MRS . BELA ROHIT SHAH ,MUMBAI vs. ITO WARD 19(1)(1), MUMBAI

ITA 409/MUM/2026Status: DisposedITAT Mumbai15 May 2026AY 2025-267 pages
AI SummaryAllowed

What were the facts?

The assessee, Mrs. Bela Rohit Shah, jointly purchased a residential flat for Rs. 1,90,00,000/-. Her share of consideration was Rs. 28,50,000/-, representing 15% ownership. The transaction occurred on 09.12.2024. The assessee deducted TDS of Rs. 28,500/- on her share and deposited it via Form 26QB on 31.03.2025. Subsequently, an intimation under section 200A of the Income Tax Act, 1961, was issued on 02.04.2025, raising a demand of Rs. 5,82,290/- for alleged short deduction of TDS, interest, and late filing levy. This demand was based on the seller's PAN being allegedly inoperative, necessitating a higher TDS rate under section 206AA. The assessee appealed this demand to the CIT(A), who sustained it. The present appeal is against the CIT(A)'s order dated 04.12.2025.

What did the Tribunal hold?

The Tribunal held that the demand raised under section 200A was unsustainable and directed its deletion. The primary reason was that the sole basis for the demand, the alleged inoperative PAN of the seller, was rendered invalid by subsequent events. The seller had linked his Aadhaar with his PAN, and this regularization was completed within the timeline stipulated by CBDT Circular No. 9/2025. This circular specifically clarifies that the higher TDS rate under section 206AA shall not apply if the PAN is made operative by Aadhaar linkage on or before 30.09.2025 for transactions undertaken between 01.04.2024 and 31.07.2025. Since the transaction fell within this period and the PAN was subsequently regularized, the foundation for invoking section 206AA ceased to exist. Furthermore, the Tribunal noted that the seller had filed his return of income and paid taxes on the capital gains, meaning the assessee could not be treated as an assessee-in-default under the proviso to section 201(1). The Tribunal also considered the identical facts in the case of the assessee's husband, where a similar demand was deleted by the CIT(A), reinforcing the decision. The CIT(A) was found to have erred in sustaining the demand despite the evidence presented.

What were the issues?

1. Whether the demand raised under section 200A for alleged short deduction of TDS, interest, and levy is sustainable when the seller's PAN was subsequently regularized by linking with Aadhaar within the timeline prescribed by CBDT Circular No. 9/2025, thereby making section 206AA inapplicable? Assessee's contentions: - The seller, Shri Jaydev Harish Raja, was an Indian resident for more than 182 days in the relevant financial year, had obtained Aadhaar, and linked it with his PAN. - The seller's PAN was valid and operative at the time of the transaction, and the Departmental portal accepted it during Form 26QB processing. - The assessee complied with TDS provisions and paid interest and late filing levies. - The demand under section 200A is based on an erroneous assumption that section 206AA was automatically attracted due to an allegedly inoperative PAN. - CBDT Circular No. 9/2025 provides relief for transactions between 01.04.2024 and 31.07.2025 where PAN is made operative by Aadhaar linkage on or before 30.09.2025, and the assessee's case falls within this beneficial clarification. - The seller filed his return of income and paid taxes on capital gains, thus the assessee cannot be treated as an assessee-in-default under the proviso to section 201(1). - In an identical case of the assessee's husband, the CIT(A) had deleted a similar demand. Revenue's contentions: - The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 200A,Section 194IA,Section 206AA,Section 201(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH

Before: SHRI AMIT SHUKLA & SHRI PRABHASH SHANKAR

Pronounced: 15/05/2026

PER AMIT SHUKLA (J.M):

The aforesaid appeal has been filed by the assessee against the order dated 04.12.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising out of intimation issued under section 200A of the Income Tax Act, 1961 for the Assessment Mrs. Bela Rohit Shah

Year 2025-26, whereby demand on account of alleged short

deduction of TDS, interest and levy has been sustained.

2.

Briefly stated, the facts borne out from the record are that the assessee, Mrs. Bela Rohit Shah, had jointly purchased a residential flat being Flat No.14, lst Floor, Dev Chhaya, Tardeo, Haji Ali, Mumbai jointly with her husband Shri Rohit Jaykumar Shah fr

The order continues below.

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