CHIRIPAL INDUSTRIES LIMITED,AHMEDABAD vs. THE ITO, TDS CIRCLE, AHMEDABAD

The grounds raised by the Assessee read as under: “1. In law and on the facts and in the circumstances of the case, the order u/s 250 of the Act passed by the Ld. CIT(A) is bad in law and deserves to be quashed. In law and in the facts and circumstances of the case of the Appellant, the Ld. CIT(A) has erred in confirming the demand of Rs. 1,51,861/- for non-collection of TCS under section 206C(6A) when no liability to collect such TCS exists.

In law and in the facts and circumstances of the case of the Appellant, the Ld. CIT(A) has grossly erred in imposing the interest liability on the appellant u/s 206C(7) of the Act amounting to Rs. 1,24,526/ on account of alleged non-collection of TCS when no such interest liability is called for.” Relevant facts in brief are that the Assessee-company filed its original return of income on 30/10/2018 for the Assessment Year 2019-2020 declaring its total income of INR.8,24,940/-. During the survey actions conducted on the premises of Shri Mohit Mittal/Mittal Enterprise Ludhiana on 05/03/2020, it was found that the said persons/entities were engaged in the business of trading of yarn/cotton scrap & yarn and had made purchases from many entities on which tax was not collected at source. It was found that the Assessee has also sold yarn/cotton scrap amounting to INR.1,51,86,135/- (Rs. 27,81,670 + Rs. 1,24,04,465) and had not collected tax on such sales. Therefore, Order, dated 03/01/2025, was passed under Section 206C of the Act in the case of the Assessee raising demand of INR.2,76,387/- on the Assessee.

We have heard the Learned Departmental Representative and have

We find that the Learned CIT(A) had granted three opportunities to the assessee by issuing notice dated, 05/08/2025, 14/08/2025, and 22/08/2025. Since the Assessee did not file any submission, vide Order, dated 08/09/2025, the Learned CIT(A) dismissed the appeal preferred by the Assessee, observing that the Assessee was not interested in pursuing the appeal. Further, the Assessee had failed to bring on record any facts or supporting documents to controvert the findings returned by the Assessing Officer; since the Assessee had failed to discharge the burden of proof, the appeal preferred by the Assessee was dismissed. Bare perusal of the order impugned shows that the appeal was instituted on 30/07/2025 and the same was disposed on 08/09/2025. The three opportunities granted to the Assessee by the Learned CIT(A) was granted over a period of three weeks.

Further, on perusal of the Memorandum of Appeal in Form 35 filed before Learned CIT(A), we find that the Assessee had provided the following reasons for delay in filing of appeal before the Learned CIT(A): “The appellant most respectfully submits that although the impugned order passed by the Assessing Officer was received on the registered email ID of the appellant, the same was inadvertently overlooked and no further action could be taken within the prescribed time limit.

After taking into consideration the totality of the facts and circumstances and the nature of demand raised upon the Assessee by way of Order dated, 03/01/2025, passed under Section 206C of the Act, we are of the view that interests of justice would be served in case the aforesaid Order is set aside, and another opportunity is granted to the Assessee to make proper representation before the Assessing Officer.

In terms of paragraph 6 above, the appeal of the assessee is partly allowed.