Bhikhabhai Hirabhai Patel, Ahmedabad V. DCIT, CPC, TDS, Ghaziabad

ITA 1680/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7380 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-01-2020
• Assessment Year: misc
• Appeal Filed On: 18-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UMESH KUMAR AGARWAL
• Assessee Lawyers: S V AGRAWAL
• Keywords: TDS
• Section: 201(1); 234E; 200A

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 1680/AHD/2018 ( ASSESSMENT YEAR : 2014-15) BHIKHABHAI HIRABHAI PATEL 68, 69, PRERNA PARK, NR. JAHALAWADI PATEL SOCIETY, AHMEDABAD - 380008 / VS. DEPUTY COMMISSIONER OF INCOME TAX CPC, TDS, GHAZIABAD - 201010 ./ ./ PAN/GIR NO. : AMQPP5792C ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. V. AGRAWAL, A.R. / RESPONDENT BY : SHRI UMESH KUMAR AGARWAL, SR. D.R. DATE OF HEARING 30/01/2020 !'# / DATE OF PRONOUNCEMENT 31/01/2020 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-8, AHMEDABAD (CIT(A) IN SHORT), DATED 0 7.05.2018 ARISING IN THE ASSESSMENT ORDER DATED 03.02.2016 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 200A OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2014-15. ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 2 - 2. AS PER MAIN GROUNDS OF APPEAL, THE ASSESSEE H AS CHALLENGED THE APPLICABILITY OF SECTION 234E R.W.S. 204 OF THE ACT WHEREBY LATE FILING FEES OF RS.4,39,245/- WAS IMPOSED FOR THE FY 2013-14 CONCERNING AY 2014-15. 3. IT IS THE CASE OF THE ASSESSEE THAT SECTION 200A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) IS MACHINERY PROVISION PROVIDING MECHANISM FOR PROCESSING A STAT EMENT OF DEDUCTION OF TAX AT SOURCE AND FOR MAKING ADJUSTMEN TS WHICH ARE ARITHMETICAL OR PRIMA FACIE IN NATURE AND DOES NOT CREATE ANY CHARGE IN ANY MANNER. THIS PROVISION SPECIFICALLY PROVIDE S FOR COMPUTING FEE PAYABLE UNDER S.234E W.E.F. 01/06/2015. IT IS THUS THE CASE OF THE ASSESSEE THAT SECTION 234-E BEING A CHARGING PR OVISION CREATING A CHARGE FOR LEVYING FEE FOR CERTAIN DEFAULTS IN FI LING STATEMENTS AND FEES PRESCRIBED UNDER S.234-E CANNOT BE LEVIED WITH OUT A REGULATORY PROVISION FOUND IN SECTION 200A FOR COMPUTATION OF FEE PRIOR TO 01/06/2015. 4. WE FIND THAT THE LEGAL ISSUE RAISED BY THE ASSES SEE HAS BEEN ADDRESSED BY HONBLE GUJARAT HIGH COURT IN FAVOUR O F THE REVENUE AND AGAINST THE ASSESSEE IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA (2017) 83 TAXMANN.COM 137 (GUJ.). THE HONBLE GUJARAT HIGH COURT HELD THAT SECTION 234E OF THE ACT IS A C HARGING PROVISION CREATING A CHARGE FOR LEVYING FEE FOR CERTAIN DEFAU LTS IN FILING STATEMENTS AND FEE PRESCRIBED UNDER S.234E COULD BE LEVIED EVEN IN THE ABSENCE OF A REGULATORY PROVISION BEING FOUND I N SECTION 200A FOR COMPUTATION OF FEE. IN THE LIGHT OF AFORESAID DECISION OF THE HONBLE GUJARAT HIGH COURT, WE DECLINE TO INTERFERE WITH THE ACTION OF THE REVENUE AUTHORITIES. IN VIEW OF THE DECISI ON OF THE HONBLE GUJARAT HIGH COURT IN RAJESH KOURANI (SUPRA), THE ISSUE IS NO LONGER RES INTEGRA. ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 3 - 5. IN PARITY, THE MAIN GROUNDS OF APPEAL OF THE ASS ESSEE ARE DISMISSED. 6. WE NOW ADVERT TO THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE AS UNDER: 1. THE DEDUCTION OF TDS AT 1% U/S. 194IA(1) IS NOT APPLICABLE IN RESPECT OF TRANSFER OF IMMOVABLE PROPERTY OF LESS T HAN RS. 50 LAKHS BY ANY PERSON BEING TRANSFEREE. SECTION 194IA (2) IS APPLICABLE ONLY W.R.T. THE AMOUNT RELATED TO EACH T RANSFEREE AND NOT WITH REFERENCE TO THE AMOUNT AS PER SALE DE ED. IN THE INSTANT CASE, THERE ARE 8 TRANSFEREE'S AND IN CASE OF 4 TRANSFEREE'S CONSIDERATION IS BELOW RS. 50 LAKHS, W HEREBY, PROVISIONS OF SECTION 194IA(1) IS NOT APPLICABLE. A CCORDINGLY, LATE FEES U/S. 234E IS NOT APPLICABLE IN CASE OF TH ESE 4 TRANSFEREE'S. 7. THE ADDITIONAL GROUND RAISED BEING LEGAL IN NATU RE AND FOR WHICH RELEVANT FACTS ARE AVAILABLE ON RECORD, STAND S ADMITTED UNDER RULE 11 OF THE ITAT RULES. 8. AS PER THE ADDITIONAL GROUNDS OF APPEAL, THE ASS ESSEE HAS TAKEN ALTERNATIVE PLEA THAT OBLIGATION TO DEDUCT TDS @ 1% UNDER S.194IA(1) OF THE ACT IS NOT APPLICABLE IN RESPECT OF TRANSFER OF IMMOVABLE PROPERTY OF LESS THAN RS.50 LAKHS BY ANY PERSON TO A TRANSFEREE. IT WAS CONTENDED ON BEHALF OF THE ASSE SSEE THAT OBLIGATION TO DEDUCT TDS UNDER S.194IA OF THE ACT I S APPLICABLE QUA EACH TRANSFEROR/PAYEE OF THE IMMOVABLE PROPERTY AND CANNOT BE SEEN WITH REFERENCE TO THE AGGREGATE VALUE OF THE IMMOVA BLE PROPERTY UNDER TRANSFER TO SEVERAL TRANSFEREES JOINTLY. IN THIS CONTEXT, A TABULATED STATEMENT OF DETAILS OF TDS UNDER S.194IA AND LATE FEE COMPUTED UNDER S.234E WAS REFERRED TO IN THE COURSE OF HEARING WHICH IS REPRODUCED HEREUNDER: ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 4 - 9. WITH REFERENCE TO THE ABOVE TABULATED STATEMENT, THE LEARNED AR SUBMITTED THAT LATE FILING FEE IS NOT APPLICABLE WITH REFERENCE TO LAST FOUR ENTRIES WHERE THE SHARE OF CONSIDERATION PAID BY THE ASSESSEE TO EACH TRANSFEROR FOR ACQUISITION OF PROP ERTY IS LESS THAN RS.50 LAKHS. THEREFORE, THE ASSESSEE WAS NOT UNDER OBLIGATION UNDER S.194IA OF THE ACT FOR DEDUCTION OF TDS @ 1% ON SUCH ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 5 - CONSIDERATION ON BEHALF OF THE TRANSFEROR/SELLER. IT WAS THUS CONTENDED THAT IN THE ABSENCE OF ANY LIABILITY OF D EDUCTION UNDER S.194IA OF THE ACT, IN SO FAR AS LAST FOUR ENTRIES IN THE TABLE ARE CONCERNED, THE CONSEQUENT LATE FILING FEES AGGREGAT E TO RS.1,35,000/- IMPOSED ON THE TRANSFEREE ASSESSEE IS NOT SUSTAINAB LE IN LAW IN THE ABSENCE OF ANY DEFAULT PER SE. 10. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN F AVOUR OF THE ASSESSEE BY THE DECISION OF THE CO-ORDINATE BENCH O F TRIBUNAL IN VINOD SONI VS. ITO & ORS. ITA NO.2736/DEL/2015 ORDE R DATED 10.12.2018 . THE RELEVANT OPERATIVE PARA IS REPRODUCED HEREUN DER: 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE PROVIS IONS OF LAW ON THE SUBJECT AND THE CASE LAWS CITED BY THE LD. DR IN HI S WRITTEN SUBMISSIONS. WE FIND THAT IN THE INSTANT CASE SH. P RADEEP SONI; SMT. BABLI SONI; SH. VINOD SONI AND SMT. BEENA SONI OF S AME FAMILY, PURCHASED 1/4TH UNDIVIDED EQUAL SHARES IN IMMOVABLE PROPERTY, PLOT NO. 94, BLOCK-F, SLF MODEL TOWN, SECTOR-10, FARIDAB AD VIDE SINGLE REGISTERED SALE DEED DATED 3.7.2013 FOR RS. 1,50,00 ,000/-. THE 1/4TH SHARE PURCHASE CONSIDERATION FOR EACH PERSON WAS ON LY RS. 37,50,000/- EACH. THE AO HELD THAT SINCE THE VALUE OF THE PROPERTY PURCHASES UNDER SINGLE SALE DEED WAS EXCEEDING RS. 50,00,000/- THEREFORE, AS PER SECTION 194 IA(2), THE ASSESSEE W AS REQUIRED TO DEDUCT TDS @1%. THE AO THUS HELD THAT ALL THE FOUR ASSESSEES AS DEFAULTER U/S. 201(1) AND CREATED A TOTAL LIABILITY @ 1% I.E. RS. 1,50,000/- BY A COMMON ORDER U/S. 201(1) OF THE ACT AND LD. CIT(A) CONFIRMED THE FINDINGS OF THE AO. DURING THE HEARIN G, LD. COUNSEL FOR THE ASSESSEE DRAW OUR ATTENTION TOWARDS THE PAP ER BOOK-I PAGE NO. 1 TO 8 WHICH IS A COPY OF PURCHASE DEED DATED 3 .7.2013 WAS ATTACHED ESPECIALLY PAGE NO. 6 PARA NO. 4 OF THE SA LE DEED WHICH IS REPRODUCED AS UNDER:- 4. THAT THE ACTUAL PHYSICAL POSSESSION OF THE SAID RESIDENTIAL PLOT NO. 94, BLOCK-F, AREA MEASURING 500 SQ. YARDS IN THE RESIDENTIAL KNOWN AS DLFS MODEL TOWN, SECTOR-10, F ARIDABAD SITUATED IN VILLAGE SIHI, TEHSIL BALLABGARH, DISTT. FARIDABAD HAS BEEN HANDED OVER AND DELIVERED BY THE VENDOR TO THE VENDEES AND THE VENDEES HAVE BECOME THE ABSOLUTE AN D UNDISPUTED OWNER OF ABOVE SAID PLOT IN EQUAL SHARE. 5.1 HE FURTHER DRAW OUR ATTENTION TOWARDS PAPER BOO K-II PAGE NO. 14 HAVING THE DETAILS OF PARTY WISE PAYMENT FOR PUR CHASE OF PROPERTY AND PAGE NO. 15 TO 20 WHICH ARE THE COPIES OF BANKS STATEMENTS ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 6 - SHOWING PAYMENT BY SH. PRADEEP SONI; SMT. BABLI SON I; SH. VINOD SONI AND SH. BEENA SONI AND ALSO DRAW OUR ATTENTION TOWARDS PAGE NO. 21 WHICH THE COPY OF LOAN STATEMENT ICICI SHOWI NG PAYMENT (ALL 04 PARTIES). 5.2 AFTER PERUSING THE PAPER BOOK AND THE RELEVANT PROVISIONS OF LAW, WE FIND THAT SECTION 194-IA(2) PROVIDES THAT S ECTION 194-IA(1) WILL NOT APPLICABLE WHERE THE CONSIDERATION FOR TRA NSFER OF IMMOVABLE PROPERTY IS LESS THAN RS. 50,00,000/-. HO WEVER, SECTION 194-IA(1) IS APPLICABLE ON ANY PERSON BEING A TRANS FEREE, SO SECTION 194-IA(2) IS ALSO, OBVIOUSLY, APPLICABLE ONLY W.R.T . THE AMOUNT RELATED TO EACH TRANSFEREE AND NOT WITH REFERENCE T O THE AMOUNT AS PER SALE DEED. IN THE INSTANT CASE THERE ARE 04 SEP ARATE TRANSFEREES AND THE SALE CONSIDERATION W.R.T. EACH TRANSFEREE I S RS. 37,50,000/-, HENCE, LESS THAN RS. 50,00,000/- EACH. EACH TRANSFE REE IS A SEPARATE INCOME TAX ENTITY THEREFORE, THE LAW HAS TO BE APPL IED WITH REFERENCE TO EACH TRANSFEREE AS AN INDIVIDUAL TRANSFEREE / PE RSON. IT IS ALSO NOTED THAT SECTION 194-IA WAS INTRODUCED BY FINANCE ACT, 2013 EFFECTIVE FROM 1.6.2013. IT IS ALSO NOTED FROM THE MEMORANDUM EXPLAINING THE PROVISIONS BROUGHT OUT ALONGWITH THE FINANCE BILL WHEREIN IT WAS STATED THAT IN ORDER TO REDUCE THE COMPLIANCE BURDEN ON THE SMALL TAX PAYERS, IT IS FURTHER PROPOSED THA T NO DEDUCTION OF TAX UNDER THIS PROVISION SHALL BE MADE WHERE THE TO TAL AMOUNT OF CONSIDERATION FOR THE TRANSFER OF AN IMMOVABLE PROP ERTY IS LESS THAN FIFTY LAKHS RUPEES. WE FURTHER FIND THAT THE MAIN REASON BY THE AO IS THAT THE AMOUNT AS PER SALE DEED IS RS. 1,50,00,000 /-. THE LAW CANNOT BE INTERPRETED AND APPLIED DIFFERENTLY FOR THE SAME TRANSACTION, IF CARRIED OUT IN DIFFERENT WAYS. THE POINT TO BE MADE IS THAT, THE LAW CANNOT BE READ AS THAT IN CASE OF FOUR SEPARATE PUR CHASE DEED FOR FOUR PERSONS SEPARATELY, SECTION 194-IA WAS NOT APP LICABLE, AND IN CASE OF A SINGLE PURCHASE DEED FOR FOUR PERSONS SEC TION 194-IA WILL BE APPLICABLE. IT IS NOTED THAT AO HAS PASSED A COM MON ORDER U/S. 201(1) FOR ALL THE FOUR TRANSFEREES. IN ORDER TO JU STIFY HIS ACTION SINCE IN CASE OF SEPARATE ORDERS FOR EACH TRANSFEREE SEPA RATELY, APPARENTLY, PROVISIONS OF SECTION 194IA COULD NOT HAD BEEN MADE APPLICABLE SINCE IN EACH CASE PURCHASE CONSIDERATION IS ONLY R S. 37,50,000/-. THIS ACTION OF AO SHOWS THAT HE WAS ALSO CLEAR IN H IS MIND THAT WITH REFERENCE TO EACH TRANSFEREE, SECTION 194IA WAS NOT APPLICABLE. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE ADDIT ION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IS NOT SUSTAINAB LE IN THE EYES OF LAW, THUS THE SAME IS DELETED. AS FAR AS ISSUE OF C HARGING INTEREST IS CONCERNED, THE SAME IS CONSEQUENTIAL IN NATURE, HEN CE, NEED NOT BE ADJUDICATED. AS REGARDS THE CASE LAWS CITED BY THE LD. DR ARE CONCERNED, THE SAME ARE ON DISTINGUISHED FACTS AND THEREFORE, NOT APPLICABLE IN THE PRESENT CASE. ACCORDINGLY, THE GR OUNDS RAISED BY THE ASSESSEE STAND ALLOWED AND AS A RESULT THEREOF, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. SINCE IN ALL THE OTHER 03 APPEALS, I.E., IN THE CASE OF VINOD SONI VS. ITO IN ITA 2736/DEL/2015 (AY 2014-15); BABLI SONI V S. ITO IN ITA NO. 2737/DEL/2015 (AY 2014-15) AND BEENA SONI VS. I TO IN ITA NO. 2738/DEL/2015 (AY 2014-15), SIMILAR FACTS ARE PERME ATING, ITA NO.1680/AHD/18 [BHIKHABHAI H. PATEL VS. DCIT] A.Y. 2014-15 - 7 - THEREFORE, OUR FINDING GIVEN ABOVE IN ITA NO. 2739/ DEL/2015 (AY 2014-15) IN THE CASE OF PRADEEP KUMAR SONI VS. ITO WILL APPLY MUTATIS MUTANDIS IN THESE THREE APPEALS ALSO, BECAU SE THE FACTS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY THE SAME. 7. IN THE RESULT, ALL THE 04 APPEALS FILED BY THE A SSESSEE ARE ALLOWED. 11. THE CO-ORDINATE BENCH HAS THUS HELD THAT THE OB LIGATION UNDER S.194IA OF THE ACT IS FASTENED ON THE TRANSFEREE QUA EACH TRANSFEROR AND WHERE THE CONSIDERATION PAID TO ANY TRANSFEROR IS LESS THAN RS.50 LAKHS, THE PROVISIONS OF SECTION 194IA OF THE ACT W OULD NOT APPLY. IN PARITY WITH THE VIEW ALREADY EXPRESSED ON THE IS SUE, IN THE ABSENCE OF ANY DEFAULT UNDER S.194IA OF THE ACT, CO NSEQUENTIAL LATE FILING FEES UNDER S.234E OF THE ACT TO THE EXTENT O F RS.1,35,000/- OUT OF TOTAL LATE FEE OF RS.4,39,301/- IS DIRECTED TO B E DELETED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 31/01/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 31/01/20 20