IMPORTANT POINT
The court clarified that the transferee cannot be treated as an assessee in default for failing to deduct TDS in a sale deed executed by the court in execution of a decree.

The prayer in the writ petition is for a direction to respondents 1 to 6 to permit the petitioner to remit TDS in the name of the Sub Court, Thiruvalla, or to formulate an appropriate mechanism for receiving the TDS from the vendor/court by making necessary updation in the web portal and to register the sale certificate issued by the Sub Court, Thiruvalla.

2. Heard the Government Pleader and the standing Counsel for the Income Tax Department. Notice to the 7th respondent taken out through special messenger and she was served. She has however chosen not to appear in these proceedings.

3. The petitioner is the plaintiff/decree holder in OS No.95/2012 of Sub Court, Thiruvalla, filed for specific performance of an agreement and the 7th respondent is the judgment debtor. Ext.P1 produced along with the writ petition, is a copy of the decree. When the decree was not complied with, the petitioner filed an application for execution of the sale deed through the intervention of the Court. The draft sale deed was approved. The petitioner was directed by the Sub Court, Thiruvalla, to remit stamp duty before the 6th respondent. The petitioner submits that the 6th respondent directed the petitioner to deposit TDS equal to 1% of the value of the property (Rs.55,000/-), in the name of the 7th respondent, as is required under the provisions of the Income Tax Act. The 7th respondent was ex parte before the court below, and the petitioner does not know the PAN details of the 7th respondent and is not able to deposit the TDS. The petitioner filed Ext.P2 application before the Sub Court, seeking permission to remit TDS in the name of the Court, but the same is said to be dismissed. The petitioner submits that there is no provision in the e-treasury portal to receive TDS other than from the vendor. The writ petition is filed in the above circumstances.

4. Section 194-IA of the Income Tax Act, 1961 ('IT Act' for short), casts a duty on the transferee of immovable property to deduct tax at source, while making a payment to a resident transferor. The provision reads thus:

“194-IA. Payment on transfer of certain immovable property other than agricultural land.—

(1) Any person, being a transferee, responsible for paying (other than the person referred to in Section 194-LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum or the stamp duty value of such property, whichever is higher, as income tax thereon.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both, less than fifty lakh rupees.

(3) The provisions of Section 203-A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

Explanation.—For the purposes of this section,—

(a) “agricultural land” means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of Section 2;

(aa) “consideration for transfer of any immovable property” shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property;]

(b) “immovable property” means any land (other than agricultural land) or any building or part of a building.

(c) “stamp duty value” shall have the same meaning as assigned to it in clause (f) of the Explanation to clause (vii) of sub-section (2) of section 56.”

5. The responsibility to deduct the tax falls on the transferee, in this case, the petitioner herein. The amount deductible is 1%,