2023 (9) TMI 612 - AT - Income Tax

Exparte order u/s 201(1A) - non deduction of Tax under the provisions of section 194IA - CIT(A) confirming the order of penalty u/s 201(1A) and 234E - HELD THAT - As additional information in the form of bifurcation of amount of consideration paid by each joint buyer is demonstrated with the support of copies of bank statement thus the same could be relied upon but still the assessee is lacking in not submitting the document pertaining loan from HDFC that the same is equally extended by the bank to all the joint buyers. The blatant statement of the assessee that the amount of loan is divided equally between the three co-owners does not inspire our confidence under the circumstance when the assessee was non-compliant before the Ld AO on 22.10.2020 07.01.2021 and 28.01.2021 again before the Ld CIT(A) assessee had submitted that the payment of consideration was equally made by each co-owner and now with a shifting contentions some deferent figures of share in consideration were projected and furnished before us. We are also not oblivious of the fact that the observation of CIT(A) that total payments were made by the appellant assessee only is not the correct fact when the registered sale deed itself shows that the payments were made by different purchasers. We find it fit to set aside orders of the revenue authorities and to restore the issue back to the files of Ld AO so as to verify with supporting evidence the actual status of the payment of consideration by each co-owner towards each flat/ property and adjudicate the issue afresh in terms of provisions of section 194IA. Assessee shall be provided with reasonable opportunity of being heard. In case assessee fails to comply with during the set aside assessment proceedings Ld AO would be at liberty to pass an order in accordance with law. In the result ground no 1-4 of the appeal of the assessee are partly allowed for statistical purposes.

Summary

Issues Involved:
1. Legality of the order passed under section 201 read with section 234E of the Income Tax Act, 1961.
2. Applicability of section 194-IA of the Income Tax Act, 1961 concerning the threshold limit for TDS deduction.
3. Legitimacy of the late filing fees imposed under section 234E.
4. Justification of the interest charged under section 201(1A).

Summary:

Issue 1: Legality of the Order under Section 201 read with Section 234E
The appellant challenged the order passed under section 201 read with section 234E of the Income Tax Act, 1961, claiming it was "highly illegal, bad in law, suffers from legal infirmities, without affording adequate opportunity of being heard and hence liable to be quashed." The Tribunal noted that the appellant had purchased two immovable properties jointly with his parents, and the aggregate consideration was Rs. 1,90,00,000/-. The Ld. AO passed an ex-parte order determining a demand of Rs. 2,16,995/- and late filing fee of Rs. 1,90,000/- under section 234E. The Tribunal found that the appellant was non-compliant during the proceedings and lacked supporting evidence for some claims, leading to the decision to restore the issue back to the files of Ld AO for verification and fresh adjudication.

Issue 2: Applicability of Section 194-IA
The appellant contended that the threshold limit of Rs. 50,00,000 was not reached for each individual purchaser with reference to each immovable property, and hence, there was no liability to deduct and deposit tax at source as per section 194-IA. The Tribunal observed that the payments made by each co-buyer towards individual property were below the threshold limit, but the appellant failed to provide adequate evidence for the division of the home loan from HDFC Bank. The Tribunal directed the Ld AO to verify the actual status of the payment of consideration by each co-owner towards each flat/property and adjudicate the issue afresh.

Issue 3: Legitimacy of Late Filing Fees under Section 234E
The appellant argued that the late filing fees of Rs. 1,90,000/- imposed under section 234E were "highly illegal, unjustified, unwarranted, not proper on facts and not in accordance with the provisions of law." The Tribunal, considering the facts and the appellant's non-compliance during the proceedings, decided to restore the issue back to the files of Ld AO for fresh adjudication.

Issue 4: Justification of Interest under Section 201(1A)
The appellant contended that the interest of Rs. 26,995/- charged under section 201(1A) was "highly illegal, unjustified, unwarranted, not proper on facts and not in accordance with the provisions of law." The Tribunal found that the appellant's shifting contentions and lack of supporting evidence necessitated a fresh verification by the Ld AO.

Conclusion:
The Tribunal set aside the orders of the revenue authorities and restored the issues back to the Ld AO for verification with supporting evidence and fresh adjudication. The appeal of the assessee was partly allowed for statistical purposes. The order was pronounced on 12/09/2023.