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Facts
The assessee firm filed its return of income. The case was selected for scrutiny due to non-deduction of TDS on substantial business purchases. The AO made an addition/disallowance for business expenditure where TDS was not deducted. The CIT(A) upheld the addition and made it an ex-parte order as the assessee was non-compliant.
Held
The Tribunal restored the issue back to the CIT(A) to provide the assessee with another opportunity to present its case, adhering to natural justice principles and interest of justice dispensation.
Key Issues
Whether the assessee was prevented by sufficient cause from appearing before the CIT(A) and providing details, and if another opportunity should be granted.
Sections Cited
194Q, 274, 271AAC, 154, 234A, 234B, 234C, 270A, 143(1), 143(3), 144B, 40(a)(ia), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘F‘ BENCH
आदेश / O R D E R PER KAVITHA RAJAGOPAL (J.M): This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals), Mumbai (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act) relevant to Assessment Year (‘A.Y.’ for short) 2023-24. 2. The assessee has raised following grounds of appeal:-
1. 1. Jakhad Enterprise LLP 1) The Ld. CIT(A) erred in confirming the disallowance of Rs. 18,76,18,728/- being 30% of the business purchase as Rs. 62,53,95,763/- on the grounds that TDS u/s 1940 was not deducted and thereby added the same to the total Income of the Assessee. The Ld CIT(A) erred in initiating penalty proceedings u/s 274 r.w.s 271AAC of the income tax act 2) The Ld. CIT(A) erred in considering the consideration of the returned income as Rs. 3,40,91,610/- which was the actual returned income there not considering the rectification order u/s 154 dated 27/5/2024 3) The Ld CIT(A) erred in charging Interest under section 234A,234B and 234C of the Income Tax Act 1961 4) The Ld CIT erred in initiating penalty proceeding under section 270A r.w.s 270A(9)(e) of the income tax act 1961.
3. The brief facts are that the assessee firm had filed its return of income on 30/09/2023 for the year under consideration declaring total income at Rs.3,40,91,610/- and the same was processed u/s.143(1) of the Act by CPC and vide intimation dated 09/01/2024, the assessee’s total income was determined at Rs.4,90,91,610/- with a tax liability of Rs.12,52,190/-. The assessee’s case was subsequently selected for scrutiny under CASS on the issue of substantial business purchases for which no TDS was deducted u/s.194Q of the Act. The ld. AO thereby determined the total income at Rs.23,67,10,338/- vide assessment order dated 21/01/2025 passed u/s.143(3) r.w.s. 144B of the Act on the ground that inspite of several opportunities, the assessee had failed to furnish details pertaining to the issue raised by the ld. AO thereby, making an addition/disallowance u/s.40(a)(ia) of the Act towards Jakhad Enterprise LLP business expenditure for which no TDS was deducted amounting to Rs.18,76,18,728/-.
4. Aggrieved, the assessee was in appeal before the First Appellate Authority who vide order dated 30/07/2025 upheld the addition/disallowance made by the ld. AO vide an exparte order on the ground that the assessee was non-compliant. The assessee is in appeal before us challenging the order of the ld. CIT(A).
We have heard rival submissions, perused the materials available on record. The ld. AR for the assessee contended that the ld. CIT(A) has confirmed the disallowance of Rs.18,76,18,728/- being 30% of the business purchase amounting to Rs.62,53,95,763/- on the ground that the assessee has failed to deduct TDS u/s.194Q of the Act.
The ld. AR further contended that assessee was prevented by sufficient cause in not appearing before the ld. CIT(A) and thereafter, for furnishing of the details pertaining to the assessee’s claim. The ld. AR prayed that the assessee be given one more opportunity to present its case before the ld. CIT(A).
The ld. DR opposed to the same and relied on the order of the lower authorities.
It is observed that the assessee has been non-compliant before the First Appellate Authority and even before the ld. AO the complete details pertaining to the assessee’s claim was not furnished by the assessee. The ld. CIT(A) vide an exparte order had upheld the addition / disallowance made by the ld. Jakhad Enterprise LLP AO. On considering the submission of the ld. AR, we deem it fit to restore this issue back to the file of the ld. CIT(A) in order to extend the assessee with one more opportunity to present its case before the First Appellate Authority by adhering to the principles of natural justice and also in the interest of justice dispensation. The assessee is directed to strictly comply with the proceedings before the First Appellate Authority without any undue delay from its end and the ld. CIT(A) is directed to decide the issue on the merits of the case based upon the submissions of assessee and if need be call for remand report from the ld. AO in order to decide the issue in hand on the merits and in accordance with law.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 26th September, 2025.