The Income Tax Appellate Tribunal’s Jodhpur Bench reportedly deleted a ₹1,12,500 penalty imposed on Jagadish Panchal after he failed to deduct tax at source on a joint ₹2.25 crore property purchase. Taxscan’s account says the seller disclosed the sale consideration and paid tax, Form 26A was furnished, and Panchal’s wife had already won relief in a related appeal. The ruling is a fact-specific outcome, not a general exemption from a buyer’s TDS obligations.
What did the ITAT decide?
In Jagadish Panchal v. Additional Commissioner of Income Tax (TDS), Udaipur, ITA No. 314/Jodh/2024, the Jodhpur Bench of the Income Tax Appellate Tribunal allowed Panchal’s appeal and deleted the ₹1,12,500 penalty under Section 271C, according to Taxscan’s report published on 6 October 2026. The decision is reported as 2026 TAXSCAN (ITAT) 1408 and dated 29 September 2026. The bench comprised Accountant Member Annapurna Gupta and Judicial Member T.R. Senthil Kumar. Taxscan’s case report is the available account; the underlying order has not been independently reviewed here.
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What happened in the property transaction?
Taxscan reports that Panchal, described as a non-resident, and his wife jointly bought immovable property from Daljeet Singh Bhandari on 25 June 2015 for ₹2.25 crore. The report says Panchal did not deduct ₹1,12,500 in TDS under Section 194-IA. The Assessing Officer imposed a penalty of the same amount under Section 271C, and the Commissioner of Income Tax (Appeals) upheld it.
The report also says Panchal was outside India for business and that the tribunal condoned a 329-day delay in his appeal. His explanation was that he had initially not appealed because his wife had received relief in relation to the same transaction.
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Why did the tribunal reportedly delete the penalty?
The seller’s tax reporting and Form 26A
According to the report, evidence in the wife’s related case included the seller’s return and Form 26A. The seller had disclosed the full consideration, computed capital gains, and paid the tax due. The report also says ₹14,626 interest was paid under Sections 201/201(1A), and that Form 26A had been filed.
The co-owner comparison
The tribunal reportedly found no material change between Panchal’s case and his wife’s case apart from Panchal being the other co-owner in the same transaction. Since relief had been granted in the wife’s related appeal, the tribunal applied that comparison and deleted Panchal’s penalty.
Taxscan attributes this sentence to the tribunal: “Thus, there is no tax evasion in the above said sale transaction. Further, the assessee also paid interest of Rs.14,626/- u/s 201/201(1A) of the Act.” Because the complete order was not available for independent review, the quotation and detailed reasoning should be understood as reported by Taxscan.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does a seller paying tax automatically remove a buyer’s TDS penalty?
This decision does not establish that rule. It concerns one appeal and the particular record described in the report: the seller’s disclosure and tax payment, Form 26A, interest payment, and the tribunal’s treatment of Panchal as the co-owner in his wife’s related case. The report does not establish that every buyer who fails to deduct TDS can avoid a penalty whenever the seller later reports the income or pays tax.
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Anyone assessing a similar dispute should check the complete tribunal order and the facts and documents of their own transaction. The report summarizes the outcome, but it does not provide a verified basis for treating the decision as a blanket compliance exception.
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