ANINDYA NITYARANJAN SARKAR,VADODARA vs. THE DY.CIT, CIRCLE-1(1)(1), VADODARA

The Learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance u/s 40(a)(ia) of Rs.2,54,163/-.

The Learned Commissioner of Income Tax (Appeals) erred in ignoring the submission made during the course of appellate proceedings and further erred in confirming the addition of Rs.2,63,335/- being notional income from House Property.

The Learned Commissioner of Income Tax (Appeals) erred in not accepting the contention of the appellant to set aside the assessment proceedings to the file of the Assessing Officer.” AY : 2017-18 - 2–

The brief facts of the case are that the assessee filed his return of income for the year under consideration on 30.10.2017, declaring total income of Rs.88,01,260/-. The original assessment was completed u/s 143(3) of the Act on 11.12.2019, determining the total income at Rs.1,04,95,580/- after making certain disallowances/additions. Subsequently, the assessment was reopened on the basis of information that the assessee had allegedly failed to deposit the tax deducted at source (TDS) on certain payments and had not offered the notional rental income from two properties owned by him. The reassessment was completed u/s 147 r.w.s. 144 and 144B of the Act on 16.05.2023, determining the total income at Rs.1,10,13,078/-. The Assessing Officer made a disallowance of Rs.2,54,163/- u/s 40(a)(ia) of the Act on account of alleged short deposit of TDS and an addition of Rs.2,63,335/- towards estimated rental income from the two properties.

Aggrieved by the reassessment order, the assessee preferred an appeal before the Ld. CIT(A), who, vide the impugned order dated 09.12.2025, dismissed the appeal.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

We have heard the rival contentions and perused the material available on record.

By way of this ground, the assessee challenged the validity of reopening. AY : 2017-18 - 3– Ground No. 2:

The Assessing Officer made a disallowance of Rs.2,54,163/- on account of alleged short deposit of tax deducted at source (TDS). The assessee submitted that the tax had been deposited and that the disallowance was made without properly appreciating the relevant details.

Considering the discrepancy noted by the Assessing Officer between the TDS payable and the amount deposited, we deem it appropriate to restore this issue to the file of the Assessing Officer for fresh verification of the relevant TDS returns, challans and payment details. The Assessing Officer shall verify the actual amount of TDS deposited, the amount, if any, remaining unpaid and the applicability of section 40(a)(ia) of the Act, and decide the issue afresh in accordance with law after providing reasonable opportunity of being heard to the assessee. Accordingly, Ground No. 2 is allowed for statistical purposes.

The addition of Rs.2,63,335/- was made by estimating rental income from two properties. We restore the issue to the file of the Assessing Officer to verify the actual use of the properties during the relevant year, examine the assessee’s supporting evidence and decide the issue afresh in accordance with law after providing reasonable opportunity of being heard to the assessee.