SUBRAMANIAN ARAVIND,TUTICORIN vs. WARD 1, TUTICORIN, TUTICORIN

ITA 297/CHNY/2026Status: DisposedITAT Chennai28 September 2026AY 2018-20195 pages
AI SummaryRemanded

What were the facts?

The assessee, Subramanian Aravind, purchased two properties on April 17, 2017, and June 18, 2017, for Rs. 52 lakhs and Rs. 20 lakhs respectively from a non-resident seller. The assessee failed to deduct Tax Deducted at Source (TDS) at the applicable rate of 20% plus education cess, deducting only Rs. 52,000 (1% on Rs. 52 lakhs). This resulted in a shortfall of TDS amounting to Rs. 14,45,600. An order under section 201(1A) was passed determining this shortfall. The assessee appealed to the Ld. Addl. / JCIT (A)-1, Gurugram, who dismissed the appeal. The assessee has now filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chennai.

What did the Tribunal hold?

The Tribunal allowed the assessee's petition to admit additional evidence under Rule 29 of the ITAT Rules, 1963. This evidence included Form No. 26A (Certificate from Accountant under the first proviso to section 201(1)) and the Income Tax Return of the seller for AY 2018-19. The Tribunal noted that while technically the assessee was at fault, the first proviso to section 201(1) allows for non-default status if the payee has furnished their return, accounted for the sum, and paid the tax due, supported by an accountant's certificate. The Tribunal found this evidence essential for a fair decision. Consequently, the matter was restored to the file of the Assessing Officer (AO) for reconsideration in light of the admitted Form No. 26A. The assessee was directed to produce the Form No. 26A and relevant documents before the AO without fail. The grounds raised by the assessee were allowed for statistical purposes.

What were the issues?

1. Whether the Ld. Appellate Authority erred in dismissing the appeal without considering the grounds raised, contrary to law, facts, and evidence? 2. Whether the assessee acted in conscious disregard of their obligation, given that the sale deed did not mention the buyer as non-resident, and the assessee should not be penalized for the buyer's mistake? 3. Whether the Appellate Authority adopted a pedantic approach instead of a justice-oriented approach, especially when the matter is revenue neutral and the assessee should not suffer on technicalities? 4. Whether the Appellate Authority erred in holding that the rulings cited by the assessee were not applicable, despite the ratio decidendi being binding? Assessee's contentions: The assessee argued that the dismissal of the appeal by the lower appellate authority was erroneous. They contended that they did not act with conscious disregard and should not be penalized for the buyer's error. The assessee urged for a justice-oriented approach, emphasizing that the matter was revenue neutral and no loss was caused to the exchequer. They also argued that the precedents cited, though related to sections 194C/194J, were applicable to the facts of the case. Revenue's contentions: The judgment does not record specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 201,Section 201(1),Section 201(1A),Section 195,Section 139,Section 221,Section 194C,Section 194J

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K & SHRI GAGAN GOYAL

Hearing: 27.08.2026Pronounced: 28.09.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Addl. / JCIT (A)-1, (hereinafter referred as the ‘Ld. Addl. / JCIT (A)’), Gurugram dated 12.11.2025 for the Assessment Year (hereinafter referred as the ‘AY’) 2018-19. GROUDS OF APPEAL

1.

The order of the Learned Appellate Authority dismissing the Appeal without considering grounds raised before it is contrary to law, facts of the case and

The order continues below.

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