This is appeal preferred by revenue in case of Shri T.G. Veeraraghavan, 170, Rainbow Drive, Opp. Wipro Corporate Office, Bangalore- 5 6 0 035 against appellate order dated 27-1-2005 of Commissioner of Income-tax (Appeals)-II, Kochi, for assessment year 1996-97. 2. effective ground of appeal raised by revenue reads as under: "The learned Commissioner of Income-tax (Appeals) erred in directing to give credit for entire TDS even when only one fourth of rental income is assessed in hands of assessee. learned Commissioner of Income- tax (Appeals) failed to note that proportionate income as per proviso to section 199." 3. brief facts of case are that Shri T.G. Veeraraghavan, resident individual, filed his return of income on 31-12-1997 declaring total income of Rs. 1,90,810, for assessment year 1996-97. While working out refund due to assessee amounting to Rs. 1,85,875, assessee claimed sum of Rs. 2,31,069 towards tax deducted at source. This return was processed under section 143(1)(a) and intimation was issued on 26-2-1999. While computing refund due to assessee, Assessing Officer limited claim of tax deducted at source at 1/4th of total claim. Assessing Officer limited assessee's claim of tax deducted at source to 1/4th since assessee included only 1/4th of property income as his share in total income. assessee filed rectification application dated 4-6-1999 requesting to rectify that part of intimation relating to credit given for tax deducted at source. main contention of assessee was that amendment to section 199 took effect only from 1-4-1997 relevant to assessment year 1997-98 and therefore credit for tax deducted at source need not be considered in hands of joint owners and credit should be given for entire amount in hands of person, in whose name tax deducted at source certificate was issued (in this case, assessee). It was further contended before Assessing Officer, that tax deducted at source certificate had been issued by tenant in favour of assessee only who received it for and on behalf of co-owners also and that since assessee being one of co-owners, he was liable only for 1/4th share in property income and was liable to be assessed only for his share of gross rent received. It was further argued that co-owners also filed return of income declaring their share of income relating to property and paid taxes, if any, due thereon. However, Assessing Officer was of view that it was to be seen that principles of taxation relating to income chargeable to tax during assessment year has been discussed in various provisions of Income-tax Act, 1961, and that provisions relating to tax deducted at source mentions income, receipt or payment relevant to assessment year in which such income, receipt or payment is assessable in hands of assessee/persons entitled to receive income, receipts and payments. According to him, it would be seen there from that income, receipts or payments referred to therein is income etc. included in total income of assessee from various heads of income and accordingly credit for tax deducted at source as per section 199 has also to be considered in relation to income etc. includible in total income of assessee. Thus, according to him, it would be seen that even prior to amendment to section 199, credit for tax deducted at source should have been considered only on basis of inclusion of income etc. in hands of assessee. Admittedly, according to him, in this case assessee is only co-owner of property, income there from could have been considered only under section 26 of Income-tax Act, 1961, and thus, it would be seen that share income from property has to be admitted by each co- owner and share of tax deducted at source should also have been claimed by each of them. Assessing Officer also has noted that co-owners have not filed any return of income under section 139 or under any other provisions of Act admitting share of property income and paid tax as defined under section 2(43) of Income-tax Act, 1961. According to him, it would be again seen that provisions of Voluntary Disclosure of Income Scheme, 1997 permitted assessee to disclose undisclosed income and pay prescribed rate of tax under Scheme, which was independent of provisions of Income-tax Act, 1961 and this again would show that while paying tax under Voluntary Disclosure of Income Scheme, 1997, assessees were not entitled to claim credit for pre-paid taxes. Since assessee had not admitted entire property income in his hands, assessee was not entitled to claim credit for entire tax deducted at source as per certificate issued by lessee, according to Assessing Officer. Since assessee had admitted only his share of income from property income, assessee was entitled to claim credit for tax deducted at source only to extent of such share of income assessed in his hands based on section 199 of Act. Thus Assessing Officer rejected petition filed under section 154 of Act, by assessee. 4. Aggrieved, assessee moved matter in appeal before first appellate authority before whom similar submissions as made before Assessing Officer were made. It was reiterated before Commissioner of Income-tax (Appeals) that there was no specific provision in section 199 of Act, till assessment year 1996-97 and such provision enabling adjustment of proportionate share of tax deducted at source relatable to income from jointly owned property was brought into effect specifically only from assessment year 1997-98. It was further pleaded that action of Assessing Officer in having adjusted only proportionate share of tax deducted at source in hands of assessee has effect of reducing refund actually due to assessee and has led to anomalous situation as under: (a) neither assessee holding certificate under section 203 got credit for entire tax deducted; (b) nor are other co-owners not possessing certificate in their favour entitled to credit in absence of such certificate. Commissioner of Income-tax (Appeals) after considering submissions of learned representative of assessee in light of facts and circumstances of case, allowed claim of assessee by directing Assessing Officer to grant interest also on refundable tax deducted at source to which appellate had not been granted credit, as per provisions of law. Now revenue is on appeal before Tribunal with ground of appeal extracted as above. 5. At time of hearing learned departmental representative reiterated contents of order under section 154 (which has been extracted elsewhere of this order) as her submissions. She specifically drew my attention to para 5 of section 154 order passed by Assessing Officer. She also pleaded that other co-owners had not voluntarily filed any return admitting share of property income and only they have availed benefit under Voluntary Disclosure of Income Scheme, 1997 and hence they could not claim proportionate tax deducted at source made on rental income, by lessee. On other hand, learned counsel for assessee apart from reiterating very same submissions made before authorities below, submitted that co-owners subsequently declared same income under Voluntary Disclosure Income Scheme and not claimed their share of tax deducted at source. He also placed on record Xerox copy of notes on clauses in 220 ITR 216 (Statute) and drew my attention to clause (48) seeking amendment to section 199 of Income-tax Act relating to credit for tax deducted. He pleaded that why amendment was brought in is important. Adverting to clause (48), he pleaded that these amendments adjusting proportionate tax deducted at source has been inserted only with effect from 1-4- 1997 relevant to assessment year 1997-98 and assessee's case falls for assessment year 1996-97, during assessment year such provision was not available in Act. He further pleaded that when there is doubt either as to adjusting proportionate tax deducted at source in hands of co-owners or not, applying decision of Apex Court in case of Commissioner of Income-tax v. Vegetable Products Ltd. [1993] 88 ITR 192, issue should be decided in favour of assessee. 6. I have heard rival submissions and considered facts and materials o n record. There is no dispute about fact that there were four co-owners receiving rent but certificate for tax deducted at source was issued in name of assessee only. There is also no dispute about fact that other co-owners have not claimed credit of their share of tax deducted at source. It is also not disputed that amendment to section 199 permitting to adjust tax deducted at source proportionately in hands of co-owners has been brought in statute book only with effect from assessment year 1997-98. In other words, amendment has been brought into statute with prospective but not retrospective effect. In these facts and circumstances I find that lessee has issued certificate for tax deducted at source under section 194(1) deducting tax of Rs. 2,25,000 in name of assessee, Shri T.G. Veeraraghavan, even though he was only co-owner. Before amendment to section 199, which was brought into statute book with effect from assessment year 1997-98, normally credit for tax deducted at source was given to person in whose name certificate was issued. As rightly pointed out by learned counsel for assessee before Commissioner of Income-tax (Appeals) if such full credit is not given to assessee, who is holding certificate, anomalous situation would arise as under: (a) neither assessee holding certificate under section 203 got credit for entire tax deducted; (b) nor are other co-owners not possessing certificate in their favour entitled to credit in absence of such certificate. It is not fair on part of department also to say that it would not give credit to anybody in respect of tax deducted at source in respect of remaining co-owners, even after taking entire TDS into its treasury, so long as assessee is holding certificate for entire tax deducted at source in his name. So long as assessee is having certificate in his name for amount higher than tax due to be paid by him, excess tax is to be refunded to assessee. If credit was not given for entire amount mentioned in certificate, it would definitely amount to denial of refund due to assessee. In this view of matter, I do not find infirmity in order of first appellate authority and as such I confirm same. 7. In result, appeal of revenue is dismissed. *** INCOME TAX OFFICER v. T.G. VEERARAGHAVAN