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Facts
The appeal was preferred by the assessee against an order of the National Faceless Appeal Centre (NFAC) concerning TDS on a deductee's PAN which was not linked with Aadhaar due to technical glitches, causing a bona fide delay. A demand was raised under section 200A of the Income Tax Act, which was sustained by the Ld. CIT(A).
Held
The Tribunal noted that Circular No. 6/2024 clarified that for PANs linked with Aadhaar by 31.05.2024, there would be no liability on the deductor/collector for transactions beyond 31.03.2024. The Ld. CIT(A) had wrongly denied the assessee's reliance on Circular No. 3 of 2023.
Key Issues
Whether the demand raised under section 200A for TDS is valid when the deductee's PAN was not linked with Aadhaar due to technical glitches, and if Circular No. 6/2024 and Circular No. 3 of 2023 provide relief in such cases.
Sections Cited
200A, 206AA, 206CC, 114AAA, XVII-BB
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Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
Date of Hearing 27.01.2026 Date of Pronouncement 30.01.2026 O R D E R PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 03.04.2025 of the National Faceless Appeal Centre (NFAC) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN &
P a g e | Parul Sharma (AY: 2025-26) Order No: ITBA/NFAC/S/250/2025-26/1075454369(1) arising out of the order dated 09.06.2024 u/s 200A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY: 2025-26.
On hearing both the sides, we find that the issue primarily involved in the appeal is that the TDS on the PAN of deductee has been deposited but as the Aadhaar of the deductee was not linked with the PAN, which assessee claim was due to some technical glitches and there was a bona fide delay the demand has been raised in vide intimation u/s 200A, taking adverse view against the assessee which has been sustained by the Ld. CIT(A).
At the time of hearing, ld. Counsel has relied Circular No. 6/2024 dated 23rd April 2024, wherein the earlier Circular No.3 of 2023 dated 28.03.2023 regarding consequences of PAN becoming inoperative as per Rule 114AAA of the Income Tax Rules 1962 has been examined by the Board and the Board has specified that the consequences mentioned in Circular No.3 of 2023 shall be applicable for transactions entered beyond 31.03.2024 and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31.05.2024, there shall be no liability on the deductor/collector to deduct/collect the tax u/s 206AA/206CC, as the case may be, and the P a g e | Parul Sharma (AY: 2025-26) deduction/collection as mandated in other provisions of Chapter XVII-BB of the Act shall be applicable. We find that Ld. CIT(A) has non-suited the assessee reliance on Circular No.3 of 2023 dated 28.03.2023.
In the light of the aforesaid discussion, we are inclined to sustain the grounds. The impugned orders are set aside, Assessing Officer directed to give assessee the extended benefit of the Circular of CBDT dated 23.04.2024 and pass an order afresh.
Order pronounced in the open court on 30.01.2026