Case Law Details
Mrudulagauri Jaysukhlal Bhalodia Vs ITO (ITAT Ahmedabad)
Introduction: The Income Tax Appellate Tribunal (ITAT) Ahmedabad, in the case of Mrudulagauri Jaysukhlal Bhalodia Vs Income Tax Officer (ITO), ruled on an appeal concerning the levying of Tax Deducted at Source (TDS) under sections 201(1) and 201(1A) of the Income Tax Act, 1961. The ITAT’s decision to delete the TDS demand is a crucial verdict on double taxation, holding implications for property transactions and TDS obligations.
Analysis: The appellant, Mrudulagauri Jaysukhlal Bhalodia, challenged the order under section 201(1) and 201(1A), arguing that it was bad in law. This case revolved around the purchase of a property from twenty co-owners, where the assessee was treated in default for non-deduction of TDS. The assessee argued that the demand resulted in double taxation as the taxes had already been paid. After a series of appeals, the ITAT found that raising a demand on the appellant would indeed result in double taxation, which is not permissible under law. Consequently, the ITAT deleted the TDS demand, although interest under section 201(1A) would still apply as per law.
Conclusion: The ITAT Ahmedabad’s ruling in the case of Mrudulagauri Jaysukhlal Bhalodia Vs ITO signifies a vital development in TDS and double taxation jurisprudence. It highlights the importance of correct tax deduction at source and serves as a reminder for the consequences of non-compliance. However, the verdict also provides some relief to assessees by clarifying that double taxation resulting from TDS is not permissible under the law.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Very useful information for IT payees who failed to deduct TDS