LAKSHMI SIRISHA GARLAPATI,HYDERABAD vs. ADIT(INT TAXN)-1, HYDERABAD

ITA 2388/HYD/2025Status: DisposedITAT Hyderabad23 October 2026AY 2016-173 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee. The core of the decision rested on the timing of the payments made by the assessee. The assessee had submitted that the impugned demand by the Assessing Officer was raised in respect of four installments of payment made in Financial Year 2007-08. Crucially, the assessee highlighted that Section 194-IA of the Income Tax Act, 1961, which mandates TDS on the purchase of property, was inserted by the Finance Act, 2013, and became effective from April 1, 2013. Since the payments in question were made in FY 2007-08, which was prior to the introduction of Section 194-IA, there was no legal obligation on the assessee to deduct TDS at that point. Consequently, the assessee could not be held liable as an 'assessee in default' for non-deduction of TDS. The Tribunal found merit in this submission and set aside the order of the Assessing Officer.

What were the facts?

The assessee, Lakshmi Sirisha Garlapati, filed an appeal against the order of the Commissioner of Income Tax (Appeals)-10, Hyderabad, for Assessment Year 2016-17. The appeal challenged the demand raised by the Assessing Officer (AO) under sections 201(1) and 201(1A) of the Income Tax Act, 1961. The AO held the assessee as an 'assessee in default' for failing to deduct Tax Deducted at Source (TDS) on the purchase of property, in alleged violation of section 194-IA. The assessee's counsel pointed out that the AO's demand pertained to four installments of payment made in Financial Year 2007-08. At that time, section 194-IA, which mandates TDS on property purchase, had not yet been introduced. This section was inserted by the Finance Act, 2013, effective from April 1, 2013.

What were the issues?

1. Whether the assessee can be held as an 'assessee in default' under sections 201(1) and 201(1A) for non-deduction of TDS on property purchase, in violation of section 194-IA, when the payments were made prior to the insertion of the said section? Assessee's Contention: The assessee argued that the payments for which the demand was raised were made in FY 2007-08. At that time, there was no provision for TDS deduction on property purchases. Section 194-IA was inserted by the Finance Act, 2013, with effect from 01/04/2013. Therefore, since the payments predated the relevant legal provision, the assessee cannot be deemed an 'assessee in default'. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(1A),Section 194-IA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SANJAY GARG & SHRI MADHUSUDAN SAWDIA

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-10, Hyderabad (hereinafter referred to as “Ld. CIT(A)”), dated 22/10/2025 for the Assessment Year (AY) 2016-17. ITA 2388/HYD/2025 LAKSHMI SIRISHA GARLAPATI

2.

The assessee in this appeal has been aggrieved by the action of the Ld. CIT(A) in confirming the dem

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 201(1)

All 3,835 judgments and leading authorities on Section 201(1) →

Recent GST High Court judgments

Search GST case law →