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2022 (12) TMI 419 - ITAT DELHITDS u/s 194IA - non deduction of tax while making payment for purchase of property - liability under Section 201(1) r.w. Section 201(1A) - whether the obligation provided u/s 194IA is qua the proper ty or qua the transferee? - HELD THAT:- 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. When the provision is read as a whole, it gives an infallible impression that obligation cast u/s 194IA is qua each transferee and not qua the aggregate consideration. The reasons are not far to seek. It will not be practicable to achieve the requirement of second limb if the case of the Revenue is accepted that it is qua total consideration involved and not each transferee. Obligation cast u/s 194IA arises to a particular transferee at the time of payment of consideration or at the time of credit in its own accounts. Law cannot be read to expect one transferee to deduct TDS on behalf of other transferee at the time action taken by him towards payment or credit. If the contentions of the Revenue are accepted that vicarious liability imposed u/s 194IA is linked to the value of the property, an anomalous and unintended situation will arise for deduction of TDS. The contention of the assessee that Section 194IA operates qua each transferee and not qua total consideration is in absolute congruence with the schematic interpretation of Section 194IA of the Act. On facts, the assessee in the instant case has admittedly paid Rs. 40 lakhs which is below threshold limit provided to trigger the obligation provided in Section 194IA - Hence, Section 194IA has no application where a transferee in question has neither credited nor paid consideration for transfer of immovable proper ty in excess of threshold limit of Rs. 50 lakhs. We thus find merit in the plea raised on behalf of the assessee for holding the assessee to be not an assessee in default for the purposes of Section 201/201(1A). Hence, we reverse and cancel the liability demand raised under Section 201(1) r.w. Section 201(1A) in the absence of any default committed with reference to Section 194IA of the Act - Appeal of the assessee is allowed.
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