MAHABIR PRASAD AGARWALA,GUWAHATI vs. ACIT CIR-2, GUWAHATI

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ITA 422/GTY/2025Status: DisposedITAT Guwahati28 April 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, considering the assessee's prayer and in the interest of justice, decided to remit the issues back to the CIT(A) for fresh adjudication. The assessee was directed to provide substantiating documents.

What were the facts?

The assessee, a contractor, filed his return of income. A survey was conducted, leading to disallowances for non-deduction of TDS on contract payments and alleged under-disclosure of profit due to GST implementation. The CIT(A) confirmed these additions.

What were the issues?

Whether the disallowance of contract payments due to non-deduction of TDS was justified, and whether the addition for alleged under-disclosure of profit due to GST impact was correctly made.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 133A,Section 194C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI

Hearing: 27.04.2026Pronounced: 28.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI (VIRTUAL HEARING AT KOLKATA) SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 422/GTY/2025 Assessment Year : 2018-2019

Mahabir Prasad Agarwala, Vs. ACIT, Cir-2, 1 B Royal Silver Tower, Ulubari, Aayakar Bhawan, Lachit Nagar, Guwahati - Christian Bastal, 781007 Guwahati - 781005 [PAN: ACBPA7420P]

APPELLANT RESPONDENT

Assessee by : Sh. Sanjay Jain, FCA Revenue by : Sh. Santosh Kumar Karnani, Addl. CIT

Date of hearing : 27.04.2026 Date of Pronouncement : 28.04.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax, (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)], dated

2 ITA No. 422/GTY/2025 Mahabir Prasad Agarwala

15.10.2025, DIN & Order No. ITBA/NFAC/S/250/2025- 26/1081761657(1) on the following grounds of appeal:

“1. That the Honourable CIT(A) is not justified in confirming the addition of Rs. 10,60,860/- u/s 40(1)(ia) of 1T Act, 1961. 2. That the Honourable CIT(A) is not justified in confirming the 2 addition of Rs. 44,46,679/- on account of alleged under disclosure of profit without considering the facts of the case. 3. That the Honourable CIT(A) is not justified in confirming the addition of Rs. 44,46,679/- when no indiscriminatory documents were found in course of survey conducted at the business premises. 4. That the Honourable CIT(A) is not justified in disposing the grounds of appeal relating to giving the full credit of TDS/TCS without assigning any reason for the same. 5. That the AO is not justified in not giving the full credit of TDS/TCS as claimed in the return of income. 6. That the appellant craves leave to take add and/ OR alter any of the grounds of appeal on OR before the hearing of the appeal.” 2. Briefly stated the facts of the case are that the assessee is Class- One Contractor and engaged in the business of execution of Govt. contracts in the name and style of M/s Mahabir Prasad Agarwala. He filed return of income on 31.10.2018 declaring total income at Rs. 4,17,43,330/-. The case was selected for scrutiny under CASS. Consequent upon, survey u/s 133A of the Act conducted on 08.03.2018. Accordingly, notice u/s 143(2) of the Act was issued and served upon the assessee on 23.09.2019 and other statutory notices were issued to the assessee. The documents filed by the assessee were perused and as per the survey conducted upon the assessee on 08.03.2018 u/s 133A of the

3 ITA No. 422/GTY/2025 Mahabir Prasad Agarwala Act, the documents found the assessee disallowed the payment of Rs. 15,40,500/- made in cash u/s 40(a)(ia) of the Act. It was also noted that the assessee failed to make deduction on TDS amounting to Rs. 10,60,860/- which was paid towards contract expenses and agreed for disallowance u/s 40(a)(ia) of the Act. During the course of survey as per the questionnaire No. 14 and he also failed to add increase in net profit due to implementation of GST amounting to Rs. 1,35,00,000/- in his computation of incomes as admitted. During the course of survey as per the Questionnaire No. 16 on 08.03.2018 due to implementation of GST and the AO made also other addition. Accordingly, the income was assessed at Rs. 4,72,50,869/-.

3.

Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) noted that the assessee has not made TDS u/s 194C of the Act on payment of Rs. 10,60,860/- to Ramesh Singh, Contractor and the AO disallowed the said payment u/s 40(a)(ia) of the Act which was also considered by the assessee. During the course of survey u/s 133A of the Act on 08.03.2018 and he dismissed. The Ld. CIT(A) also dismissed the ground for making addition of Rs. 44,46,679/- on account of under disclosure of net profit due to impact of GST as considered during the course of survey on 08.03.2018.

4.

Aggrieved from the above order, assessee filed appeal before the ITAT.

4 ITA No. 422/GTY/2025 Mahabir Prasad Agarwala 5. The Ld. AR reiterated the submissions made before the lower authorities and strongly submitted that the submission made by the assessee has not been properly appreciated by the Ld.CIT(A) and requested that one more chance be given to the assessee before the Ld. CIT(A).

6.

On the other hand, the Ld. DR has no serious objection.

7.

Considering the rival submission and perusing the entire material available on record and the orders of authorities below. Here the dispute arises only on two issues, first regarding non deduction of TDS on payment made to Rakesh Singh and second on net profit due to impact on GST, considering the prayer of the assessee and in the interests of justice, we are remitting this issue back to the file of the Ld. CIT(A) for fresh adjudication and decide the issue as per law after giving a reasonable opportunity of being heard to the assessee. The assessee is directed to substantiate his case with cogent documents in support of his claim and not seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

8.

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

5 ITA No. 422/GTY/2025 Mahabir Prasad Agarwala Order pronounced on 28.04.2026. Sd/- Sd/- (George Mathan) (Laxmi Prasad Sahu) Judicial Member Accountant Member Dated: 28.04.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

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