V T CORP PRIVATE LIMITED,MUMBAI vs. CIRCLE 13(3)(2), MUMBAI, MUMBAI

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ITA 4251/MUM/2026Status: DisposedITAT Mumbai15 October 2026AY 2020-20215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the appeal before the Ld. CIT(A) was dismissed for a delay of 68 days in filing, with no application for condonation of delay. The assessee argued that no opportunity of hearing was given by the Ld. CIT(A) before dismissal. The Tribunal, without delving into the merits of the issues, found it appropriate to restore the matter to the file of the Ld. CIT(A) to allow the assessee to file an application for condonation of delay. The Ld. CIT(A) is directed to decide the application for condonation of delay on its merits and, if condoned, then decide the appeal on its merits after providing adequate opportunity of hearing to the assessee. The Tribunal clarified that this decision does not reflect on the merits of the dispute. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, V T Corp Private Limited, filed an appeal before the ITAT against the order of the Ld. ADDL. JCIT(A)-1 for Assessment Year 2020-2021. The appeal before the Ld. CIT(A) was dismissed due to a delay of 68 days in filing, as no application for condonation of delay was filed. The assessee contended that the CIT(A) dismissed the appeal without providing an adequate opportunity of being heard and that the delay was due to the simultaneous issuance of orders for AY 2019-20 and AY 2020-21. The assessee also raised grounds related to the merits of the addition, including the classification of payments as Fees for Technical Services (FTS) versus business income, and alleged discrimination in the disposal of appeals.

What were the issues?

1. Whether the Ld. CIT(A) erred in dismissing the appeal without providing an adequate opportunity of being heard to the assessee, thereby violating the principles of natural justice? (Question of law and fact) 2. Whether the addition made by the Assessing Officer and confirmed by the Ld. CIT(A) is arbitrary, unjustified, and without supporting evidence, particularly concerning the classification of payments as FTS instead of business income, and whether TDS under Section 195 was correctly demanded? (Question of law and fact) Assessee's contentions: - The Ld. CIT(A) failed to provide a proper opportunity of being heard, violating natural justice principles, and passed the order solely due to the delay in filing the appeal. - The delay was caused by receiving orders for AY 2019-20 and AY 2020-21 almost simultaneously. - There was discrimination in appeal disposal, with the appeal for AY 2019-20 (filed earlier) not yet heard while the order for AY 2020-21 was passed. - The payment was purely labor payment and constituted business income of the non-resident, not FTS, thus not requiring TDS under Section 195 unless the non-resident had a Permanent Establishment in India, which it did not. Revenue's contentions: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 195

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SANDEEP GOSAIN & SHRI BIJAYANANDA PRUSETH

Pronounced: 15.10.2026

PER SANDEEP GOSAIN, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. ADDL JCIT (A)-1 vide DIN: ITBA/APL/S/250/2025-26/1087939732(1) dated 26- Mar-2026 for the Assessment Year 2020-2021. The Assessee has raised the following grounds of appeal:

1.

General Ground The order passed by the Commissioner of Income Tax (Appeals) is bad in law and without applying the facts.

2.

The learned CIT(A) erred in confirming the addition made by the Assessing Officer without properly appreciating the facts and evidence on record.

3.

The addition made is arbitrary, unjustified and without any supporting evidence.

4.

The learned CIT(A) failed to provide proper opportunity of being heard, thereby violating principles of natural justice. The CIT appeal has not considered any facts and passed the order only due to delay in filling appeal. The delay in a filling of appeal was due to multiple order that is A.Y.19-20 and A.Y. 20-21 almost same time within 15 days.

5.

There was also discrimination in disposing of appeal. Firstly, appeal for same matter was filed for A.y.19-20 on 01/03/2023 which was in time. Later on, for A.Y.20-21 appeal was filed for the same matter on 03/07/2023. Even till today appeal for A.Y.19- 20 is not even heard & A.Y.202-21 order is passed.

6.

a) As per Section 195 TDS to be deducts on foreign Payments except the following. If the payment is in nature of Business Income of Non-Resident recipient, it requires TDS only when the NR recipient has a Business Connection Permanent Establishment in India, however if the payment is treated as FTS then regardless of the permanent Establishment in India, a TDS is required us. 195. In our case satisfy both conditions are 1 Non-Resident is not having permanent Establishment in India.

b) Out is purely a labour payment so it comes under category of nature of Business Income. ITO has made mistake in treating our services as FTS. All relevant documents are given which proves that it was purely a labour payment. So, no question of TDS us. 195.

7.

The appellant craves leave to add, amend, alter or withdraw any ground at the time of hearing

2.

We have heard the counsel for both the parties, perused the material placed on record and also the orders passed by the Revenue Authorities.

3.

From the records, we noticed that the appeal filed before the Ld. CIT(A) was dismissed on the ground that the assessee had inadvertently mentioned in Form No. 35 that the appeal was within limitation, whereas, there was a delay of 68 days in filing the appeal. Since no application was filed seeking condonation of delay, the said appeal was dismissed.

4.

Now, before us, the Ld. AR has specifically argued that no opportunity of hearing was given to the assessee by the Ld. CIT(A) before dismissing the appeal.

5.

Be that as it may, without going into the merits of the issues raised by the assessee and considering the fact that the assessee could not make an effective representation before the Ld. CIT(A), the Bench is of the view that adequate opportunity should be given to the assessee to represent its case before the Ld. CIT(A). Therefore, considering the overall circumstances of the present case, we deem it proper to restore the matter to the file of the Ld. CIT(A) to enable the assessee to file an application seeking condonation of delay. Thereafter, the matter shall be decided on the merits of the application for condonation of delay and, if the delay is condoned, on the merits of the appeal, after providing due and adequate opportunity to the assessee.

6.

Needless to mention, the Ld. CIT(A) shall provide adequate opportunity of hearing to the assessee. The assessee shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of the proceedings.

7.

Before parting, we make it clear that our decision to restore the matter to the file of the Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.

8.

In the result, appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the open court on 15.10.2026.

Sd/- Sd/- BIJAYANANDA PRUSETH SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 15.10.2026 RY-SrPS Copy to: V T CORP PRIVATE LIMITED, 901, WINDFALL, J B NAGAR, SAHAR PLAZA COMPLEX, CHAKALA, ANDHERI 1 (EAST), MUMBAI-400059, MAHARASHTRA

CIRCLE 13(3)(2), MUMBAI, 2 AAYAKAR BHAWAN,MUMBAI, MUMBAI-400020, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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