SOCIETE GENERALE,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX (TDS), CIRCLE 2(2), MUMBAI

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ITA 2218/MUM/2026Status: DisposedITAT Mumbai14 July 2026AY 2019-207 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal found significant procedural irregularities in the CIT(A)'s order, including the incorrect assessment year and dismissal for non-prosecution without proper adjudication. The tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication.

What were the facts?

The assessee's appeal before the CIT(A) for AY 2019-20 was dismissed for non-prosecution. The CIT(A) repeatedly referred to AY 2020-21, despite the assessee pointing out the error. The CIT(A) also failed to provide an independent reasoned order.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal due to procedural errors and lack of proper adjudication. Whether the CIT(A) violated principles of natural justice by not providing a proper opportunity to be heard and by referring to the wrong assessment year.

Which sections of the Income-tax Act were involved?

Section 201,Section 201(1A),Section 271C,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI PAWAN SINGH

For Appellant: Shri Anish Thackar
For Respondent: Shri Basavaraj Hiremath CIT DR a/w Shri Rajgopal Parthasarathi, SR
Hearing: 14/07/2026

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 29/12/2025 passed by the Ld. Additional /Joint Commissioner of Income-tax (Appeals)- Gurugram, for Assessment Year 2019-20, raising following grounds;-

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i. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding that the Appellant is an 'assessee in default' under the provisions of section 201 of the Act on the basis that the Appellant has not deducted taxes at source on the payments made by it to Clearing Corporation of India Limited amounting to INR 1,11,05,294. ii. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding that Appellant is an 'assessee in default' under the provisions of section 201 of the Act on the basis that the Appellant has not deposited taxes deducted at source amounting to INR 5,36,404 to the Indian Government treasury. iii. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding that the Appellant is an 'assessee in default' under the provisions of section 201 of the Act on the basis that the Appellant has not deducted taxes at source on the year-end provisions amounting to INR 1,30,90,877. iv. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in passing the impugned order without granting a final and effective opportunity of being heard to the Appellant, thereby violating the principles of natural justice. Accordingly, the impugned order is bad in law and is liable to be set aside. v. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in exhibiting an unwarranted haste in disposing of the appeal, especially when the matter was not time-barring, as the time-limit provided under section 250(6A) is only directory/discretionary and not mandatory. vi. On the facts and circumstances of the case and in law, the learned CIT(A) has erred dismissing the appeal in limine i.e., without considering the detailed Statement of Facts filed by the Appellant along with Form 35. vii. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding order of the learned TDS officer, without providing his reasons or findings to support the contention of the learned TDS officer. viii. On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in passing an order for AY 2020-21 (no appeal is pending for the said year) instead of AY 2019-20, despite the fact that the Appellant had

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specifically highlighted that the appeal under consideration pertains to AY 2019-20. ix. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding the levy of interest under section 201(1A) of the Act, amounting to INR 19,45,923 (computed on the alleged adjustments made by the learned TDS officer). x. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding the total demand (as computed by the TDS officer) at INR 1,39,21,548 instead of INR 46,86,663. xi. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding the initiation of penalty proceedings under section 271C of the Act.”

2.

At the outset, the learned counsel for the assessee invited our attention to a fundamental procedural irregularity apparent on the face of the impugned appellate order. It was submitted that although the present appeal arises out of the order passed under sections 201(1) and 201(1A) of the Act for Assessment Year 2019- 20, the learned CIT(A), while disposing of the appeal, has repeatedly referred to Assessment Year 2020-21, which was never the subject matter of the present appellate proceedings. It was further submitted that the notices issued by the learned CIT(A) under section 250 of the Act dated 14.07.2025 and 06.08.2025 also incorrectly mentioned Assessment Year as 2020-21. In response thereto, the assessee specifically brought to the notice of the learned CIT(A) that the impugned proceedings pertained to Assessment Year 2019-20 and not Assessment Year 2020-21. Despite this specific objection, the learned CIT(A) neither rectified

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the apparent mistake nor dealt with the assessee's objection, and ultimately proceeded to dispose of the appeal by observing that the assessee was not interested in prosecuting the appeal and by dismissing the appeal substantially for want of prosecution, while reproducing various judicial precedents relating to dismissal for non-prosecution.

3.

We have heard the rival submissions and carefully perused the material available on record. We find considerable merit in the grievance raised by the assessee. The record unmistakably reveals that the appeal before the learned CIT(A) pertained to Assessment Year 2019-20. It is equally evident that the assessee, in response to the notices issued during the appellate proceedings, specifically pointed out the error regarding the assessment year. Once such an objection had been brought to the notice of the appellate authority, it was incumbent upon the learned CIT(A) to first rectify the apparent mistake and thereafter adjudicate the appeal in accordance with law.

4.

We further find that the learned CIT(A) has proceeded on the premise that the assessee was not interested in prosecuting the appeal merely because no further written submissions on the merits were filed. Such an approach, in our considered opinion,

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does not accord with the statutory scheme governing appellate proceedings under the Act. The powers and duties of the Commissioner (Appeals) are quasi-judicial in nature. An appeal filed before the first appellate authority cannot be dismissed, either expressly or in substance, for non-prosecution. Even where the appellant fails to appear or does not file further submissions, the appellate authority remains under a statutory obligation to examine the grounds of appeal, consider the material available on record, evaluate the correctness of the order impugned before it, and render a reasoned decision on the merits of the controversy. The impugned order, however, instead of independently examining the issues raised by the assessee, primarily rests upon judicial precedents concerning dismissal for default and proceeds to affirm the order of the TDS Officer without recording any independent findings on the grounds urged before it.

5.

Equally significant is the fact that the impugned order itself repeatedly refers to an incorrect assessment year, notwithstanding the specific objection raised by the assessee during the course of appellate proceedings. Such an error goes to the very foundation of the adjudicatory process and creates a legitimate doubt as to whether the appeal has been examined with due application of mind. An appellate order must not only be legally sustainable but

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must also manifest conscious consideration of the issues arising in the particular assessment year under appeal. The impugned order, unfortunately, falls short of this requirement.

6.

In these circumstances, and without expressing any opinion on the merits of the additions or the grounds raised by the assessee, we are of the considered view that the interests of justice would be adequately served by setting aside the impugned order and restoring the matter to the file of the learned CIT(A) for fresh adjudication. The learned CIT(A) shall first take note of the correct assessment year, afford the assessee an effective and reasonable opportunity of being heard, consider the submissions and evidence that may be placed on record, and thereafter dispose of the appeal afresh by passing a speaking and reasoned order in accordance with law, dealing independently with each of the grounds raised by the assessee.

7.

The assessee is also directed to extend full cooperation in the fresh appellate proceedings and shall not seek unnecessary adjournments. It is made clear that if the assessee fails to avail the opportunities so granted, the learned CIT(A) shall be at liberty to decide the appeal on the basis of the material available on record, strictly in accordance with law.

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8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 14/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 14/07/2026 Z.U., P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER,

//True Copy// (Assistant Registrar) ITAT, Mumbai

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