TEAMPUMKIN CORPORATION,MUMBAI vs. INCOME TAX OFFICER (TDS)-2(3)(2), MUMBAI , MUMBAI

ITA 5318/MUM/2026Status: DisposedITAT Mumbai22 September 2026AY 2018-195 pages
AI SummaryDismissed

What were the facts?

The assessee, Teampumkin Corporation, filed appeals before the Income Tax Appellate Tribunal (ITAT) challenging orders passed by the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Years (AYs) 2018-19 and 2019-20. The appeals stem from penalty proceedings initiated under Section 271C of the Income Tax Act, 1961. For AY 2018-19, the penalty demand is Rs. 5,50,948/-, and for AY 2019-20, it is Rs. 1,64,379/-. The assessee failed to appear on multiple hearing dates and did not file any written submissions. The Assessing Officer (AO) had held the assessee in default under Section 201(1) for not deducting and depositing TDS under Sections 194C and 194J, levied interest under Section 201(1A), and initiated penalty proceedings under Section 271C. The CIT(A) had dismissed the assessee's appeals, sustaining the penalty.

What did the Tribunal hold?

The Tribunal dismissed the appeals filed by the assessee. The primary reason for dismissal was the assessee's failure to appear before the Tribunal on multiple occasions and the absence of any written submissions or corroborative details to support its grounds of appeal. Citing the Bombay High Court's decision in Chemipol vs. Union of India and the Supreme Court's decision in Nandramdas Dwarkadas, the Tribunal held that it is axiomatic that proceedings cannot be continued when the party who moved the court has not appeared. Furthermore, the Tribunal found no infirmity in the order of the CIT(A). The CIT(A) had held that the payment of the demand under Section 201(1)/201(1A) did not erase the original default in deducting TDS. The CIT(A) distinguished the assessee's case from the Supreme Court rulings in M/s. US Technologies International Pvt. Ltd. and Bank of Nova Scotia, stating that the assessee failed to deduct TDS itself, unlike cases involving belated remittance of deducted taxes. The penalty under Section 271C was sustained as the payment was made only after being deemed in default and not voluntarily. The Tribunal confirmed the CIT(A)'s decision for both assessment years.

What were the issues?

1. Whether the learned Officer erred in initiating penalty proceedings under Section 271C of the Income Tax Act, 1961, and raising a demand for AY 2018-19 (Rs. 5,50,948/-) and AY 2019-20 (Rs. 1,64,379/-), considering the assessee's argument that payment of the demand raised under Section 201(1)/201(1A) discharged its statutory obligation. Assessee's Contention: The assessee argued that by paying the demand raised under Section 201(1)/201(1A), it had discharged its statutory obligation, making the levy of penalty under Section 271C unjustified. The assessee relied on the Supreme Court ruling in M/s. US Technologies International Pvt. Ltd. and Bank of Nova Scotia. Revenue's Contention: The revenue contended that payment of taxes after receiving an order under Section 201(1)/201(1A) does not eliminate the consequences of the initial failure to deduct TDS. The penalty under Section 271C(1)(a) is attracted for failure to deduct tax as required by Chapter XVII-B. The CIT(A) noted that the payment was made after being deemed in default and was not a voluntary compliance, distinguishing it from the cited Supreme Court cases.

Which sections of the Income-tax Act were involved?

Section 271C,Section 201(1),Section 201(1A),Section 194C,Section 194J,Section 250,Section 273B

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI BIJAYANANDA PRUSETH

Hearing: 22.09.2026Pronounced: 25.09.2026

PER BIJYANANDA PRUSETH, AM:

These appeals filed by the assessee emanate from the orders passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre, Delhi dated 02.02.2026 for the assessment years (AY) 2018-19 and 2019-20. Both the appeals were heard together and a common order is passed

for the sake of convenience and brevity.

2.

The grounds of appeal raised by the assessee in ITA No.5318/Mum/2026

(AY 2018-19) are as under:

“1. On the facts and in the circumstances of the case and

The order continues below.

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