No TDS Default u/s 194-IA Without Aggregation Pre-2024 | ITAT

Case Details: Hasmukhbhai Jayantibhai Patel vs. Income-tax Officer - [2026] 184 taxmann.com 725 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• Siddhartha Nautiyal, Judicial Member & Smt. Annapurna Gupta, Accountant Member
• Chirag Shah, AR for the Appellant.
• Girish Parihar, Sr. DR for the Respondent.

Facts of the Case

The assessee is a purchaser of immovable property from multiple co-owners. The AO observed that no TDS under section 194-IA was deducted, even though the total consideration for the property exceeded Rs. 50 lakhs. The AO held that TDS at 1% under section 194-IA was required, and for failure to deduct, treated the assessee as an assessee in default under section 201(1) and levied interest under section 201(1A).

On appeal, the assessee argued that the Rs. 50 lakhs threshold applied to each co-owner’s share; the CIT(A) rejected the appeal, stating that when a single property is transferred through a common agreement, the threshold should be considered for the property as a whole, and upheld the treatment under section 201(1) and the levy of interest under section 201(1A).

ITAT Held

The aggrieved assessee filed the instant appeal before the Tribunal. The Ahmedabad Tribunal held that the assessee purchased the property from multiple co-owners, and the consideration attributable to each co-owner’s share was below the prescribed threshold of Rs. 50 lakhs. The provisions of section 194-IA, as applicable to the year under consideration, did not contain any stipulation for aggregating consideration in respect of multiple transferors. The amendment providing for such aggregation has been introduced only by the Finance Act, 2024, with effect from 01.04.2024 and is prospective in nature and not applicable to the year under consideration.

Further, the issue was no longer res integra and stood squarely covered in favour of the assessee by a series of decisions of the coordinate benches of the Tribunal. It has been categorically held that where the consideration paid to each co-owner is less than Rs. 50 lakhs, the provisions of section 194-IA are not attracted, and the aggregate consideration cannot be considered for the purpose of determining the threshold, particularly for the period before the insertion of the proviso by the Finance Act, 2024.

Accordingly, the assessee could not be treated as an assessee-in-default under section 201(1), and the demand raised under section 201(1) was deleted.

List of Cases Reviewed

• Aakash Pursottambhai Vaghela v. ITO [2025] 176 taxmann.com 372 (Ahmedabad – Trib.)
• Bhikhabhai Hirabhai Patel v. Dy. CIT [2023] 155 taxmann.com 87 (Ahmedabad – Trib.)
• Archanaben Rajendrasingh Deval v. ITO [2025] 173 taxmann.com 722/212 ITD 414 (Ahmedabad – Trib.)[Para 14] Followed

List of Cases Referred to

• CIT v. Anjum M.H. Ghaswala [2001] 119 Taxman 352/252 ITR 1 (SC) (para 5)
• Aakash Pursottambhai Vaghela v. ITO [2025] 176 taxmann.com 372 (Ahmedabad – Trib.) (para 10)
• Bhikhabhai Hirabhai Patel v. Dy. CIT [2023] 155 taxmann.com 87 (Ahmedabad – Trib.) (para 11)
• Archanaben Rajendrasingh Deval v. ITO [2025] 173 taxmann.com 722/212 ITD 414 (Ahmedabad – Trib.) (para 12).