S3 SOLUTION & SERVICE COMPANY,ETAWAH vs. INCOME TAX OFFICER, WARD-2(2)(5), ETAWAH

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ITA 668/AGR/2026Status: DisposedITAT Dehradun27 October 2026AY 2024-254 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that while the CIT(A) had issued multiple notices, the order could not be sustained as there was no finding on the assessee's core contention regarding its role as an intermediary and the inapplicability of TDS under Section 194Q. The Tribunal acknowledged the assessee's non-appearance despite opportunities but emphasized the need for substantial justice. Therefore, the Tribunal set aside the CIT(A)'s ex-parte order and restored the matter to the CIT(A)'s file for fresh adjudication. The assessee was directed to be diligent in attending future hearings. All grounds of appeal were allowed for statistical purposes.

What were the facts?

The assessee, S3 Solution & Service, is in appeal against the order of the CIT(A), NFAC, Delhi, for Assessment Year 2024-25. The assessee filed its return declaring income of Rs.62,620/-. The Assessing Officer (AO) noted that the assessee made purchases exceeding Rs.50,00,000/- from several entities without deducting TDS under Section 194Q. The AO disallowed 30% of total purchases, amounting to Rs.17,86,77,177/-. The assessee appealed to the CIT(A), who dismissed the appeal ex-parte. The assessee's primary contention before the CIT(A) was that it acted as an intermediary/agent in recharge distribution, and thus, the gross transaction value did not constitute purchases, making TDS under Section 194Q inapplicable. The CIT(A) did not provide findings on these contentions.

What were the issues?

1. Whether the learned CIT(A) erred in dismissing the assessee's appeal ex-parte without providing a proper opportunity of hearing, contrary to natural justice principles? (Question of law and fact, turning on principles of natural justice and procedural fairness). Assessee's Contention: The assessee argued that the CIT(A) dismissed the appeal without giving a proper opportunity of hearing. The assessee also contended that it acted as an intermediary/agent in recharge distribution, and therefore, the gross transaction value did not constitute purchases, making TDS under Section 194Q inapplicable. The assessee relied on the principle of natural justice and the nature of its business operations. Revenue's Contention: The revenue, through the Sr. DR, did not explicitly argue against the assessee's claim of lack of opportunity. However, the judgment notes that the CIT(A) had issued multiple notices and the assessee failed to appear or file submissions, leading to the ex-parte order. The revenue's implicit contention is that the CIT(A) acted appropriately given the assessee's non-compliance.

Which sections of the Income-tax Act were involved?

Section 194Q,Section 250,Section 139(1)

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: Ms. Gurneet Kaur, Advocate &
Hearing: 15.10.2026Pronounced: 15.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE : SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER

ITA No. 668/Agr/2026 Assessment Year: 2024-25 S3 Solution & Service Vs. Income-tax Officer, Company, Ward 2(2)(5), Income Tax H.No. 5, Vaibhav Bihar Colony, Office, Etawah-206001 Etawah (UP)-206001 PAN : ADSFS4073Q (Appellant) (Respondent) Assessee by Ms. Gurneet Kaur, Advocate & Sh. Jeetendra Yadav, Advocate Department by Sh. Anil Kumar, Sr. DR Date of hearing 15.10.2026 Date of pronouncement 15.10.2026 ORDER PER : BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER:

This appeal is directed against the impugned order dated 06.08.2026 passed in appeal No. NFAC/2023-24/10574614 by the ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (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

ITA No.668/Agr/2026

A.Y. 2024-25, wherein ld. CIT(A) has dismissed assessee’s appeal ex- parte.

2.

Brief facts of the case: The assessee filed its return of income u/s. 139(1) of the Act on 14.11.2024 declaring total income at Rs.62,620/-. The case was selected for scrutiny under CASS. During the course of assessment proceedings, on verification of the GST transactions, the AO noted that the assessee had made purchases above Rs.50,00,000/- from several entities/individuals without deducting TDS u/s. 194Q of the Act. The AO noted that the assessee did not explain the reason for the said non-deduction and accordingly disallowed 30% of the total purchases (Rs.59,55,90,590/-) amounting to Rs.17,86,77,177/-.

2.1 Aggrieved with the said order, the assessee filed an appeal before the learned CIT(A), who dismissed the appeal of the assessee ex-parte.

3.

Aggrieved with the said order, the assessee is in appeal before us, wherein among various grounds, the assessee has taken ground

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No. 1, stating that the learned CIT(A) dismissed the appeal of the assessee without giving proper opportunity of hearing.

4.

Heard both the parties and perused the records. On perusal of the order of the learned CIT(A), it is noted that the assessee was given several opportunities of being heard vide notices dated 03.06.2026, 17.06.2026 and 27.07.2026, but none appeared on behalf of the assessee and also no written submission was filed. Therefore, the learned CIT(A) was constrained to pass the order ex-parte. The non- appearance of the assessee despite opportunities given cannot be appreciated. The assessee in its grounds of appeal before the Ld. CIT (A) submitted that during the year, it was engaged in the business of recharge distribution and acted merely as an intermediary or agent and, therefore, the gross transaction value does not constitute purchases in the hands of the appellant and therefore no TDS u/s 194Q was applicable in the case of the assessee. However, there is no finding of the Ld. CIT(A) in respect of the said contentions of the assessee. Therefore, the order of the Ld. CIT(A) cannot be sustained. Further, to meet the substantial justice and to give one more opportunity to the assessee, we set aside the order of the learned CIT(A) and restore the matter to his file for fresh adjudication after 3 | P a g e

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giving reasonable opportunity of being heard to the assessee and in accordance with law. The assessee is also directed to be diligent to attend the hearing notices issued by the learned CIT(A). All the grounds of appeal are allowed for statistical purposes.

5.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 15/10/2026.

Sd/- Sd/- (SUNIL KUMAR SINGH) (BRAJESH KUMAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/10/2026 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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