2022 (12) TMI 419

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....1(1A) of the Income Tax Act, 1961 (the Act) concerning AY 2016-17. 2. As per its grounds of appeal, the assessee has challenged the action of the Revenue Authorities in imposing the liability under Section 201(1) r.w. Section 201(1A) at Rs.67,200/- on the grounds of infringement of provisions of Section 194IA(1) of the Act for non deduction of tax while making payment for purchase of property. 3. When the matter was called for hearing, the ld. counsel for the assessee, at the outset, submitted that the assessee has purchased certain house property jointly with her husband at a total consideration of Rs.55 lakhs paid to the seller of the property. It was submitted that the assessee is a joint owner has contributed Rs.40 lakh to the sel....

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....sideration of Rs.55 lakh which is more than threshold limit as prescribed under Sect ion 194IA of the Act. However, the assessee in the instant case, being a joint owner claims that she is a joint holder to the extent of 75% in the property. The assessee herein has paid a sum of Rs.40 lakhs only as a joint transferee of the property. The question thus piosed for consideration herein is whether any legal obligation arises under Section 194IA of the Act where the consideration paid by each transferee is below threshold limit prescribed under Section 194IA of the Act. 6. The provisions of Section 194IA reads as under: "194-IA (1) Any person, being a transferee, responsible for paying (other than) the person referred to in section 1....

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....transferor. Thus two factors co-exist for applicability of Section 194IA. The first factor, as noted above, relates to the obligation of the transferee and the second factor fixes obligation to deduct tax at the time of credit or payment. When read combinedly; while the first limb of Section 194IA refers to a singular expression, i.e., 'transferee' (in distinction to transferee(s) combined), second limb provides for time of discharge of obligation which in turn, depends on the action of each transferee (in exclusion to other transferee) i.e., either credit in its accounts or actual payment. Thus, when the provision is read as a whole, it gives an infallible impression that obligation cast under Section 194IA is qua each transferee and not q....