TaxTMI 
TaxTMI 
2026 (8) TMI 207
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....hereinafter referred to as 'the Act') relating to the Assessment Year 2017-18. 2. Brief facts of the case are, the assessee is an individual who has filed his return of income for the Assessment Year 2017-18 on 23.08.2018 declaring total income of Rs. 42,00,380/-. The Assessing Officer got the information that the assessee along with two co-owners purchased an immovable property namely Agricultural land situated in Vesu, Old R.S. no. 536 for a total consideration of Rs. 4,73,22,000/- vide Sale Deed dated 07.04.2016, wherein the assessee's share was 50% namely Rs. 2,36,61,000/-. Further, it was observed that the Sellers of the land namely Smt.Laxmiben Chhaganlal and Smt. Champaben Chhaganlal did not hold Permanent Account Numbers [PANs] w....
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....the time of issue of cheque if the PAN of the seller is not furnished. It is seen from the record that the sale deed, for transfer of subject immovable property, was registered on 07.04.2016 on which the appellant had paid the stamp duty of Rs. 23,19,000/-. Thus, the consideration was paid by the appellant towards transfer of property. It is further seen that the appellant had admitted his liability to deduct the TDS u/s 194IA on such transfer as he had deducted and deposited the TDS @1% of transfer amount. The claim of the appellant that cheque was not presented by the seller for encashment has no relevance as section 194IA specifically provides for deduction of tax at the time of issue of cheque. As the appellant had issued the c....
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....A r.w.s 206AA of the Act, this ground of appeal against levy of demand u/s 201(1) of the Act is dismissed. 4.2 Ground No.2. This ground relates to charging of interest u/s 201(1A) on short deduction of tax of Rs. 44,95,590/-, As this ground is consequential in nature, and the demand raised on account of short deduction u/s 201(1) is confirmed in earlier paragraph, the AO was correct in charging the interest charged u/s 201(1A). This ground of appeal is hence dismissed." 4. Aggrieved against the appellate order, the assessee is in appeal before us, raising the following Grounds of Appeal:- 1. On the facts and circumstances of the case as well as law on the subject, the learned AADL/JCIT (Appeal) has erred in confirming t....
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.... the assessee amounted to short deduction, thereby attracting the provisions of sections 201(1) and 201(1A) of the Act. The ld CIT(A) affirmed the action of the AO by holding that the liability to deduct tax crystallized on the date of issuance of the cheques and that the subsequent cancellation of the Sale Deed by the Civil Court would not absolve the assessee from the statutory obligation. 5.1. Before examining the applicability of section 206AA, it is necessary to determine whether the primary charging provision contained in section 194-IA itself is attracted in the facts of the present case. Section 194-IA casts an obligation upon the transferee to deduct tax at source from consideration paid for transfer of any immovable property, o....
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....t establishing that the property was covered by section 194-IA of the Act. 5.4. It is a settled principle that the machinery provisions relating to tax deduction at source cannot operate unless the substantive provision creating the obligation is first attracted. Section 206AA merely prescribes a higher rate of deduction where tax is otherwise deductible and the deductee fails to furnish his PAN. It does not create an independent liability to deduct tax. Therefore, unless the transaction is one falling within the ambit of section 194-IA, the provisions of section 206AA cannot be invoked independently. In other words, where section 194-IA itself has no application, the question of applying the enhanced rate under section 206AA does not ar....