Parul Sharma Vs ITO (TDS) (ITAT Delhi)
TDS Demand for Inoperative PAN Set Aside; CBDT Circular Granting Relief to Deductor Applied
The Delhi Bench of the ITAT allowed the appeal of Parul Sharma for AY 2025-26 and set aside the demand raised under section 200A on account of PAN–Aadhaar non-linkage of the deductee.
The Tribunal noted that TDS had in fact been deposited, and the demand arose only because the deductee’s PAN had become inoperative due to Aadhaar not being linked—claimed to be on account of technical glitches and bona fide delay. The NFAC/CIT(A) had sustained the demand by relying on CBDT Circular No. 3/2023.
However, the ITAT held that the matter is squarely covered by CBDT Circular No. 6/2024 dated 23.04.2024, which provides that where PAN becomes operative on or before 31.05.2024, no adverse consequences under sections 206AA/206CC shall apply to the deductor for transactions up to 31.03.2024. Since this beneficial circular was not applied by the lower authority, the assessee was wrongly non-suited.
Accordingly, the Tribunal set aside the impugned orders and directed the Assessing Officer to extend the benefit of CBDT Circular dated 23.04.2024 and pass a fresh order in accordance with law.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 03.04.2025 of the National Faceless Appeal Centre (NFAC) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1075454369(1) arising out of the order dated 09.06.2024 u/s 200A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY: 2025-26.
