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Before: SHRI PAWAN SINGH & SMT.RENU JAUHRI
This appeal is filed by the assessee against the order of the ADDL/JCIT (A) Bhubaneswar [hereinafter referred to as “CIT(A)”] dated 11.06.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2015-16.
The grounds of appeal are as follows:
“1. The learned assessing officer has erred in initiating proceedings under section 201(1A) of the act for non-deduction of TDS under section 1941A of the Income Tax act 1961 upheld by CIT.
2. The learned Assessing officer has erred in charging the interest under section 201(1A) of the act at the rate of 1% per month for non-deduction of TDS upheld by CIT.
3. The appellant craves leave to add, amend and / or alter Any of the foregoing grounds as and when required.”
The brief facts of the case are that the assessee had purchased an immovable property jointly with Rahimaben Jamalbhai Payak Patel from Nizarali Abdulbhai Dosani in F.Y. 2014-15 for a total consideration of Rs. 1,10,00,000/-. It was noticed by the ITO, TDS Ward 2(2)1, Mumbai [herewith referred to as the AO] that requisite TDS u/s. 194 IA @1% had not been deducted by the purchasers.
Accordingly, vide order u/s. 201(1)/201(1A) r.w.s 144 of the Act dated 22.03.2022, the assessee was treated as an assessee-in-default and directed to pay Rs. 55,000/- [u/s. 201] plus interest of Rs. 40,575/-
[u/s. 201(1A)].
3.2 Aggrieved the assessee preferred an appeal before ld. CIT(A). Since no compliance was made to the three notices issued by ld. CIT(A), the appeal was dismissed ex-parte. The assessee has now filed an appeal before the Tribunal.
Before us, Ld. AR has submitted that although the assessee had not deducted the tax at source, but the vendor had given assurance to him to reflect the same in his income tax return and pay the taxes as he was regularly assessed to tax under PAN ADMPD2853L. In this regard, ld. AR has referred to the provisions of section 201 wherein the assessee is not to be treated in default, if the seller has paid the tax due on the impugned transaction. Relevant provisions of the section are as under:
Consequences of failure to deduct or pay. Section 201 (1)Where any person, including the principal officer of a company,— (a)who is required to deduct any sum in accordance with the provisions of this Act; or (b)referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a payee or on the sum credited to the account of a payee shall not be deemed to be an assessee in default in respect of such tax if such payee— (i)has furnished his return of income under section 139; (ii)has taken into account such sum for computing income in such return of income; and (iii)has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed: Provided further that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.
We have heard the rival submissions and perused the material available on record as well as the relevant provisions of the Act. Ld. AR has submitted that assurance was given by the seller to the assessee that he would file his return declaring the impugned transaction. However, no documentary evidence in support of the claim has been furnished to demonstrate that the conditions laid down in the first proviso to section 201(1) have been satisfied. Accordingly, in the interest of justice, we hereby, restore the matter to the ld. AO for considering the assessee’s claim as per the relevant provisions and allow the same after due verification regarding prescribed conditions. The assessee is also directed to submit requisite documentary evidences in support of his claim before the ld. AO.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order Pronounced in Open Court on 28.10.2025