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Tax Publishers Jitendra Sharma v. JCIT [ITA Nos. 500 to 502/Ind/2018, dt. 14-10-2020] : 2020 TaxPub(DT) 4244 (Ind.-Trib.) Lower rate deduction of TDS on immovable property in case of non-resident -- Levy of penalty thereof *Facts:* Assessee along with two others purchased an immovable property for Rs. 75 lakhs from a seller who furnished his Indian address and current address as USA. Though the consideration individually was Rs. 25 lakhs TDS was done at 1% under section 194-IA and deposited as the overall consideration was over Rs. 50 lakhs. Subsequently revenue found out that the seller was a non-resident and TDS ought to have been done under section 195 and initiated proceedings under section 201(1)/201(1A) against the assessees. Before conclusion of the proceedings the assessees deposited the short fall of the TDS. Penalty proceedings were initiated under section 271C against the assessees and was upheld by the Commissioner (Appeals). On higher appeal - Held in favour of the assessee that they were not liable to penalty proceedings under section 271C. *Applied:* DCIT v. SMS India Ltd. (supra) (2006) 7 SOT 424 (Mum) : 2006 TaxPub(DT) 1053 (Mum-Trib), dated 30-11-2005. *Editorial Note:* It is virtually impossible for a buyer to make a roving enquiry especially when the transaction was finalized thru a broker as in the case of the assessee. Their application of section 194-IA on bona fide basis protected them on the downside anyways. It would have been better if the CBDT were to come up with a circular on this topic especially on rent being paid or transfer being effected with non-residents as to how and what type of TDS applicability insistence/checks and balances will need to be applied to the guidance of assessees.

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Jitendra Sharma v. JCIT [ITA Nos. 500 to 502/Ind/2018, dt. 14-10-2020] : 2020 TaxPub(DT) 4244 (Ind.-Trib.)

Lower rate deduction of TDS on immovable property in case of non-resident -- Levy of penalty thereof

Facts:

Assessee along with two others purchased an immovable property for Rs. 75 lakhs from a seller who furnished his Indian address and current address as USA. Though the consideration individually was Rs. 25 lakhs TDS was done at 1% under section 194-IA and deposited as the overall consideration was over Rs. 50 lakhs. Subsequently revenue found out that the seller was a non-resident and TDS ought to have been done under section 195 and initiated proceedings under section 201(1)/201(1A) against the assessees. Before conclusion of the proceedings the assessees deposited the short fall of the TDS. Penalty proceedings were initiated under section 271C against the assessees and was upheld by the Commissioner (Appeals). On higher appeal -

Held in favour of the assessee that they were not liable to penalty proceedings under section 271C.

Applied: DCIT v. SMS India Ltd. (supra) (2006) 7 SOT 424 (Mum) : 2006 TaxPub(DT) 1053 (Mum-Trib), dated 30-11-2005.

Editorial Note: It is virtually impossible for a buyer to make a roving enquiry especially when the transaction was finalized thru a broker as in the case of the assessee. Their application of section 194-IA on bona fide basis protected them on the downside anyways. It would have been better if the CBDT were to come up with a circular on this topic especially on rent being paid or transfer being effected with non-residents as to how and what type of TDS applicability insistence/checks and balances will need to be applied to the guidance of assessees.