The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), while disposing of a bunch of appeals, held that a builder cannot treat the purchase of multiple flats as a single transaction for the purpose of filing of TDS Statement.
The assessee company is engaged in the business of real estate construction and development. During the previous year relevant to the assessment year under dispute, the assessee entered into an agreement with M/s Accent Construction Pvt. Ltd. for purchase of ninety-six flats in three buildings for a consideration of Rs. 100,51,65,650. On the date of the allotment letter itself i.e., 29th October 2015, out of the total sale consideration, the assessee paid an amount of Rs. 55 crore to the assessee through cheque and while making such payment the assessee simultaneously deducted tax @ 1% under section 194IA of the Income Tax Act, 1961 amounting to Rs. 55 lakh. The TDS amount was deposited in Government account on29th September 2016 and upon such payment challan–cum– statements as required under section 200(3) of the Act was generated on the very same day in Form no.26QB. While processing the TDS statement under section 200A of the Act, the Assessing Officer found that TDS statements were not filed within the time prescribed under the statute levied fee under section 234E of the Act in respect of each TDS statement filed by the assessee.
On appeal, the Tribunal rejected the contention of the assessee that all the transactions relating to purchase of flats should be taken as a single transaction for the purpose of filing the TDS statement and computing fee under section 234E of the Act.
“We do not find any merit in such contention. On a perusal of the allotment letter dated 29th October 2015, a copy of which is placed in paper book and, more particularly, Annexure–B to the said letter reveals that the details and description of each of the flat along with cost thereof has been specifically mentioned. It is also a fact that the assessee has computed and deposited the TDS amount on the basis of the cost of each flat. In that view of the matter, the claim of the assessee that purchases of all the flats is to be taken as a single transaction, therefore, the levy of fee prescribed under section 234E of the Act is to be restricted to one challan–cum–statement filed in Form no.26QB, is unacceptable. When the assessee itself has filed separate TDS statements in respect of the tax deducted at source relating to the respective flats, while processing such statements under section 200A of the Act, the Assessing Officer has to levy fee under section 234E of the Act taking into account the delay in filing each of the statements. That being the case, assessee’s contention that fee under section 234E of the Act is to be restricted to one transaction is not acceptable. At this stage, it will be relevant to observe, clause (c) of sub–section (1) of section 200A of the Act contemplates that while processing the TDS return, fee under section 234E of the Act shall be computed. Thus, use of word “shall” in the aforesaid provision makes it mandatory on the part of the Assessing Officer to levy fee under section 234E of the Act. Since, the assessee has filed separate TDS statements under section 200(3) of the Act read with rule 26QB, there is no error on the part of the Assessing Officer in computing fee under section 234E of the Act while processing such statements,” the Tribunal said.
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