Section 194IA of the Income Tax Act
Income-tax Act, 2025: s.393
Section 194IA of the Income-tax Act, 1961 corresponds to section 393 (Tax to be deducted at source) of the Income-tax Act, 2025.
Read section 393 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 194IA is Dundlod Shikshan Sansthan v. Union of India (63 Taxmann.com 243), cited in 397 of the 147 judgments on BharatTax that turn on this section.
Leading authorities on Section 194IA
The imposition of fees for late filing of TDS/TCS returns prior to the Finance Act, 2015 amendments was not illegal, and the Rajasthan High Court found no justification to interfere with such compensatory fees.
The Madras High Court has upheld the validity of the levy of fees under Section 234E and penalties under Section 271H, finding the charging provision to be Section 234E, with the power to levy existing from 01/07/2012.
The rule of consistency does not override the correct application of law and should not be applied if it leads to an anomalous outcome.
Fee under section 234E cannot be charged for the period prior to 01.06.2015, as the power to charge such fee was vested with the prescribed authority only upon substitution of clause (c) to section 200A by the Finance Act, 2015, effective from that date.
Receipt of a non-compete fee, even if it does not alter the assessee's business structure, impairs the carrying on of their activity, constituting a loss of a source of income.
Section 234E of the Income Tax Act, 1961, which levies a fee for delayed filing of TDS statements, is intra vires the Constitution. However, this fee cannot be levied for statements filed prior to June 1, 2015.
The case is cited for its relevance to provisions concerning Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), particularly in relation to amendments introduced by the Finance Bill, 2012, including Section 234E.
The case is cited for the proposition that orders imposing late fees under Section 234E and demand notices under Section 200A are to be considered in light of the prevailing legal position, particularly when the period under consideration includes dates prior to June 1, 2015.
Expenditure incurred by an assessee to discharge a mortgage created by a previous owner is an allowable deduction in computing capital gains, as it represents the cost of acquisition or perfecting an imperfect title. The assessee's payment to clear the encumbrance is not deductible for capital gains computation.
