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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’: NEW DELHI
Before: SHRI SAKTIJIT DEY & SHRI N.K. BILLAIYA
appeals by five different assessees preferred against the order of the CIT(A)-43, New Delhi, dated 21.05.2019 pertaining to A.Y. 2015-16 .- 1135/Del/2020 and 4 other appeals. Ajay Dudeja. 2. Since the underlying facts in the grievance are identical in the captioned appeals, these were heard together and are disposed of by this common order for the sake of convenience and brevity.
Facts on records shows that the captioned assessees were co-owners of an immovable property being Plot No.-25, Sector 21C, Urban Estate, Faridabad having 1/5th share each.
3.1 The said property was purchased by them vide sale deed No.- 10619 dated 27.10.2014 from Mr. Hardeep Singh, tax @ 1% was deducted at source from the consideration paid to Mr. Hardeep Singh.
3.2 When Mr. Hardeep Singh, filed his return of income, he mentioned his status as NRI which triggered the impugned proceedings as the AO was of the firm belief that the purchasers ought to have deducted tax at source @ 20% as per the relevant provision of the Act. Since tax was deducted at source @ 1% , impugned proceedings were initiated against the captioned assessee and the AO concluded the proceedings by charging interest under Section 201 and 201(1A) of the Act from the date on which such tax was deductible till the date of such tax was deducted and levied interest of Rs. 1,27,400/- on each of the captioned assessee. .- 1135/Del/2020 and 4 other appeals. Ajay Dudeja.
The order of the AO was challenged before the CIT(A) and the CIT(A) by way of separate appellate orders confirmed the charging of interest. Before us, the Counsel for the assessee furnished the tax details of Mr. Hardeep Singh and pointed out that Hardeep Singh has offered the capital gains on the sale such property and has paid taxes thereon.
Therefore, there is no loss to the Revenue. The DR strongly supported the order of the CIT(A) stating that charging of interest is mandatory and is automatic.
We have given a thoughtful consideration to the orders of the authorities below. When the captioned assessee purchased the impugned property from Mr. Hardeep Singh, they were unaware of the fact that the Mr. Hardeep Singh was an NRI nor this fact was disclosed by the seller.
The purchasers under the bonafide belief and in good faith deducted tax at source @ 1% which was the applicable rate on such transaction.
Therefore, it cannot be said that the purchasers wilfully deducted tax at a lower rate.
It is only when Mr. Hardeep Singh filed his return of income; the AO as well as the captioned assessees came to know that Mr. Hardeep Singh .- 1135/Del/2020 and 4 other appeals. Ajay Dudeja. was an NRI. Since the transaction was concluded earlier, therefore, the purchasers could not do anything.
Considering the peculiar facts of the case, we are of the considered view, that the impugned purchasers i.e. the five captioned assessee could not be considered as assessee in default and therefore in our considered view on the given facts of the case interest under provision of Section 201(1) & 201(1A) of the Act are not applicable. We therefore, direct the AO to delete the interest charged in the hands of the captioned assessees.
All the appeals are accordingly allowed.
In the result, appeals are allowed.
Order pronounced in the Open Court on 6.10.2023