Father gets IT notice for selling ancestral land jointly with son - how he won case

Selling associated property? Be cautious of the taxation implications, TDS deductions, and however it needs to amusement up successful your income taxation returns. Each beneficiary has to support an oculus connected taxation implications, calculations of superior gains and TDS erstwhile filing their income taxation return.One specified lawsuit wherever an income taxation announcement issued a father-son duo jointly selling their ancestral onshore for Rs 13 crore. The purchaser erroneously deducted the full TDS magnitude of Rs 13 lakh solely nether the father's name, alternatively of splitting it arsenic betwixt some parties astatine Rs 6.5 lakh each. The lad decently declared his Rs 6.5 crore stock successful his income taxation instrumentality and settled the required taxes without taking immoderate TDS credit.The begetter submitted his income taxation instrumentality belatedly nether Section 139(4) of the Income Tax Act, 1961 connected December 28, 2022 for AY 2022-23, declaring a full income of Rs. 2.76 crore (2,76,47,210).In AY 2022-23, the jointly-owned ancestral onshore was sold for Rs 13 crore (13,00,00,000), with each enactment receiving Rs 6.5 crore (Rs 6,50,00,000). The purchaser withheld the implicit TDS nether Section 194A astatine 1%, totalling Rs 13,00,000, exclusively nether the father's name.

Subsequently, the begetter claimed the full TDS magnitude that was deducted and credited to his relationship arsenic displayed successful Form 26AS, amounting to Rs 13,00,000.

Sale of ancestral property: Tax and LTCG issues

According to an ET report, successful this lawsuit the agelong word superior summation (LTCG) calculation was based connected the adjacent organisation of the merchantability information astatine Rs 6.5 crore (6,50,00,000).The son's ITR included his Rs 6.5 crore (6,50,00,000) stock without immoderate TDS recognition claim.

This discrepancy triggered a defective ITR notice, arsenic the gross receipts shown successful Form 26AS exceeded the full receipts declared nether each income heads for which TDS recognition was claimed successful the submitted return, the ET study said.The genitor submitted a reply to the notice, declaring that, "the income fig was incorrectly reported successful the SFT instrumentality doubly and truthful worth appears to beryllium Rs 26 crore. The said onshore is proportionately distributed betwixt the assessee (him) and his lad successful the ratio of 1:1.

The full merchantability information was Rs 13 crore, i.e. Rs 6.5 crore each. Accordingly, portion filing ITR, the superior gains connected merchantability of onshore is shown successful the ITR of assessee and his lad successful ratio of 1:1 and paid the taxation liability owed thereon.

"Subsequently, the taxation authorization issued an intimation bid nether Section 143(1) connected February 27, 2023, accepting the income arsenic declared successful the archetypal ITR but refusing the proportionate TDS recognition of Rs 6.5 lakh (6,50,000) and computed involvement nether Sections 234A, 234B and 234C accordingly.The genitor submitted a revised ITR connected March 3, 2023, claiming implicit TDS recognition of Rs 13 lakh (13,00,000) and declared gross receipts of Rs 6.5 crore (6,50,00,000) nether "Income transferred to others" against his son's PAN.The taxation authorization ignored some the effect and revised ITR, issuing a rectification bid nether Section 154 connected March 3, 2023. Whilst accepting the income arsenic per ITR, they denied the proportionate TDS recognition of Rs 6.5 lakh (6,50,000) and calculated involvement nether Section 234A, 234B and 234C.Aggrieved by the rectification order, the begetter appealed to JCIT(A). After JCIT(A) rejected the entreaty and maintained lone the proportionate TDS credit, helium approached the Income Tax Appellate Tribunal (ITAT) Pune. He yet won the lawsuit astatine ITAT Pune connected September 22, 2025.

Ancestral spot merchantability TDS taxation notice: How did the begetter triumph the case?

ITAT Pune issued its ruling (ITA No.722/PUN/2025) connected September 22, 2025, noting that according to the father's representative, the TDS was incorrectly allocated wholly to the father's PAN, arsenic shown successful Form 26AS, the ET study said.The spot purchaser mistakenly applied the full TDS nether the father's name, alternatively than splitting it proportionally betwixt the begetter and his son.The lad included his information of income successful his ITR and fulfilled his taxation obligations without seeking TDS credit. The father's typical highlighted Section 199(1) work with Rule 37BA of the Income Tax Rules, 1962, stating that erstwhile TDS is deducted and deposited nether a deductee's sanction (the assessee successful this instance), it should beryllium credited to that individual.The ITAT Pune followed the precedent acceptable by iGate Infrastructure (ITAT Bangalore) whilst delivering judgement successful favour of the father.The counsel representing the begetter contended that his lawsuit ought to person the full TDS recognition that the onshore purchaser had deducted successful his name. The statement emphasised that an mistake by the deductor should not disadvantage the deductee's close to claim.The father's counsel referenced rulings from some the Bangalore Income Tax Appellate Tribunal successful iGate Infrastructure Management Services Ltd.

and the Pune Tribunal successful Anil Ratanlal Bohora, arguing that administrative errors should not invalidate cardinal rights, justifying the father's assertion to the implicit Rs 13 lakh (13,00,000) credit.ITAT Pune noted: "We find immoderate unit successful the arguments precocious by the Ld. AR (father's representative). The Revenue cannot enrich itself astatine the outgo of the assessee."ITAT Pune further stated: "The Bangalore Tribunal successful iGate Infrastructure Management Services Ltd.'s

case nether the akin acceptable of facts arsenic that of the assessee (father) successful the contiguous case, has acceptable speech the substance to the record of the Assessing Officer to adjudicate the contented afresh aft making indispensable verification arsenic to whether the deductor has deducted the TDS and deposited the aforesaid successful the Government Account and if yes, let the recognition of the TDS to the assessee.

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What does the ruling mean for you?

Mitesh Jain from Dentons Link Legal told ET: "This is simply a invited ruling for the taxpayers arsenic it protects them from being unreasonably penalized for errors made by deductors and re-emphasis the rule that if TDS has been deposited with the government, the recognition indispensable beryllium granted to the taxpayer.

This ruling would beryllium adjuvant successful genuine cases wherever TDS claims are disputed by taxation authorities connected relationship of mismatch successful income arsenic per Form 26AS and income arsenic per instrumentality of income, if the payer has duly offered the income successful the instrumentality of income and TDS recognition is appearing successful Form 26AS.

"Chartered Accountant Prakash Hegde said: "This lawsuit is simply a premier illustration of however a insignificant oversight tin spiral into prolonged and unnecessary litigation, draining the clip and resources of the mean taxpayer.

While income taxation rules rightly necessitate TDS and its corresponding gross income to beryllium reconciled, the pedantic and inflexible attack of the Centralized Processing Centre (CPC) is creating a surge successful avoidable disputes.

This rigidity forces taxpayers into a lengthy appeals process earlier the Commissioner of Income Tax and the Income Tax Appellate Tribunal, adjacent for issues a elder authorization could easy verify and conclude. Consequently, the invaluable clip of some taxpayers and judicial authorities is squandered connected purely procedural matters."