CHIMANLAL KATHIRIYA,AHMEDABAD V. ACIT - CPC - TDS WARD , AHMEDABAD

ITA 388/AHD/2024

AI Insights

The case involves Chimanlal Kathiriya, the appellant, who appealed against the penalty imposed by the ACIT - CPC-TDS Ward, Ahmedabad, for the late filing of TDS Form 26QB related to the purchase of agricultural land. The assessee argued that the land purchase was below the threshold requiring TDS deduction and that the property was agricultural land, which is outside the purview of Section 194IA of the Income Tax Act, 1961. The Tribunal examined whether the penalty under Section 234E was applicable given the circumstances of the TDS deduction and the timing of the relevant legal provisions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473680 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-09-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 01-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. J. VYAS
• Assessee Lawyers: MANISH BHAGAT
• Keywords: Sale consideration of property below Jantri Value; TDS
• Section: 234E

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 388/Ahd/2024 (िनधाŊरण वषŊ / Assessment Year : 2022-23) Chimanlal Kathiriya 201, Panchdeep Complex, Mithakhali Six Road, Navrangpura, Ahmedabad, Gujarat, 380009 बनाम/ Vs. ACIT – CPC- TDS Ward Ahmedabad ̾थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ABOPK8845J (Appellant) .. (Respondent) अपीलाथŎ ओर से /Appellant by : Shri Manish Bhagat, A.R. ŮȑथŎ की ओर से/Respondent by : Shri N. J. Vyas, Sr. DR Date of Hearing 12/09/2024 Date of Pronouncement 01/10/2024 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 28.12.2023 for the Assessment Year 2022-23. 2. There was delay of 3 days in filing of this appeal. The assessee has filed an affidavit explaining that in the original Form No.36 the name and designation of the respondent was incorrectly mentioned, which was subsequently rectified and the revised Form No.36 was filed. This had led to delay of 3 days in ITA No. 388/Ahd/2024 [Chimanlal Kathiriya vs. ACIT] A.Y. 2022-23 - 2 – filing of the appeal. Considering the reason as explained, the delay in filing of the appeal is condoned. 3. This appeal is directed against the penalty of Rs.15,150/- imposed under Section 234E of the Income Tax Act, 1961 (in short ‘the Act’) for late filing of TDS Form 26QB. The appeal against this penalty order was decided by the Ld. CIT(A) vide the impugned order the appeal of the assessee was dismissed. 4. Now, the assessee is in appeal before us and has taken following grounds in this appeal: “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 outside the purview of provision of section 1941A of the Income tax Act. 1961 As per provision of the Income tax Act, 1961 there was no our statutory liability to deduct TDS on Rs. 28.09 Lacs since we had payment made to three sellers below Rs. 50.00 Lacs. 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.” 5. Shri Manish Bhagat, Ld. AR appearing for the assessee explained that the assesse had purchased an agricultural land with other co-owners and paid an amount of Rs.28,09,293/- towards acquisition of this property. The assessee had also deducted TDS of Rs.28,094/- u/s. 194IA of the Act, which was deposited within ITA No. 388/Ahd/2024 [Chimanlal Kathiriya vs. ACIT] A.Y. 2022-23 - 3 – the due date. However, there was slight delay in filing of TDS return in Form No.26QB, for which the penalty of Rs.15,150/- was imposed by the CPC-TDS while processing the TDS return. The Ld. AR explained that the consideration paid by the assessee was below Rs.50 Lakhs and, therefore, he was not liable to deduct any TDS. In spite of this fact, the assessee had deducted the TDS and also deposited the same to the Government account within time. The delay in filing the TDS return was unintentional as the assessee was not aware of the provisions. Considering the fact that assessee was not liable to deduct any TDS, the Ld. AR requested that the penalty for late filing of TDS return may kindly be condoned. 6. Per contra, Shri N. J. Vyas, Ld. Sr. DR supported the order of the lower authorities. 7. We have carefully considered the rival submissions. The undisputed facts of the case are that the assessee had paid an amount of Rs.28,09,293/- towards purchase of agricultural land on which TDS of Rs.28,094/- was deducted and deposited to the Government account. The Ld. CIT(A) has given a finding that through the purchase consideration paid by the assessee was less than Rs.50 Lakhs, the stamp duty valuation of the property was Rs.1,41,46,475/-, which was more than 50 Lakhs and, therefore, the assessee could not have claimed exemption u/s.194IA(2) of the Act. This observation of the Ld. CIT(A) is not found to be correct. The deduction of TDS u/s.194IA of the Act at the ITA No. 388/Ahd/2024 [Chimanlal Kathiriya vs. ACIT] A.Y. 2022-23 - 4 – relevant point of time, when the transaction was made by the assessee, was required to be made on the amount of payment as made by the assessee. The provision for TDS u/s.194IA of the Act on the stamp duty value of the property was introduced w.e.f. 01.04.2022 i.e. after transaction was already completed by the assessee. Under the circumstances, it is found that the assessee was not liable to deduct any TDS u/s.194IA of the Act. And when the assessee was not liable to deduct the TDS under the provision of the Act, no penalty u/s.271E of the Act can be imposed for late filing of TDS return. Therefore, the penalty of Rs.15,150/- as imposed u/s.234E of the Act is cancelled. 8. In the result, the appeal of the assessee is allowed. This Order pronounced on 01/10/2024 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 01/10/2024 S. K. SINHA "