Case 1: The assessee had been taking contracts in its name as well as in the names of its director and the Assessing Officer agreeing with the contentions of the assessee that as both the receipts were deposited in the assessee company’s accounts it was entitled to claim credit of TDS reflected in Form 26AS in the case of the director passed the Assessment Order for the assessment years 2010-11 and 2011-12 subject to verification that TDS had not been claimed by the director.
Against such directions, the assessee filed appeals before the Commissioner of Income-tax (Appeals). Though the appeals were allowed by the Commissioner of Income-tax (Appeals), the issue of claiming and granting of TDS credit in the account of the director as appearing in Form 26AS in the hands of the assessee was not the subject matter of the appeal.
As the assessment orders passed by the Assessing Officer were found to be erroneous and prejudicial to the interest of the Revenue, the Principal Commissioner of Income-tax, exercising his jurisdiction under section 263 of the Act, issued a notice to the assessee and by virtue of his order directed the Assessing Officer to revise the assessment by giving credit to the extent of TDS certificate issued in the name of the assessee only and withdraw the TDS certificate in the name of the director.
The Tribunal also held at para.17 of its order as under-
“There is no denial in the written submissions filed by the assessee before the Principal Commissioner of Income-tax and before us that at the relevant time, the order was passed by the Assessing Officer, Rule 37BA was applicable. Further, the assessee has failed to mention that the case of the assessee would fall in any of the ingredients mentioned in Rule 37BA, as reproduced by the Principal Commissioner of Income-tax in para 2 of the impugned order. In view of the legal position, the opinion formed by the Principal Commissioner of Income-tax that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of revenue cannot be faulted”
Thus, the issue was answered against the assessee, and TDS reflecting in 26AS of the director was not given to the assessee company.
Case 2: The facts of the case which arose before the Madras High Court in Madura Coats Ltd. v. CIT  25 Taxman 200 (Mad) were the assessee company was formed by the amalgamation of three companies. The amalgamation took place on January 1, 1975, with retrospective effect from July 1, 1974. During the accounting year relevant to the assessment year 1976-77, two of the three companies which held shares in the third company were entitled to dividend income on the said shares, and on the said dividend income, the tax was deducted at source. This dividend was declared at the annual general meeting of the company held on December 27, 1974.
The assessee’s claim before the Assessing Officer that the dividend income could not be taken as its income but the tax deducted at source from the said dividend should be given credit to in its assessment was rejected by the Assessing Officer who held that the dividend was the income of the amalgamated company as per the terms of the amalgamation.
The Commissioner of Income-tax (Appeals), however, directed the Assessing Officer to exclude the dividend income from the total income of the assessee and as regards the tax deducted at source, he held that the proper person should approach the concerned authority for a refund of the tax wrongly deducted.
The Tribunal held that the tax deducted at source could not be given credit to the assessee in whose hands the dividend income had not been taxed.
The High Court, dismissing the petition, held that the finding of the Tribunal that the dividend income could not be treated as the income of the amalgamated company viz., the assessee, automatically resulted in the tax deducted at source from the said gross dividend not being part of the assessee’s income. The tax deducted at source could be given credit only in the case of the company in whose hands the income was to be assessed and as per section 198 of the Income-tax Act, 1961, the tax deducted at source would be the income received by the erstwhile companies which owned the shares in respect of which the dividend was declared. Accordingly, credit for the tax deducted at the source from the said dividend could not be given to the assessee.
Case 3: The Madras High Court in the case of CIT v. Tanjore Permanent Bank Ltd.  30 Taxman 265 (Mad.) held that:
“It is well settled that a tax credit can be given only in cases where the tax is paid on the income in respect of which tax has been deducted at source and which is offered for assessment.”
The assessee-bank, in this case, advanced money to its constituents, bought bonds of Electricity Board for them but in its own name, kept them in its own custody but the real and beneficial owners were the said constituents and the assessee-bank claimed credit for tax deducted at source on interest income of the said bonds through interest income from the said bonds had not been included by the assessee in its return. The Assessing Officer allowed credit for the said tax deducted at source but subsequently withdrew it by passing an order under section 154 of the Act. The High Court, reversing the order passed by the Tribunal, held that giving credit of tax deducted at source on the said interest income which had not been included in assessee’s total income amounted to a mistake apparent from record amenable to rectification under section 154 of the Act by the Assessing Officer.