ITAT Cancels Rs. 15,150 Penalty for Late TDS Filing; Exemption Applies Due to Agricultural Land Payment Under Rs. 50 Lakhs.

The ITAT allowed the appeal, canceling the penalty of Rs. 15,150/- imposed under Section 234E of the Income Tax Act, 1961. The ITAT determined that the assessee was not liable to deduct TDS under Section 194IA, as the payment for the agricultural land was below Rs. 50 Lakhs. The penalty, initially imposed due to a delay in filing TDS Form 26QB, was deemed incorrect since the stamp duty valuation discrepancy was resolved, and the exemption under Section 194IA applied. The delay in filing the appeal was condoned, and the assessee's explanation was accepted.

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Issues:
Delay in filing appeal, Penalty under Section 234E of the Income Tax Act, 1961, Incorrect imposition of penalty, Liability to deduct TDS, Stamp duty valuation discrepancy, Exemption under Section 194IA of the Act.

Delay in filing appeal:
The appeal was filed by the assessee against the order of the National Faceless Appeal Centre (NFAC) for the Assessment Year 2022-23, with a delay of 3 days due to an error in the original Form No.36. The delay was condoned upon explanation by the assessee.

Penalty under Section 234E of the Income Tax Act, 1961:
The appeal was directed against the penalty of Rs. 15,150/- imposed under Section 234E for late filing of TDS Form 26QB. The Ld. CIT(A) dismissed the appeal, leading to the assessee appealing before the ITAT.

Incorrect imposition of penalty:
The ITAT found that the assessee was not liable to deduct any TDS under Section 194IA of the Act as the payment made was below Rs. 50 Lakhs. The penalty was imposed due to a delay in filing the TDS return, which was unintentional.

Liability to deduct TDS:
The assessee had purchased agricultural land and paid an amount below Rs. 50 Lakhs, deducting TDS voluntarily. The delay in filing the TDS return led to the penalty being imposed, even though the assessee was not liable to deduct TDS under the Act.

Stamp duty valuation discrepancy:
The Ld. CIT(A) incorrectly considered the stamp duty valuation of the property to be above Rs. 50 Lakhs, leading to the imposition of the penalty. However, the ITAT clarified that the assessee was not liable to deduct TDS based on the actual payment made.

Exemption under Section 194IA of the Act:
The ITAT observed that the provision for TDS under Section 194IA of the Act on the stamp duty value of the property was introduced after the transaction was completed by the assessee. As the assessee was not liable to deduct TDS, the penalty under Section 234E was canceled, and the appeal was allowed.

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