INDIA STANDARD LOAN TRUST XLIX ,MUMBAI vs. ACIT, OSD TDS CIRCLE 1(2), MUMBAI

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ITA 817/MUM/2026Status: DisposedITAT Mumbai24 April 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The CIT(A) did not adjudicate the ground regarding the assessee being an 'assessee in default' but confirmed the interest levied under Section 201(1A). The Tribunal found that the first ground was not adjudicated and remitted the matter back to the CIT(A) for fresh decision.

What were the facts?

The assessee, a securitization trust, paid 'excess interest spread' without deducting TDS as required by Section 194LBC. The AO initiated proceedings under Section 201(1) and levied interest under Section 201(1A). The assessee appealed to the CIT(A), raising two grounds: being considered an 'assessee in default' and the levy of interest.

What were the issues?

Whether the assessee is liable as an 'assessee in default' for non-deduction of TDS, and whether the CIT(A) properly adjudicated all grounds of appeal.

Which sections of the Income-tax Act were involved?

Section 194LBC,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “C” BENCH : MUMBAI

Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI

BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER

ITA No. 817/Mum/2026 Assessment Year : 2019-20 India Standard Loan Trust XLIX Assistant Commissioner of IDBI Trusteeship Services Income-Tax, OSD, TDS Circle, Limited vs. 1[2], Mumbai Universal Insurance Building, MTNL Telephone Exchange Ground Floor, Sir P. M. Road, Building, Cumballa Hills, Pedder Fort, Mumbai 400001 Road, Mumbai 400026 PAN: AABT14793D (Appellant) (Respondent) For Assessee : Shri Saab Patel For Revenue : Shri V.S. Mahajan, Sr. DR Date of Hearing : 21-04-2026 Date of Pronouncement : 24-04-2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 29-11-2025, pertaining to Assessment Year (AY) 2019-20.

2.

During the course of hearing, the Ld. AR submitted that the assessee is the securitization trust, acting and controlled under the IDBI Trusteeship Services Limited. A survey u/s. 133A(2A) was conducted on

2 ITA No. 817/Mum/2026 India Standard Loan Trust, XLIX

22-12-2018 and during the course of survey, it was noticed that the assessee’s trust has paid a sum of Rs. 48,481,075.65/- under the head “excess interest spread” without deducting TDS in violation of the provisions of Section 194LBC of the Act. Thereafter, the proceedings u/s 201(1) were initiated and after calling for the necessary information and documentation and the submissions of the assessee which were considered but not found acceptable, the AO held the assessee in default in respect of non-deduction of TDS on EIS payment and further interest u/s 201(IA) was levied amounting to Rs. 534,481/- vide order passed u/s. 201(1)/201(1A) dated 31.01.2020.

3.

It was submitted that the assessee thereafter carried the matter in appeal before the Ld. CIT(A) and before the Ld. CIT(A), the assessee raised two specific grounds of appeal. The first ground of the appeal was against the assessee being considered as “assessee in default” for non-deduction of TDS and secondly, against the levy of interest u/s. 201(1A) of the Act. It was submitted that the Ld. CIT(A) has not disposed off the first ground of appeal and has only disposed off the second ground of appeal and held that the interest u/s. 201(1A) is compensatory in nature and the first proviso to section 201(1) doesn’t the liability towards the period of delay and levy of interest u/s 201(IA) of Rs. 534,481/-has been confirmed.

4.

In the aforesaid background, it was submitted that given that the Ld. CIT(A) appeal has not adjudicated the first ground of appeal, the matter may be remitted to the file of the Ld. CIT(A) to decide the same afresh after providing requisite opportunity to the assessee.

5.

The Ld. DR fairly submitted that the ground of appeal wherein the assessee has challenged its liability to deduct TDS and to be held as

3 ITA No. 817/Mum/2026 India Standard Loan Trust, XLIX

“assessee in default” has not been adjudicated by the Ld. CIT(A) and the Revenue has no objection where the matter is remitted to the file of the ld CIT(A).

6.

We have heard the rival contentions and perused the materials available on record. Admittedly, the assessee has raised specific ground of appeal before the Ld. CIT(A) challenging the findings of the AO wherein the assessee has been treated as “assessee in default” for non-deduction of TDS on EIS payments u/s 194LBC and the same has not been adjudicated by the ld CIT(A). In light of the prayer so made by the ld AR on behalf of the assessee and which has not been contested by the ld DR, we deem it appropriate to set aside the matter to the file of the Ld. CIT(A) to decide the said ground of appeal after providing requisite opportunity to the assessee.

7.

In light of the same, ground no. 2 of the assessee’s appeal is allowed for statistical purposes and other grounds of appeal are left open and not adjudicated upon.

8.

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

Order pronounced in the open court on 24-04-2026

Sd/- Sd/- (RAHUL CHAUDHARY) (VIKRAM SINGH YADAV) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated: 24-04-2026 Aditi Pandare, Private Secretary

4 ITA No. 817/Mum/2026 India Standard Loan Trust, XLIX

Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order

Dy./Asst. Registrar I.T.A.T, Mumbai

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