually on deposit of a part of the demand or furnishing security. Stays are granted for a limited period, and the appeal is expected to be decided within it.
- Where does an appeal go after the ITAT?
- An appeal against an ITAT order lies to the High Court, but only on a substantial question of law. A further appeal lies to the Supreme Court.
- How can White Collar Professional help with a ITAT matter?
- Post your requirement on White Collar Professional to receive proposals from verified Chartered Accountants and tax Advocates, compare them, and pay securely through the platform. This page also tracks the latest ITAT ITAT orders as they are reported.
