Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: AMIT SHUKLA & MS. PADMAVATHY S.
O R D E R PER : MS PADMAVATHY S. (AM)
This appeal is against the order of the National Faceless Appeal Centre (NFAC) [hereinafter ‘Ld.CIT(A)’] dated 14/11/2022 for the assessment year 2018-19. The assessee raised the following grounds of appeal:- Ground 1;
1. On the facts and circumstances of the case and in law, the Hon'ble Commissioner o1 Income-Tax (Appeals) (hereafter referred to as 'the CIT(A)') under the National Faceless Appeal scheme, erred in upholding the order of the Income Tax officer, TDS Ward 2(1)(3), Mumbai ('the AO') without giving an opportunity for the Appellant to make his submissions.
2 ITA 125/Mum/2023 M/s Rasean Trading Company Ltd 2. The Appellant prays that an adequate opportunity be given to the Appellant to make it submission. Without Prejudice to Ground No. 1 Ground 2:
1. 1. On the facts and circumstances of the case and in law, the Hon'ble C1T(A) erred in upholding the order of the AO, by that the Appellant is an 'assessee in default' u/s 201 (] of the Income Tax Act, 1961 ('the Act') for Rs. 5,10,97,581/- on the ground that th assessee has not paid the TDS without considering the fact that deductee/recipient ha already included the income received from appellant and paid the taxes thereon.
2. The appellant prays that he should not be treated as an assesseee in default as provide u/s 201(1) of the Act. Ground 3: On the facts and circumstances of the case and in law, the Ld. CIT(A) 1. erred in confirmii the order of the AO with respect to interest u/s 201 (1A) of the Act on the defai amounting to Rs. 2,52,93,303/- in consequence to above alleged defaults witho considering the fact that the deductees have already paid taxes due on their returm income and that the entire TDS was not due on 1st April, 2017.” The assessee is a company engaged in the business of trading in various goods and in the businesss as travel agent and tour operators. There was a spot verification proceedings under section 133B of the Act on 01/10/2019 and the Assessing Officer issued a notice under section 201(1)/201(1A) of the Income-tax Act, 1961 (in short, the Act) on the assessee requesting to furnish details with regard to the tax deducted for the year under consideration. During the course of spot verification, on perusal of trial balance, the Assessing Officer noticed certain balances outstanding on which tax was liable to be deducted. The Assessing Officer, therefore, requested the assessee to pay the outstanding demand as per the trial balance. There was no response from the assessee to the notice issued under section 201(1)/201(1A) of the Act and therefore, the Assessing Officer proceeded to treat the assessee as an assessee in default under section 201(1) and accordingly raised a demand of Rs.5,10,97,581/- under section 201(1) and interest of 3 ITA 125/Mum/2023 M/s Rasean Trading Company Ltd Rs.2,52,93,303/- under section 201(1A) of the Act. Aggrieved, assessee filed appeal before the CIT(A).
The assessee, before the Ld.CIT(A) did not make any further submission and, therefore, the Ld.CIT(A) decided the appeal based on the grounds filed and the material, that were available on record. In the grounds, the assessee had contended before the Ld.CIT(A) that all deductees are holding Permanent Account Numbers and tax paying assessees and hence, supposed to have paid tax on their income including on the income paid by the assessee, which is easily verifiable by the department. The assessee, in this regard, has relied on the case of Hindustan Cocoacola Ld (293 ITR 226) and the CBDT circular No.275 dated 29/01/1995. The Ld.CIT(A) held that onus is on the assessee to establish that adequate details and supporting evidences that of tax due have been paid by the deductees and in the present case, there was no attempt made by the assessee in this regard and that the assessee did not furnish any details or supporting materials. Accordingly, the Ld.CIT(A) confirmed the demand raised under section 201(1). With regard to the demand raised under section 201(1A), the Ld.CIT(A) held that 201(1A) is mandatory, therefore, the levy of interest was confirmed by the Ld.CIT(A).
Even before the Tribunal, none appeared on behalf of the assessee. Accordingly, the Bench heard the submissions from the Ld.DR and decided to adjudicate the matter based on the grounds and the material available on the records.
The Ld.DR submitted that the assessee has not appeared before the lower authorities and has not furnished any details to support the claim that the payees
4 ITA 125/Mum/2023 M/s Rasean Trading Company Ltd have included the income and have paid taxes on the same. There was no co- operation on the assessee’s side and, therefore, the Ld.DR prayed that the demand be confirmed.
We notice that the Assessing Officer has raised the demand under section 201(1)/201(1A) based on the spot verification. It was noticed that during spot verification, the director of the company appeared and requested for grant of instalments of payment of TDS and had also submitted that Rs.1 crore would be paid by the first week of November, 2020. It is also noticed that the Assessing Officer had given a finding that inspite of lapse of time requested for no payment has been made by the assessee. Therefore, the Assessing Officer had proceeded based on spot verification.
We further notice that the assessee did not appear before the first appellate authority also and no further details were filed. From the perusal of records, there is no details available to show whether the assessee has paid TDS subsequently or whether the payees have included the income in their tax returns or not. These details were not verified by the lower authorities also since there was none appeared on behalf of the assessee before the lower authorities. Therefore, in the interest of justice, we give one more final opportunity to the assessee to substantiate the claim raised in the grounds of appeal and accordingly, set aside the order of the Ld.CIT(A) and restore the issue back to the Assessing Officer for de novo verification of all the relevant details. The Assessee is directed to submit the details of payment of TDS or the evidence that the payees have included the amount in their income and paid taxes on the same and co-operate with the proceedings. It is ordered accordingly.
5 ITA 125/Mum/2023 M/s Rasean Trading Company Ltd
In the result, appeal is allowed for statistical purpose.
Order pronounced in the open court on 08/05/2023.