JAGADISH PANCHAL,UDAIPUR vs. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), UDAIPUR

ITA 314/JODH/2024Status: DisposedITAT Jodhpur29 September 2026AY 2016-176 pages
AI SummaryAllowed

What were the facts?

The assessee, Jagadish Panchal, filed an appeal against the order dated 31.03.2023 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, which confirmed a penalty levied under Section 271C of the Income Tax Act, 1961, for Assessment Year 2016-17. The assessee, along with his wife, purchased an immovable property for Rs. 2,25,00,000/-. The assessee failed to deduct tax at source (TDS) of Rs. 1,12,500/- under Section 194IA of the Act. The Assessing Officer (AO) initiated penalty proceedings and imposed a penalty of Rs. 1,12,500/-. The CIT(A) confirmed this penalty. There was a delay of 329 days in filing the appeal, which was condoned by the Tribunal due to the assessee being a non-resident and out of India for business purposes.

What did the Tribunal hold?

The Tribunal held that the penalty imposed under Section 271C of the Income Tax Act, 1961, is liable to be deleted. The reasoning was based on the appellate order passed in the case of the assessee's wife, who was a co-owner of the same property. In that case, the CIT(A) had deleted the penalty by observing that the seller had duly disclosed the entire sale consideration in their Income Tax Return (ITR), claimed deductions under Section 54, and paid the due taxes. Furthermore, a Form 26A certificate from a Chartered Accountant was provided, confirming the seller's compliance. The Tribunal noted that the facts in the present case were identical, except for the assessee being the other co-owner. Therefore, following the precedent set in the wife's case, the penalty was deleted. The Tribunal also noted that the assessee had paid the interest due under Section 201/201(1A) of the Act. The appeal was allowed, and the penalty was deleted.

What were the issues?

1. Whether the penalty imposed under Section 271C of the Income Tax Act, 1961, is liable to be quashed, considering that the seller of the property declared the capital gains and paid due taxes, and no prejudice was caused to the Revenue? (Question of law and fact, concerning Section 271C r.w.s. 274). Assessee's contention: Ignorance of law is not an excuse, but there is no presumption that every individual knows all laws. The seller disclosed capital gains and paid taxes, thus no prejudice to the Revenue. The penalty is illegal and against facts. Revenue's contention: The revenue supported the orders passed by the lower authorities (no specific arguments recorded beyond this general support).

Which sections of the Income-tax Act were involved?

Section 271C,Section 194IA,Section 274,Section 201,Section 201(1A),Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB”, BENCH, JODHPUR

Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar

Per T.R. Senthil Kumar, Judicial Member:

This appeal is filed by the assessee as against the order dated 31.03.2023 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi (hereinafter referred to as “Ld. CIT(A)”), arising out of the confirmation of penalty levied under Section 271C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relating to the Assessment Year 2016-17. P a g e | 2 Jagadish Panchal

2.

The Registry has noted that there is a delay of 329 days in filing the above appeal. The assessee by way of a notarized affidavit stated that, he is a non-resident

The order continues below.

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