M/S DOUBLE TREE BY HILTON HOTEL,AGRA (A UNIT OF ARCHER HOSPITALITY PRIVATE LIMITED),AGRA vs. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) KANPUR, KANPUR

ITA 470/AGR/2026Status: DisposedITAT Agra22 October 2026AY 2016-1715 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was sufficient cause to condone the delay of 207 days in filing the appeal, acknowledging the procedural and jurisdictional complexities faced by the assessee. The Tribunal relied on Supreme Court pronouncements for a pragmatic and liberal interpretation of 'sufficient cause', emphasizing substantial justice over technical considerations. Regarding the penalty, the Tribunal found that the assessee had a reasonable cause for the failure to deduct tax at source. This was based on the assessee's bonafide belief regarding the non-deductibility of TDS on commission payments and the disruption in working due to frequent changes in key accounting positions, leading to inadvertent oversights. The Tribunal referred to the Supreme Court's decision in CIT, New Delhi vs. Eli Lilly & Co. (India) (P.) Ltd., which held that penalty under Section 271C shall not be imposed if the assessee proves a reasonable cause for the failure, as per Section 273B. Consequently, the Tribunal held that the levy of penalty under Section 271C was not sustainable and deleted the penalty of Rs. 80,753/-. The first ground of appeal was allowed, and other grounds were left undecided as academic.

What were the facts?

The assessee, M/s Double Tree by Hilton Hotel, filed an appeal against an order passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi, which had dismissed the assessee's appeal. The appeal before the ITAT was filed beyond the period of limitation, delayed by 207 days. The delay was attributed to procedural and jurisdictional issues, including the initial filing before the wrong bench of the ITAT and subsequent transfer. The core of the dispute arose from a TDS survey conducted on March 3, 2020, leading to an order under Section 201(1)/201(1A) for the Financial Year 2015-16. This resulted in a demand for short deduction of tax and interest, and subsequently, a penalty under Section 271C was imposed by the Additional CIT (TDS), Kanpur, amounting to Rs. 80,753/-.

What were the issues?

1. Whether there was sufficient cause to condone the delay of 207 days in filing the present appeal before the Tribunal, considering the procedural and jurisdictional hurdles encountered by the assessee? (Question of fact and law) 2. Whether the penalty of Rs. 80,753/- imposed under Section 271C of the Income Tax Act, 1961, for failure to deduct tax at source on commission expenses and professional fees for FY 2015-16, is sustainable? Assessee's contentions: - The delay was caused by genuine procedural and jurisdictional issues, including incorrect filing before the wrong ITAT bench and subsequent transfers, not by wilful negligence. Reliance was placed on Supreme Court judgments in M.S.T. Katiji & Others, N. Balakrishnan, State of West Bengal v. Administrator, Howrah Municipality, Ramlal, Motilal and Chotelal v. Rewa Coalfields Ltd, and National Insurance Co. Ltd. v. Nicolletta Rohtagi & Ors. for a liberal interpretation of 'sufficient cause'. - The non-deduction of TDS was due to a bonafide belief that it was not required on the commission payment. Furthermore, significant employee turnover in key accounting positions, including the resignation of the Finance Controller and Main Accounts Executive, led to inadvertent oversights in TDS compliances without any intention of default. The assessee also argued that Hilton Jaipur had disclosed receipts and paid taxes. Revenue's contentions: - The learned Senior DR supported the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 271C,Section 201(1),Section 201(1A),Section 273B,Section 133A(2A),Section 194,Section 40(a)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Mridul Pathak, CA
Hearing: 17.08.2026Pronounced: 22.10.2026

PER:BRAJESH KUMAR SINGH, A.M. This appeal is directed against the impugned order dated 25.08.2025 passed in appeal No NFAC/2014-15/10296446 by the Commissioner of Income Tax(Appeals), NFAC, Delhi (hereinafter referred to as the “CIT(A)), u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2016-17, wherein ld. CIT (A) has dismissed the assessee’s appeal.

2.

The present appeal has been filed beyond the period of limitation, i.e., delayed by 207 days. The assessee has filed an application for condonation of this delay, which is reproduced as under :

“

The order continues below.

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