The Jaipur bench rules that procedural lapses in submitting Form 26A manually do not bar relief if the underlying tax has been paid, emphasizing substance over form in tax compliance.
The Jaipur bench of the Income Tax Appellate Tribunal has held that a taxpayer cannot be denied relief merely because Form 26A was filed manually rather than through the electronic system, so long as the underlying tax has already been paid by the seller. In the case of Rashmi Singh, the tribunal found that the defect was procedural, not substantive, and said that the first proviso to Section 201(1) of the Income Tax Act still applied.
Singh had bought immovable property worth ₹66,20,435 without deducting tax at source under Section 194-IA, prompting the assessing officer to treat her as an assessee in default and raise a demand of ₹1,15,194, including tax of ₹66,204 and interest of ₹48,990. The Commissioner of Income Tax (Appeals) upheld the demand, even though the seller had already discharged the tax liability and Singh had submitted a Chartered Accountant-certified Form 26A.
According to the tribunal, the only dispute was that the certificate had been filed offline, contrary to Rule 31ACB, which requires electronic submission. The bench said Singh had acted out of ignorance of the filing procedure and should not be penalised for that lapse. It therefore deleted the demand and allowed the appeal, reinforcing the view that procedural non-compliance should not override the substantive conditions for relief under Section 201(1). The decision also fits with the wider purpose of Form 26A, which is to show that the recipient of the payment has already reported the income and paid the tax due, preventing double recovery from the payer.
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