ABHIJEET CHEEMA vs. INCOME TAX OFFICER WARD 70(1) DELHI & ORS.

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W.P.(C)/2301/2025HC DelhiDLHC01008749202524 August 2026Bench: HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court directed the petitioner to make a representation before the AO/CPC within four weeks, along with a copy of CBDT Circular no. 9/2025 dated 21.07.2025. The concerned officer is to consider this representation in accordance with the law, including the aforementioned circular, and pass a speaking order within eight weeks of receiving the representation, communicating the decision to the petitioner. The court also stated that if the petitioner is aggrieved by this decision, they are free to pursue their legal remedies. Until the representation is disposed of, no coercive action will be taken for the recovery of the demand raised by the orders dated 19.12.2024 and 17.01.2025. The court did not decide the merits of the dispute but provided a procedural path for resolution.

What were the facts?

The petitioner, Abhijeet Cheema, challenged demands raised by the Assessing Officer (AO)/CPC for the difference in tax payable under Section 200A of the Income Tax Act, 1961. The petitioner had deducted tax at 1% under Section 194-IA, but the AO contended it should have been 20% because the payee's Permanent Account Number (PAN) was not linked with Aadhaar. The demands were raised via orders dated 19.12.2024 and 17.01.2025, issued under Section 154 of the Act. Subsequently, the Central Board of Direct Taxes (CBDT) issued Circular no. 9/2025 on 21.07.2025, stating that demands would be dropped if the seller's/payee's Aadhaar was linked subsequently.

What were the issues?

1. Whether the demand raised by the AO/CPC for the difference in tax deducted under Section 194-IA is illegal and contrary to the provisions of the Income Tax Act, 1961, given that the petitioner deducted tax at 1% while the respondents insisted on 20% due to the payee's PAN not being linked with Aadhaar? Assessee's Contention: The petitioner argued that tax was correctly deducted at 1% as per Section 194-IA. They also highlighted CBDT Circular no. 9/2025 dated 21.07.2025, which stipulates that demands raised against assessees shall be dropped if the seller's/payee's Aadhaar is linked subsequently. Revenue's Contention: The revenue contended that since the payee's PAN was not linked with Aadhaar, the petitioner was obligated to deduct tax at the higher rate of 20%, and therefore, the demand was rightly raised.

Which sections of the Income-tax Act were involved?

Section 200A,Section 194-IA,Section 154

AI-generated summary — verify with the full judgment below

$~9 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010087492025 + W.P.(C) 2301/2025, CM APPL. 10916/2025 & CM APPL. 10917/2025 ABHIJEET CHEEMA .....Petitioner Through: Mr. Ved Jain and Mr. Nischay Kantoor, Advs. versus INCOME TAX OFFICER WARD 70(1) DELHI & ORS. .....Respondents Through: Mr. Siddhartha Sinha, SSC and Ms. Easha Gurung, JSC. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA O R D E R % 24.08.2026 1. By way of present writ petition, the petitioner has challenged the action of the Assessing Officer (AO)/CPC, who has raised a demand against the petitioner for difference of the amount which according to him was payable by the petitioner under Section 200A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’). 2. Mr. Nischay Kantoor, learned counsel for the petitioner argued that the demand raised vide orders dated 19.12.2024 and 17.01.2025 (under Section 154 of the Act of 1961) are illegal and contrary to the provisions of the Act of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:51:00

1961, as the petitioner-assessee had correctly deducted tax at the rate of 1% as per provisions of under Section 194-IA of the Act of 1961, whereas the respondents have taken a stance that it should have been 20%, because payee’s Permanent Account Number (PAN) was not linked with Aadhaar. 3. Mr. Siddhartha Sinha, learned Senior Standing Counsel for the Department, on the other hand, submitted that since payee’s PAN was not linked with the Aadhaar, the petitioner was supposed to deduct tax at higher rate, i.e. 20%, and, therefore, the demand has been rightly raised. 4. Mr. Nischay Kantoor, learned counsel for the petitioner, in rejoinder, pointed out that after filing of the present petition, the Central Board of Direct Tax (CBDT) has issued a Circular no. 9/2025 dated 21.07.2025, wherein it has been stipulated that in case the Aadhaar of the seller/payee is linked subsequently, then also, in such cases, the demands raised against the concerned assessee shall be dropped. 5. We have heard rival counsel and perused the Circular dated 21.07.2025. 6. The petitioner is directed to make a representation before the AO/CPC, alongwith a copy of the Circular dated 21.07.2025, within a period of four weeks from today. The concerned Officer shall consider petitioner’s representation in accordance with law, including the CBDT Circular no. 9/2025, and pass a speaking order within a period of eight weeks of receipt of the representation and communicate such decision to the petitioner. 7. In case, the petitioner is aggrieved by such decision, he shall be free to avail his legal remedies in accordance with law. 8. Until the petitioner’s representation is disposed of, no coercive action shall be taken for recovery of the demand raised vide orders dated 19.12.2024 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:51:00

and 17.01.2025. DINESH MEHTA, J. RAJNEESH KUMAR GUPTA, J. AUGUST 24, 2026/sds This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:51:00

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