Varun Atul Jain Vs ITO (ITAT Mumbai)
Section 194-IA Delay Has a Price – Interest under Section 201(1A) and Fee under Section 234E Cannot Be Waived for Bona Fide Reasons
Background
The assessee purchased an immovable property situated at Palaj, Gandhinagar, Gujarat, for a total consideration of ₹1,76,25,000 during Financial Year 2024-25.
The entire sale consideration was paid to the seller on 8 August 2024, while the sale deed was executed and registered in the assessee’s name on 8 October 2024.
Under section 194-IA, a buyer purchasing immovable property for ₹50 lakh or more is required to deduct tax at source at the prescribed rate. The assessee, however, deposited TDS of ₹1,76,250 and furnished the challan-cum-statement in Form No. 26QB only on 29 March 2025.
While processing Form No. 26QB under section 200A, CPC-TDS charged interest of ₹21,144 under section 201(1A) for delayed payment of TDS and levied a fee of ₹36,000 under section 234E for delayed filing of Form No. 26QB. The total demand, after rounding off, was ₹57,140.
Assessee’s Explanation for the Delay
The assessee explained that the delay was neither deliberate nor wilful. He was unaware of the statutory timelines applicable to TDS on the purchase of immovable property. Further, the accountant handling his income-tax matters was temporarily unavailable due to medical exigencies in his family.
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