ARJANBHAI NANUBHAI PATEL,AHMEDABAD V. INCOME TAX OFFICER - WARD -2 TDS , AHMEDABAD

ITA 483/AHD/2024

AI Insights

The case involves Arjanbhai Nanubhai Patel, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed a penalty for the late filing of TDS Form 26QB and late deposit of TDS on the purchase of agricultural land. The assessee argued that the land purchased was agricultural and outside the purview of section 194IA of the Income Tax Act, 1961, and that TDS should not have been deducted. However, the Tribunal noted that the TDS was deducted and the payment was made late, leading to the imposition of a penalty under section 234E. The Tribunal dismissed the appeal, agreeing with the CIT(A) that the assessee did not establish the agricultural status of the land through documents and failed to comply with the statutory time frame for TDS deposit and filing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35046 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Other Referred Cases: Chimanlal Kathiriya vs. ACIT-CPC- (TDS)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NITIN VISHNU KULKARNI
• Keywords: TDS
• Section: 234E; 200A; 22

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER Arjanbhai Nanubhai Patel, 75/76, Krishna Nagar Society, India Colony Road, Bapunagar Ahmedabad-380024 PAN: ACPPP8365E (Appellant) Vs ITO, Ward-2, TDS, Ahmedabad Ahmedabad-1 (Respondent) Assessee by: Shri Manish Bhagat, A.R. Revenue by: Shri Nitin Vishnu Kulkarni, Sr. D.R. Date of hearing : 11-12-2024 Date of pronouncement : 07-01-2025 आदेश/ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:- This is an appeal filed against the order dated 19-01- 2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2022-23. 2. The grounds of appeal are as under:- ITA No. 483/Ahd/2024 Assessment Year 2022-23 I.T.A No. 483/Ahd/2024 A.Y. 2022-23 Page No. Arjanbhai Nanubhai Patel vs. ITO 2 “Being aggrieved and dissatisfied with the order passed by the learned NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI, the petitioner presents the appeal against the same on the following amongst other grounds: 1. The Learned NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI has erred in confirming penalty u/s 234E of for late fling of TDS form No, 26QB without fact of the case since we had purchased the Agriculture Land which is out side the purview of provision of section 1941A of the Income tax Act, 1961 2. The Learned NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI has erred in not considering the fact that Land Purchase documents in which clearly mentioned that the subject Land is Agriculture land and abstract of form 7 and 8A for proof of agriculture land also attached with the Land purchase documents 3. However We had deducted TDS voluntarily and property was agriculture land and therefore penalty u/s 234E required to be deleted.” 3. The assessee purchased the Agricultural land for Rs. 56,18,598/- from Abdulrehman Mohmadbhai Momin and voluntarily deducted TDS @ 1% which was Rs. 56,186/-. Since the property was agricultural land the assessee deposited TDS late and also filed Form 26QB late. The CPC-TDS- Ghaziabad had processed the return of TDS and imposed the Late filing fee of Rs. 12,400/- u/s. 234E of the Income Tax Act, 1961, vide order dated 08- 03-2022 in respect of delay in filing of Form 26QB for Financial Year 2021- 22 i.e. Assessment Year 2022-23. 4. Being aggrieved by the said order u/s. 200A of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. I.T.A No. 483/Ahd/2024 A.Y. 2022-23 Page No. Arjanbhai Nanubhai Patel vs. ITO 3 5. The ld. A.R. submitted that the assessee has purchased the agricultural land and paid amount of Rs. 56,18,598/- thereby voluntarily deducting TDS @ 1% amounting to Rs. 56186/- u/s 194IA of the Act. The Ld. AR submitted that the land was purchased jointly for Rs. 1,40,46,475/- and he paid Rs. 56,18,598/- for 40% share in land. The ld. A.R. submitted that as per the law, the TDS should not have been deducted as the land is that of agricultural land. The ld. A.R. relied upon the decision of the Tribunal in case of Chimanlal Kathiriya vs. ACIT-CPC- (TDS), ITA No. 388/Ahd/2024, A.Y. 2022-23 order dated 01-10-2024. 6. The ld. D.R. submitted that once the TDS had been deducted, the assessee was supposed to deposit the TDS amount within the time frame given by the statute of Income Tax, but the assessee failed to deposit the TDS within time as well as not filed Form 26QB within the stipulated/statutory period. Thus, there was failure on part of the assessee and the order passed u/s. 200A was correct. 7. We have heard both the parties and perused all the relevant materials available on record. It is a matter of fact that the assessee purchased agricultural land for Rs. 56,18,598/-. The assessee voluntarily deducted TDS which was Rs. 56,186/- but the TDS was deposited late and Form 26QB was also filed belated. The observation of the CIT(A) that as per the schedule of payment available in the agreement, the total payments made by the assessee is Rs. 55,62,404/- and there was further payment of Rs. 1,40,465/- without any individual identification of the payer. In the assessee’s case the purchase consideration paid individually by him is more than 50 lakh, the total stamp I.T.A No. 483/Ahd/2024 A.Y. 2022-23 Page No. Arjanbhai Nanubhai Patel vs. ITO 4 duty valuation of the property is Rs. 1,41,46,475/- which is more than 50 lacs. Thus, the CIT(A) held that the assessee cannot claim exemption under sub-section 2 of Section 194IA of the Income Tax Act, 1961. Besides this the CIT(A) further held that the plea of the assessee that the said land is agricultural land has not been established through documents by the assessee before the CIT(A). But the fact remains that the assessee deducted the TDS at the time of paying consideration and not deposited the TDS within the statutory time which denied the credit to deductor for his tax purpose. The decision of the Tribunal in case of Chimanlal Kathiriya (supra), it is not applicable in the present case as in the said case the TDS was deposited within time, only Form 26QB was filed late. But in the present assessee’s case the TDS was deposited belated as well as Form 26QB. The purpose of depositing the TDS within the stipulated/statutory time is to allow the credit to the other party i.e. deductee, once it is deducted by the deductor. But in the present case the deductee could not avail the same. Thus, CPC-TDS has rightly imposed the penalty u. 234E of the Act. The appeal of the assessee is dismissed. 8. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 07-01-2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 07/01/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- I.T.A No. 483/Ahd/2024 A.Y. 2022-23 Page No. Arjanbhai Nanubhai Patel vs. ITO 5 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "