My brother and I bought a plot from the development authority for Rs 65.11 lakh and paid half each. The Commissioner (Appeals) says the threshold is per property, so we should have deducted. Who is right?
For a purchase before 1 October 2024 the assessee was right and the Commissioner (Appeals) was wrong. The Tribunal, following its own Coordinate Bench in Dalpat Singh Nanecha, held that the case was fully covered and directed the Assessing Officer to delete the entire demand raised under section 201(1) and section 201(1A) for non-deduction under section 194-IA.
Decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member (order per Dr. S. Seethalakshmi, JM), Income Tax Appellate Tribunal, Jodhpur Bench) on 2024-01-23, reported as I.T.A. No. 107/Jodh/2023; Assessment Year 2014-15; date of hearing 22 January 2024, order pronounced 23 January 2024. It bears on section 194-IA, section 194-IA(1), section 194-IA(2), section 201(1), section 201(1A) of the Income Tax Act 1961, in TDS Defaults and How Tax Law Is Read matters.
This is the Jodhpur line, and it matters because it is the line the departmental appellate authorities were fighting: the Commissioner (Appeals) in this very case wrote out the Revenue's position in terms — that the threshold is with reference to each property, and that where the aggregate value exceeds fifty lakh rupees each buyer must deduct on his own share. The Tribunal rejected that, and the decision it followed had already given the decisive practical reason: the law cannot be read so that four separate purchase deeds escape the section while a single deed for the same four persons attracts it. Note the shape of the sums involved, because it is what makes these appeals worth running — the tax at one per cent was Rs 32,555 but the interest under section 201(1A), running from 2013 to a 2021 order, was Rs 29,625, so the demand nearly doubled through delay alone. The decision is confined to credits and payments before 1 October 2024; the proviso inserted from that date aggregates the amounts paid by all transferees and reverses the result prospectively.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee and his brother Shri Nitin Kabra were allotted a residential plot (Plot No. 1-V-33, R.C. Vyas Colony, Bhilwara, measuring 237.5 square yards) by the Urban Improvement Trust, Bhilwara on 26 June 2013 and paid the total consideration of Rs 65,11,000 by 30 July 2013, the plot being registered in both their names with each paying Rs 32,55,500. No tax was deducted at source. The Income Tax Officer (TDS), Bhilwara issued show cause notices on 19 January 2017 and 27 December 2018 and, by order dated 22 February 2021 under section 201(1) read with section 201(1A), treated the assessee as an assessee in default on his half share of Rs 32,55,500, raising tax of Rs 32,555 and simple interest of Rs 29,625, Rs 62,180 in all. The National Faceless Appeal Centre dismissed the appeal on 28 February 2023, holding that the fifty lakh rupee threshold is with reference to each property and that where a transaction involves more than one buyer whose individual shares are below fifty lakh rupees but whose aggregate exceeds it, section 194-IA applies and each buyer must deduct on his respective share. The assessee appealed, relying on Vinod Soni v. ITO (TDS), Dalpat Singh Nanecha v. ITO (TDS), Reetu Devi Nanecha v. ITO, Shamim Irshad v. ITO and other Tribunal decisions.
The appeal of the assessee was allowed. Considering the provisions of the Act and respectfully following the Coordinate Bench decision in Dalpat Singh Nanecha, Bhilwara v. ITO, the Tribunal held that the assessee's case was fully covered by that decision and directed the Assessing Officer to delete the demand for TDS liability fastened on the assessee under section 194-IA (paragraph 8 and the disposal line).
The Tribunal recorded that it was not disputed that the assessee had purchased the land along with his brother from the Urban Improvement Trust, Bhilwara, and that if the consideration of the property is divided between the two the consideration attributable to each is below Rs 50,00,000 (paragraph 8). It then set out section 194-IA as it stood, and decided the appeal by following the Coordinate Bench in Dalpat Singh Nanecha, quoting that Bench's operative paragraph, in which the Bench had reasoned that section 194-IA(1) fastens the obligation on any person 'being a transferee', so that sub-section (2) is likewise applicable only with reference to the amount related to each transferee and not to the amount stated in the sale deed; that each transferee is a separate income-tax entity; that the Memorandum to the Finance Bill 2013 explained the threshold as intended to reduce the compliance burden on small taxpayers; and that the law cannot be interpreted and applied differently for the same transaction according to whether it is carried out by one deed or by several (paragraph 8, quoting the Coordinate Bench). The Revenue's contrary argument, that the provision is to be read qua the property amount and not qua the threshold of each assessee, was recorded at paragraph 7 and rejected.
Considering the above provisions of the Act and respectfully following the Coordinate Bench decision in the cases of Dalpat Singh Nanecha, Bhilwara vs. ITO (supra) the case of the assessee is fully covered by the decision of this Bench and the relevant finding of the bench on this aspect of the matter is reiterated herein below :
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Handle my notice → Ask a CA on WhatsAppFor a purchase before 1 October 2024 the assessee was right and the Commissioner (Appeals) was wrong. The Tribunal, following its own Coordinate Bench in Dalpat Singh Nanecha, held that the case was fully covered and directed the Assessing Officer to delete the entire demand raised under section 201(1) and section 201(1A) for non-deduction under section 194-IA. This was decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member (order per Dr. S. Seethalakshmi, JM), Income Tax Appellate Tribunal, Jodhpur Bench) and bears on section 194-IA, section 194-IA(1), section 194-IA(2), section 201(1), section 201(1A) of the Income Tax Act 1961. It is reported as I.T.A. No. 107/Jodh/2023; Assessment Year 2014-15; date of hearing 22 January 2024, order pronounced 23 January 2024. This is the Jodhpur line, and it matters because it is the line the departmental appellate authorities were fighting: the Commissioner (Appeals) in this very case wrote out the Revenue's position in terms — that the threshold is with reference to each property, and that where the aggregate value exceeds fifty lakh rupees each buyer must deduct on his own share. The Tribunal rejected that, and the decision it followed had already given the decisive practical reason: the law cannot be read so that four separate purchase deeds escape the section while a single deed for the same four persons attracts it. Note the shape of the sums involved, because it is what makes these appeals worth running — the tax at one per cent was Rs 32,555 but the interest under section 201(1A), running from 2013 to a 2021 order, was Rs 29,625, so the demand nearly doubled through delay alone. The decision is confined to credits and payments before 1 October 2024; the proviso inserted from that date aggregates the amounts paid by all transferees and reverses the result prospectively. If it applies to you, the first step is this: Use this decision only for a credit or payment before 1 October 2024; the aggregation proviso from that date changes the answer.
The assessee and his brother Shri Nitin Kabra were allotted a residential plot (Plot No. 1-V-33, R.C. Vyas Colony, Bhilwara, measuring 237.5 square yards) by the Urban Improvement Trust, Bhilwara on 26 June 2013 and paid the total consideration of Rs 65,11,000 by 30 July 2013, the plot being registered in both their names with each paying Rs 32,55,500. No tax was deducted at source. The Income Tax Officer (TDS), Bhilwara issued show cause notices on 19 January 2017 and 27 December 2018 and, by order dated 22 February 2021 under section 201(1) read with section 201(1A), treated the assessee as an assessee in default on his half share of Rs 32,55,500, raising tax of Rs 32,555 and simple interest of Rs 29,625, Rs 62,180 in all. The National Faceless Appeal Centre dismissed the appeal on 28 February 2023, holding that the fifty lakh rupee threshold is with reference to each property and that where a transaction involves more than one buyer whose individual shares are below fifty lakh rupees but whose aggregate exceeds it, section 194-IA applies and each buyer must deduct on his respective share. The assessee appealed, relying on Vinod Soni v. ITO (TDS), Dalpat Singh Nanecha v. ITO (TDS), Reetu Devi Nanecha v. ITO, Shamim Irshad v. ITO and other Tribunal decisions. The matter was decided on 2024-01-23 by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member (order per Dr. S. Seethalakshmi, JM), Income Tax Appellate Tribunal, Jodhpur Bench). On those facts the ITAT held as follows. The appeal of the assessee was allowed. Considering the provisions of the Act and respectfully following the Coordinate Bench decision in Dalpat Singh Nanecha, Bhilwara v. ITO, the Tribunal held that the assessee's case was fully covered by that decision and directed the Assessing Officer to delete the demand for TDS liability fastened on the assessee under section 194-IA (paragraph 8 and the disposal line).
The Tribunal recorded that it was not disputed that the assessee had purchased the land along with his brother from the Urban Improvement Trust, Bhilwara, and that if the consideration of the property is divided between the two the consideration attributable to each is below Rs 50,00,000 (paragraph 8). It then set out section 194-IA as it stood, and decided the appeal by following the Coordinate Bench in Dalpat Singh Nanecha, quoting that Bench's operative paragraph, in which the Bench had reasoned that section 194-IA(1) fastens the obligation on any person 'being a transferee', so that sub-section (2) is likewise applicable only with reference to the amount related to each transferee and not to the amount stated in the sale deed; that each transferee is a separate income-tax entity; that the Memorandum to the Finance Bill 2013 explained the threshold as intended to reduce the compliance burden on small taxpayers; and that the law cannot be interpreted and applied differently for the same transaction according to whether it is carried out by one deed or by several (paragraph 8, quoting the Coordinate Bench). The Revenue's contrary argument, that the provision is to be read qua the property amount and not qua the threshold of each assessee, was recorded at paragraph 7 and rejected. In the words reproduced by the source cited on this page: "Considering the above provisions of the Act and respectfully following the Coordinate Bench decision in the cases of Dalpat Singh Nanecha, Bhilwara vs. ITO (supra) the case of the assessee is fully covered by the decision of this Bench and the relevant finding of the bench on this aspect of the matter is reiterated herein below :" The decision followed or applied Dalpat Singh Nanecha, Bhilwara v. ITO (TDS), Bhilwara, ITA No. 245/Jodh/2019, order dated 16 August 2021 (ITAT Jodhpur) — followed.
It was decided by the ITAT on 2024-01-23 and is reported as I.T.A. No. 107/Jodh/2023; Assessment Year 2014-15; date of hearing 22 January 2024, order pronounced 23 January 2024. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 194-IA, section 194-IA(1), section 194-IA(2), section 201(1), section 201(1A), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal of the assessee was allowed. Considering the provisions of the Act and respectfully following the Coordinate Bench decision in Dalpat Singh Nanecha, Bhilwara v. ITO, the Tribunal held that the assessee's case was fully covered by that decision and directed the Assessing Officer to delete the demand for TDS liability fastened on the assessee under section 194-IA (paragraph 8 and the disposal line). It arises in TDS Defaults and How Tax Law Is Read matters, on section 194-IA, section 194-IA(1), section 194-IA(2), section 201(1), section 201(1A) of the Income Tax Act 1961, and was decided by Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member (order per Dr. S. Seethalakshmi, JM), Income Tax Appellate Tribunal, Jodhpur Bench. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the seller is a development authority or other local authority, say so expressly — in this case the transferor was the Urban Improvement Trust, Bhilwara, and the payment trail is documentary and easy to prove. Put the payment split on the record: the allotment letter, the individual payment receipts, and the registered deed naming both buyers in equal shares. Cite the Jodhpur line — Dalpat Singh Nanecha v. ITO (TDS), ITA No. 245/Jodh/2019, order dated 16 August 2021 — as well as this order, since this order decides the appeal by following it. Attack the section 201(1A) interest as consequential: if the section 201(1) demand goes, the interest goes with it. Watch for the anachronism trap in the departmental orders — here the Commissioner (Appeals) quoted section 194-IA(2) in its post-1 April 2022 form for a financial year 2013-14 transaction. Point out that the version quoted did not exist in the year in question.
Superseded by amendment. The point decided has been reversed prospectively by the proviso inserted in section 194-IA(2) with effect from 1 October 2024, which makes the consideration the aggregate of the amounts paid or payable by all the transferees. The proviso is footnoted in the Act as inserted by Act No. 15 of 2024 with effect from 1 October 2024, and it is expressly described as prospective from that date in the Commissioner (Appeals) order reproduced in ITO (TDS-3) v. Tarun Santramdas Varma (ITAT Ahmedabad, 26 March 2026). The decision remains authority for a credit or payment before that date — and the date that matters is the earlier of the event of credit or payment, not the date of the sale deed. No later treatment of this particular order is recorded here. The underlying Coordinate Bench decision in Dalpat Singh Nanecha is not set out in this entry either; what is said about it is what this Tribunal quoted from it, and the figures in that quotation are themselves inconsistent, so go to that order before relying on its facts. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
READ THIS BEFORE CITING ANY PARAGRAPH NUMBER FROM THIS ORDER. The document is mostly quoted material. The Tribunal's own numbered paragraphs are 1 to 8, followed by the line 'In the result, the appeal of the assessee is allowed.' and the signature block — that is the whole of the Tribunal speaking. Inside paragraph 4 the Tribunal reproduces the Commissioner (Appeals)'s findings, which carry their own numbering ('5. Findings' and '6. As a result, the appeal is dismissed'). Inside paragraphs 5 and 6 the Tribunal reproduces the assessee's written submission, which itself reproduces the whole of paragraphs 7.2, 7.3, 8 and 9 of the ITAT Delhi order in Shamim Irshad v. ITO, the ITAT Jodhpur order in Dalpat Singh Nanecha, and a passage from Reetu Devi Nanecha v. ITO. Those numbers belong to the quoted orders and citing them as paragraphs of THIS order would be a fabricated locator. At paragraph 8 the Tribunal quotes paragraph 11 of the Coordinate Bench order it follows; that '11' is likewise not a paragraph of this order. Internal inconsistencies in the QUOTED material, which the reader should not attribute to this Tribunal: the assessee's submission describes Dalpat Singh Nanecha as concerning a property of Rs 1,26,00,000 with four buyers, while the passage of that order as reproduced refers to a sale deed of Rs 1,50,00,000 with four transferees at Rs 37,50,000 each, and the Reetu Devi Nanecha passage refers to Rs 1.20 crore with four buyers at Rs 31.50 lakh each; the reproduced section 194-IA text in paragraph 8 carries footnote markers 25, 26, 26a and 27 from whatever compilation it was copied out of. The Commissioner (Appeals) also quoted section 194-IA(2) in the post-1 April 2022 form for a 30 July 2013 purchase, which is anachronistic. Reproduction of section numbers in the source is unreliable throughout — '1941A', '194-1A' and 'Section 194-LA' all appear where section 194-IA is meant — so no quotation containing a section number has been taken from the quoted material. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal of the assessee was allowed. Considering the provisions of the Act and respectfully following the Coordinate Bench decision in Dalpat Singh Nanecha, Bhilwara v. ITO, the Tribunal held that the assessee's case was fully covered by that decision and directed the Assessing Officer to delete the demand for TDS liability fastened on the assessee under section 194-IA (paragraph 8 and the disposal line).
TaxSphere, “Sachin Kumar Kabra v. ITO (TDS), Bhilwara (ITAT Jodhpur) — two brothers each paying under fifty lakh for a Rs 65.11 lakh plot owed no section 194-IA deduction”, https://taxnotice.vittsphere.com/caselaw/case/sachin-kumar-kabra-194-ia-two-brothers-each-below-fifty-lakh/ (validity last checked 2026-09-08)
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I bought a flat jointly with my husband for Rs 55 lakh in 2015 and I paid Rs 40 lakh of it. The TDS officer has made me an assessee in default under section 194-IA because the property crossed fifty lakh. Was I obliged to deduct?
Four of us bought one flat and each of us paid under fifty lakh rupees. The TDS officer says we should have deducted under section 194-IA. Did we have to, and does the answer depend on when we bought?
Four of us bought jointly, each share under Rs 50 lakh — is 194-IA TDS due after the 2024 change?
The TDS officer says I should have deducted under section 194-IA on land I bought, and has applied twenty per cent under section 206AA because the farmer-sellers had no PAN. The land is agricultural. Does that answer the demand?
