When assessee not liable to deduct TDS, no late fee u/s 234E can be imposed for late filing of TDS return by the assessee
In a recent judgment, the ITAT Ahmadabad has held that when assessee not liable to deduct TDS, no late fee u/s 234E can be imposed for late filing of TDS return. Further assessee was not liable to deduct TDS u/s 194IA on stamp duty value as the amendment was introduced after transaction was already completed by the assessee
ABCAUS Case Law Citation:
4274 (2024) (10) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the National Faceless Appeal Centre (NFAC)/CIT(A) in confirming the penalty/late fee imposed under Section 234E of the Income Tax Act, 1961 (the Act) for late filing of TDS Form 26QB.
The appellant assesse had purchased an agricultural land with other co-owners and paid an amount of less than Rs. 50 lakhs towards acquisition of this property. The assessee had also deducted TDS u/s 194IA of the Act, which was deposited within the due date. However, there was slight delay in filing of TDS return in Form No. 26QB, for which the late fee / penalty was imposed by the CPC-TDS while processing the TDS return.
It was explained that the consideration paid by the assessee was below Rs. 50 Lakhs and, therefore, he was not liable to deduct any TDS. In spite of this fact, the assessee had deducted the TDS and also deposited the same to the Government account within time. The delay in filing the TDS return was unintentional as the assessee was not aware of the provisions. Considering the fact that assessee was not liable to deduct any TDS, it was requested that the penalty for late filing of TDS return be condoned.
The Tribunal observed that the CIT(A) had given a finding that though the purchase consideration paid by the assessee was less than Rs. 50 Lakhs, the stamp duty valuation of the property was more than 50 Lakhs and, therefore, the assessee could not have claimed exemption u/s.194IA(2) of the Act.
The Tribunal found that the above observation of the CIT(A) was not correct. The deduction of TDS u/s 194IA of the Act at the relevant point of time, when the transaction was made by the assessee, was required to be made on the amount of payment as made by the assessee. The provision for TDS u/s 194IA of the Act on the stamp duty value of the property was introduced w.e.f. 01.04.2022 i.e. after transaction was already completed by the assessee.
The Tribunal held that assessee was not liable to deduct any TDS u/s 194IA of the Act and when the assessee was not liable to deduct the TDS under the provision of the Act, no late fee/penalty u/s 234E of the Act can be imposed for late filing of TDS return.
Accordingly, the late fee / penalty of imposed u/s 234E of the Act was cancelled.
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