SAFE AND SURE MARINE SERVICES PRIVATE LIMITED,MUMBAI vs. ITO (TDS), WARD 8(1)(1), MUMBAI, MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT () & SHRI ANIKESH BANERJEE () Assessment Year: 2013-14
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated
26.03.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 1, Ahmadabad [in short ‘the Ld. CIT(A)’] in faceless proceedings for assessment year 2013-14, raising following grounds:
Non-De Should the app and no include AO an Section was n 26A a Tribun should Coca C - Dedu paid b 08.07.2 benefit 2. TDS No the exp capital claimed require Law: IT ITAT-D ITAT M TDS on not rou 3. Disallo Verifica not cro portal examin and m Suppor Pvt. L suspici 4. The ap substit of app such a be dee 2. At the outset, hearing through reg nor was any adjourn Safe And Sure M ITA eduction of TDS on Director's Remunera d Be.Granted in View of Proviso to Section pellant had paid director remuneration o o TDS was deducted. However, the di ed this amount in their ITs and paid du nd CIT(A) denied benefit under the 2nd n 201(1) solely on technical ground tha not filed. The appellant undertakes to f along with director tax proof before al, and accordingly, the demand under S d be deleted. 2 Supported by Law: SC i Cola Beverage Pvt. Lid. v. CIT (2007) 293 uctor cannot be treated as assessee-in-d by deductee. CBDT Circular No. S/2 2013 - Form 26A may be submitted p t . ot Deducted on Capitalized Expenses- No penses on which TDS was alleged not de lized (not debited to P&L), and no d in that year. It is a settled law that ed WHARE no deduction is claimed. 7 S ITAT Delhi in ACIT v. Venus Projects (201 DEL) - TDS not required on capitalized Mumbai in Navin Bharat Industries Pvt. n capitalized payments cannot be enfor uted through P&L. owance Based on Presumptions and W ation with ITR, Form 26AS, OR Portal Tha oss-check Form 26AS, ITs of directors, OR records before raising demand. CIT(A) a ne filed audit report available in income made assumptions that are factually rted by Law: ITAT Delhi in ACIT v. Ma Ltd. [2014]-AO cannot make addition ion without independent verification. ppellant craves leave to add, alter, ame tute OR DLEETE all OR any of the forego eal at the time of hearing OR thereafler additional written submissions OR evide med necessary in the interest of justice. it is noted that despite servi gistered post, neither did the a nment application filed. The no Marine Services Pvt. Ltd 2 A No. 4566/MUM/2025 ation - Relief n 201(1) That of ?27 lakhs irectors have ue taxes. The d proviso to at Form 26A furnish Form the Hon'ble Section 201(I) in Hindustan ITR 226 (SC) default if tax 2013 dated post-facto for ot Liable That educted were income was t TDS is not Supported by 10-TIOL-348- expenditure. Ltd. [2020] - rced WHARE Without Cross at the AO did R income-tax also failed to e tax system y incorrect.? arubeni India n based on end, modify, oing grounds r, and to file ence as may Ground ice of notice of assessee appear otice was issued on 24 July 2024 and the lapse of more th General Clauses Act, is deemed to have addressed, prepaid a the assessee is deeme 2.1 In these circu entered, the Bench interested in prosecu with ex parte qua subsequently filed w appeal is being a arguments of the le written submissions record. 3. Ground No. 1 c the footing that the a demonstrating that liability, was not c assessee as an asses the expenditure in qu obligation to deduct ancillary and relate Safe And Sure M ITA d has not been returned undeliv han one month. In terms of se , 1897, service of notice sent by been effected when the let and posted. Accordingly, service ed to have been completed. mstances, and no appearanc formed the view that the a uting the appeal, and the matter the assessee. However, sinc written submissions on the iss adjudicated ex parte after c earned Departmental Represent of the assessee, and the mat challenges the finding of the lea assessee’s request for furnishing the payees had already disch considered, thereby erroneous see-in-default. Ground No. 2 ra uestion was capital in nature, a tax at source arose. Ground N to the same overarching issue Marine Services Pvt. Ltd 3 A No. 4566/MUM/2025 vered even after ection 27 of the y registered post tter is properly e of notice upon ce having been assessee is not r was proceeded e the assessee sues raised, the considering the tative (DR), the terial placed on arned CIT(A) on g Form No. 26A, harged their tax ly treating the aises a plea that and therefore no Nos. 3 and 4 are e relating to the assessee’s alleged de at source. 4. he Assessing O tax audit report, not source on directors’ r to four persons, all 40A(2)(b) of the Act. 4.1 The Assessing contractors and pro ₹2,96,300/- respectiv and 194J. The asses been capitalised, an The Assessing Officer liable under sections 4.2 It was further n certain payments, Government account . In aggregate, tax sections 201(1) and 2 5. On further appe assessee did not file Safe And Sure M ITA efault in non-deduction or non- Officer, on examination of the r ted that the assessee had not d remuneration aggregating to ₹2 l of whom fell within the am Officer further observed tha ofessionals amounting to ₹63 vely attracted deduction under ssee contended that the said e d therefore TDS provisions we r rejected this contention and he 201(1) and 201(1A). noted that although tax had be the same had not been de , resulting in a further demand liability of ₹41,05,290/- was 201(1A). eal, Despite issuance of sever e any submissions before the Marine Services Pvt. Ltd 4 A No. 4566/MUM/2025 -payment of tax records and the deducted tax at 5,00,000/- paid mbit of section at payments to 3,62,006/- and r sections 194C expenditure had ere inapplicable. eld the assessee een deducted on eposited in the of ₹33,61,947/- s raised under ral notices, the learned CIT(A).
Consequently, the ap
Assessing Officer wer
“6.1.1. The a grounds of ap material avail available to p raised 4 grou deducted tax confirmed fro the deductees part it has re
Allahabad Hig furnish form have paid the of Sahara Ind being amount
AO has corre claim that ex capitalized. I appellant. Eve be deducted o correctly on deposited tax copy of audit the TDS. In th and a certific appellant has no force in the case. Therefo allow any rel the appellant to 4 is dism
6. We have carefu
DR as well as the wri has argued that the failed to consider the relief where the dedu the relevant sum in Safe And Sure M
ITA ppeal was dismissed, and the re upheld in the following terms available material on record is verified ppeals and statement of facts. After con lable on record, it is seen that no sufficien provide any relief to the appellant. The A unds of appeal. It is seen that the appel x on remuneration paid to the directors.
om the audit report. The appellant has s have paid the taxes on this income. For elied on decision in case of Sahara India igh Court. The appellant was specifically no 26A to verify the contention that th e tax. The question of applicability of dec dia does not arise. The case of director i t paid by deductor relates to remuneratio ectly raised demand on this issue. The xpenses relating to demand of Rs.317
In this respect the say was called f en if the expenses are capitalized the TD on this amount. Therefore, AO has raised this issue. It is seen that the appella x of Rs.3361947/-. Now the appellant ha t report and claimed that there is no nee his respect details were called for from t cate from Auditor was also called for. H s failed to furnish the information. Theref e claim that no TDS is requires to be ded ore, under such circumstances it is not ief to the appellant. Therefore, the relief t and action of AO TDS is confirmed. G missed.”
ully considered the submissions itten submissions of the assesse lower authorities misread the a e second proviso to section 201( uctee has furnished a return o nto account, and paid the due
Marine Services Pvt. Ltd
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A No. 4566/MUM/2025
findings of the :
d along with nsidering the nt material is Appellant has llant has not This fact is claimed that r the interest a by Hon'ble requested to he deductees cision in case is not of loss on. Therefore, e appellant's
7643/- were for from the DS requires to d the demand ant has not as furnished ed to deduct the appellant
However, the fore, there is ducted in this t possible to is granted to Ground no 1
s of the learned ee. The assessee audit report and 1), which grants f income, taken e tax. It is also contended that the speaking and mecha default has been rep
Assessing Officer ha into perverse conclus
6.1 Since the princi the applicability of th necessary to examine
(emphasis supplied e
“Consequences of fai
12 201. 13[(1) Where an (a)
(b) does not deduct, or do part of the tax, as req prejudice to any other see in default in respec
14[Provided that any who fails to deduct provisions of this C credited to the acco in default in respect
(i) has furn
(ii) has tak return o
(iii) has pa return and the person furn such form as may be Provided 17[further] t person, unless the Ass sufficient reasons, has Safe And Sure M
ITA order passed by the learned anical. He submitted that no s orted in column 18 of tax audit as miss-interpreted the audit r sion.
ipal contention of the assessee he second proviso to section 20
e the statutory framework. The externally) has been reproduced ilure to deduct or pay. 11
ny person, including the principal officer of a c who is required to deduct any sum in accor of this Act; or referred to in sub-section (1A) of section employer, oes not pay, or after so deducting fails to pay quired by or under this Act, then, such pers consequences which he may incur, be deem ct of such tax:
y person, including the principal office the whole or any part of the tax in acco
Chapter on the sum paid to a 15[payee]
ount of a 15[payee] shall not be deemed to t of such tax if such 15[payee]- nished his return of income under section ken into account such sum for comput of income; and aid the tax due on the income declared of income, nishes a certificate to this effect from a e prescribed 16:]
that no penalty shall be charged under secti sessing Officer is satisfied that such person, w s failed to deduct and pay such tax.]
Marine Services Pvt. Ltd
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A No. 4566/MUM/2025
CIT(A) is non- such remark or t report and the report resulting revolves around
1(1), it becomes relevant proviso as under:
company,- rdance with the provisions n 192, being an y, the whole or any son, shall, without ed to be an asses- r of a company, ordance with the ] or on the sum o be an assessee n 139; ting income in such by him in such an accountant in ion 221 from such without 18good and 19[(1A) Without prejud principal officer or com whole or any part of t under this Act, he or it (i) at one p from the is deduc
(ii) at one a of such which su and such interest sha the provisions of sub-s
21[Provided that in cas to deduct the whole o
Chapter on the sum p
22[payee] but is not de sub-section (1), the int such tax was deduct
22[payee]:]
23[Provided further t default under sub-sect with such order.]
(2) Where the tax has n the tax together with t
(1A)] shall be a charge may be, referred to in s
25[ 26[(3) No order sha assessee in default fo person, at any time af which payment is mad year in which the corr section (3) of section 20
(4) The provisions of Explanation 1 to sectio sub-section (3).]
30[Explanation.-For the have the meaning assi
6.2 A perusal of th assessee who fails to an assessee in defaul
1. furnished a retu
Safe And Sure M
ITA ice to the provisions of sub-section (1), if an mpany as is referred to in that sub-section do the tax or after deducting fails to pay the tax shall 18 be liable to pay simple interest,- per cent for every month 20 or part of a month e date on which such tax was deductible to th cted; and and one-half per cent for every month or part tax from the date on which such tax was uch tax is actually paid, all be paid before furnishing the statement in section (3) of section 200:]
se any person, including the principal officer r any part of the tax in accordance with the paid to a 22[payee] or on the sum credited to eemed to be an assessee in default under t terest under clause (i) shall be payable from tible to the date of furnishing of return of that where an order is made by the Assess tion (1), the interest shall be paid by the per not been paid as aforesaid after it is deducted the amount of simple interest thereon referred e upon all the assets of the person, or the com sub-section (1).
all be made under sub-section (1) deeming a r failure to deduct the whole or any part of t fter the expiry of six years] from the end of th de or credit is given 28[or two years from the e rection statement is delivered under the 29[fir
00, whichever is later].]
f sub-clause (ii) of sub-section (3) of sec on 153 shall, so far as may, apply to the time e purposes of this section, the expression “
igned to it in the Explanation to sub-section (2
(emphasis sup he proviso makes it abundantl deduct tax at source shall not b lt provided the payee has:
urn of income under section 139
Marine Services Pvt. Ltd
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ny such person 18, oes not deduct the x as required by or on the amount of such tax he date on which such tax of a month on the amount deducted to the date on n accordance with of a company fails e provisions of this o the account of a the first proviso to the date on which f income by such sing Officer for the rson in accordance d, 24[the amount of d to in sub-section mpany, as the case a person to be an the tax from 27[any he financial year in end of the financial rst] proviso to sub- ction 153* and of limit prescribed in “accountant” shall 2) of section 288.]”
pplied externally) ly clear that an be deemed to be 9;
taken the sum i and 3. paid tax due on 4. the deductor fu certified by an a 6.3 The learned CIT Form No. 26A was fu is factually correct. 6.4 Before us, how expressed its willing support of its claim filed their return of statutory benefit, the cause serious prejudi 6.5 In the interests mandate of the provi set aside the order o the file of the Assess the assessee to furni accordance with law. 6.6 Accordingly, Gr Since the matter ha Safe And Sure M ITA in question into account in com such income, and urnishes a certificate in Form accountant. T(A) has recorded a categorical urnished before him. To this ext wever in written submission, th gness to furnish the requisit that the deductees have alread income. Since the assessee s e denial of an opportunity at th ice. of substantial justice, and havi iso to section 201(1), we deem i of the learned CIT(A) and restor sing Officer for the limited purp ish Form No. 26A and for fresh round No. 1 is allowed for stati as been restored to the Asses Marine Services Pvt. Ltd 8 A No. 4566/MUM/2025 mputing income; No. 26A, duly finding that no tent, the finding he assessee has te certificate in dy paid tax and seeks to avail a his stage would ng regard to the it appropriate to re the matter to pose of enabling adjudication in stical purposes. ssing Officer for verification of the a section 201(1), the r require no separate a 7. In the result, th statistical purposes Order pronoun (ANIKESH BA JUDICIAL M Mumbai; Dated: 16/12/2025 Rahul Sharma, Sr. P.S.
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
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Safe And Sure M
ITA assessee’s claim under the sec remaining grounds have become adjudication.
he appeal of the assessee is par in the terms indicated hereinab ced in the open Court on 16/
-
S
ANERJEE)
(OM PRAK
MEMBER
ACCOUNTA ded to :
BY ORDER
(Assistant Re
ITAT, Mu
Marine Services Pvt. Ltd
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A No. 4566/MUM/2025
cond proviso to e academic and rtly allowed for bove.
12/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai