Harvindra Singh Vs ACIT (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal allowed the appeal filed by Harvindra Singh for Assessment Year 2025-26 against the order of the CIT(A)/NFAC dated 26.05.2025, arising from an intimation issued under Section 200A of the Income-tax Act in relation to non-deduction of TDS on purchase of property. The order was pronounced on 29.04.2026.
No one appeared on behalf of the assessee and no adjournment application was moved. The appeal was therefore disposed of after hearing the Departmental Representative.
The ACIT, CPC, TDS had treated the assessee as in default for non-deduction of TDS on the property purchase. The short deduction was determined at ₹3,48,333, and, including interest, the net amount payable was determined at ₹3,51,820.
Before the NFAC, the assessee contended that Section 194-IA was not applicable because the purchase consideration attributable to his individual share was below ₹50 lakh. According to the assessee, the total purchase consideration of ₹55 lakh was jointly paid by him along with two other persons and his individual share in the property was ₹18,13,333. Since that amount was below ₹50 lakh, he contended that there was no obligation to deduct TDS at 1%. The assessee also relied upon decisions of the Delhi Bench of the Tribunal.
The CIT(A)/NFAC, however, took the view that the ₹50 lakh threshold was not to be examined with reference to the respective share of each co-transferee and instead had to be considered with reference to the total value of the property.
The Tribunal found merit in the assessee’s contention. It relied upon the Delhi Tribunal’s earlier decision in Vinod Soni Vs. ITO, ITA Nos.2736/Del/2015 & 2739/Del/2015, order dated 10.12.2018. In that case, four members of the same family had purchased equal one-fourth undivided shares in an immovable property through a single registered sale deed for ₹1.50 crore. The consideration attributable to each transferee was ₹37.50 lakh. The Tribunal had held that Section 194-IA was applicable with reference to each transferee and not by reference to the entire amount stated in the single sale deed.
The earlier Tribunal decision reasoned that Section 194-IA(1) applies to a person being a transferee and that the threshold under Section 194-IA(2) therefore had to be examined with reference to each transferee. It also considered the fact that each transferee was a separate income-tax entity. The Tribunal in that case further referred to the stated object of introducing Section 194-IA, including the proposal to reduce the compliance burden on small taxpayers.
Following the ratio of Vinod Soni Vs. ITO, the Delhi Tribunal held that the same reasoning applied to Harvindra Singh’s case. It observed that the law could not be interpreted and applied differently to the same transaction merely because the transaction was structured through a single purchase deed rather than separate purchase deeds.
The Tribunal consequently held that the order passed under Section 200A and the order of the CIT(A) sustaining that order were not sustainable in law. The grounds raised by the assessee were allowed and the appeal was allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH
This appeal is filed by the assessee against the order of Ld. CIT(A)/NFAC dated 26.05.2025 for the A.Y. 2025-26, arising out of the order passed u/s.200A of the Act by the AO for non deduction of TDS on the payment made for purchase of property by the assessee.
2. None appeared on behalf of the assessee nor any adjournment application was moved, thus the appeal of the assessee is disposed of after hearing the Ld. DR.
3. In this case intimation u/s.200A of the Act was passed by the ACIT, CPC, TDS, treating the assessee in default for non deduction of TDS on the payment made for property purchase of property by the assessee. The short deduction of TDS was arrived at Rs.3,48,333/- and including interest the net payable was determined at Rs.3,51,820/-. Before the NFAC the assessee submitted that the provisions of section 194-IA of the Act are not applicable and the assessee is not required to deduct TDS @ 1% on the purchase of the property when value of such property is less of Assessee’s share than Rs.50 lakhs. The Assessee contended that the provisions of section 194-IA of the Act are not applicable to the assessee for the reason that the purchase consideration of Rs.55 lacs was jointly paid by the assessee alongwith two other persons and therefore, the assessee’s share in the property was only Rs.18,13,333/- and this amount is less than Rs.50 lacs, thus the assessee was not required to deduct TDS. The assessee placed reliance on various decisions of the Delhi Tribunal to support his contentions.
4. However, the Ld. CIT(A) / NFAC was of the view that the threshold limit of Rs.50 lacs is not to be considered on the basis of respective share of co transferee and rather has to be taken as total value of the property. Against this order of the Ld. CIT(A) the assessee is in appeal before us.
5. We find merit in the contentions of the assessee. We observed that identical issue came up for consideration before the Delhi Bench of the Tribunal in the case of Vinod Soni Vs. ITO in ITA No.2736/Del/2015 & 2739/Del/2015 and the Tribunal by order dated 10.12.2018 held as under :-
“5. We have heard both the parties and perused the records especially the impugned order as well as the provisions of law on the subject and the case laws cited by the Ld. DR in his written submissions. We find that in the instant case Sh. Pradeep Soni; Smt. Babli Soni; Sh. Vinod Soni and Smt. Beena Soni of same family, purchased 1/4th undivided equal shares in immovable property, Plot No. 94, Block-F, SLF Model Town, Sector-10, Faridabad vide single registered sale deed dated 3.7.2013 for Rs. 1,50,00,000/-. The 1/4th share purchase consideration for each person was only Rs. 37,50,000/- each. The AO held that since the value of the property purchases under single sale deed was exceeding Rs. 50,00,000/-therefore, as per section 194 IA(2), the assessee was required to deduct TDS @1%. The AO thus held that all the four assessees as defaulter u/s. 201(1) and created a total liability @ 1% i.e. Rs. 1,50,000/- by a common order u/s. 201(1) of the Act and Ld. CIT(A) confirmed the findings of the AO. During the hearing, Ld. Counsel for the assessee draw our attention towards the Paper Book-I Page no. 1 to 8 which is a copy of purchase deed dated 3.7.2013 was attached especially page no. 6 para no. 4 of the Sale Deed which is reproduced as under:-
“4. That the actual physical possession of the said Residential Plot No. 94, Block-F, Area Measuring 500 sq. yards in the residential known as DLF’s Model Town, Sector-10, Faridabad situated in Village Sihi, Tehsil Ballabgarh, Distt. Faridabad has been handed over and delivered by the Vendor to the Vendees and the Vendees have become the absolute and undisputed owner of above said plot in equal share.”
5.1 He further draw our attention towards Paper Book-II Page No. 14 having the details of party wise payment for purchase of property and page no. 15 to 20 which are the copies of Banks Statements showing payment by Sh. Pradeep Soni; Smt. Babli Soni; Sh. Vinod Soni and Sh. Beena Soni and also draw our attention towards page no. 21 which the copy of Loan Statement ICICI showing payment (all 04 parties).
5.2 After perusing the Paper Book and the relevant provisions of law, we find that Section 194-IA(2) provides that Section 194-IA(1) will not applicable where the consideration for transfer of immovable property is less than Rs. 50,00,000/-. However, section 194-IA(1) is applicable on any person being a transferee, so section 194-IA(2) is also, obviously, applicable only w.r.t. the amount related to each transferee and not with reference to the amount as per sale deed. In the instant case there are 04 separate transferees and the sale consideration w.r.t. each transferee is Rs. 37,50,000/-, hence, less than Rs. 50,00,000/- each. transferee is a separate income tax entity therefore, the law has to be applied with reference to each transferee as an individual transferee /person. It is also noted that Section 194-IA was introduced by Finance Act, 2013 effective from 1.6.2013. It is also noted from the Memorandum explaining the provisions brought out alongwith the Finance Bill wherein it was stated that “in order to reduce the compliance burden on the small tax payers, it is further proposed that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakhs rupees.” We further find that the main reason by the AO is that the amount as per sale deed is Rs. 1,50,00,000/-. The law cannot be interpreted and applied differently for the same transaction, if carried out in different ways. The point to be made is that, the law cannot be read as that in case of four separate purchase deed for four persons separately, Section 194-IA was not applicable, and in case of a single purchase deed for four persons Section 194-IA will be applicable. It is noted that AO has
5.3 passed a common order u/s. 201(1) for all the four transferees. In order to justify his action since in case of separate orders for each transferee separately, apparently, provisions of section 1941A could not had been made. applicable since in each case purchase consideration is only Rs. 37,50,000/-. This action of AO shows that he was also clear in his mind that with reference to each transferee, Section 1941A was not applicable. Hence, we are of the considered view that the addition made by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law, thus the same is deleted. As far as issue of charging interest is concerned, the same is consequential in nature, hence, need not be adjudicated. As regards the case laws cited by the Ld. DR are concerned, the same are on distinguished facts and therefore, not applicable in the present case. Accordingly, the grounds raised by the assessee stand allowed and as a result thereof, the appeal of the assessee is allowed.”
6. As could be seen from the above the Tribunal held that the law cannot be interpreted and applied differently from the same transaction if carried out in different ways i.e. in case of four separate purchase deeds for four persons separately u/s.194-IA of the Act was not applicable and in case of single purchase deed for four persons section 194-IA of the Act will be applicable.
7. The ratio of the decision squarely applies to the facts of the asessee’s case. Respectfully following the said decision we hold that the order passed u/s.200A of the Act and also the order of the Ld. CIT(A) in sustaining such order is not sustainable in the eyes of law. Grounds raised by the assessee are allowed.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29.04.2026.
