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Facts
The assessee company filed its return for AY 2014-15, which was initially accepted under section 143(3). The case was reopened under section 147/148 due to escaped income. The Assessing Officer disallowed 30% of labour payments for alleged non-deduction of TDS, leading to an addition. The CIT(A) upheld the disallowance.
Held
The Tribunal observed that the assessee had not furnished complete details of TDS deductions for all parties to the lower authorities. To ensure justice, the issue was remanded back to the Assessing Officer to give the assessee one more opportunity to submit complete details.
Key Issues
Whether the disallowance made for non-deduction of TDS on labour payments is justified, and whether the assessee was denied a proper opportunity to present its case.
Sections Cited
250, 147, 148, 143(3), 144B, 40(a)(ia), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J(SMC
(Assessment Year: 2014-15) Aansh Construction Pvt. Ltd. Deputy Commissioner of Income 605, Dev Milan, LBS Road, Opp. Tax, Circle 1, Thane Raheja Garden, Thane (W) – 400603. Room No. 22, B Wing, Ashar IT Vs. Park, 6th Floor, Road No. 16Z, Wagel Industrial Estate, Thane (W) – 400604. PAN/GIR No. AAECA0944L (Appellant) : (Respondent) Assessee by : Shri. V. G. Ginde Respondent by : Shri. Asif Karmali SR. DR. Date of Hearing : 20.03.2025 Date of Pronouncement : 25.03.2025 O R D E R 6+ Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15. 2. The assessee has raised the following grounds of appeal:
1. On the facts and in the circumstances of the case, and in law, the reassessment proceedings u/s 147/148 are bad in law, inasmuch as the mandate of Section 147 of the Act was not satisfied. The appellant, therefore, prays that the assessment order u/s.147 read with Section 144B of the Act, dated 30.03.2022 be quashed.
2. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in upholding the assessment order even though the same was passed in gross violation of (A.Y. 2014 -15) Aansh Construction Pvt. Ltd. basic principles of natural justice. The appellant, therefore, submits that the assessment order u/s.147 is bad in law, and therefore, prays that the said assessment order be set aside.
3. On the facts and in the circumstances of the case, and in law, the said assessment order is bad in law also because the mandatory provisions of Section 144B of the Act are not followed by the Ld. AO. The appellant, therefore, submits that the assessment order u/s.147 is bad in law, and therefore, prays that the said assessment order be set aside.
4. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in sustaining the disallowance of Rs. 13,87,297/-u/s.40(a)(ia), without appreciating that the appellant had placed material on record to show that TDS was duly deducted by it from the labour charges paid. The appellant, therefore, prays that the disallowance of Rs. 13,87,297/- be deleted.”
Brief facts of the case are that the assessee is a private limited company and had filed its return of income dated 29.11.2014, declaring total income at Rs. 18,11,870/-, for the year under consideration. The assessee’s case was selected for scrutiny and assessment order u/s. 143(3) was passed on 27.12.2016, where the ld. AO had accepted the returned income filed by the assessee. Subsequent to this, the assessee’s case was reopened vide notice u/s. 148 of the Act, dated 30.03.2021, for the reason that the ld. AO had reasonable belief that income chargeable to tax has escaped assessment which amounted to Rs. 15,39,706/-. The assessee filed its return of income dated 24.04.2024, in response to the notice u/s. 148, declaring the same income as the returned income. The ld. AO issued notice u/s. 143(2) and 142(1) of the Act. As the assessee failed to furnish the complete details of form 16A/26AS of some of the deductee inspite of several opportunities, the ld. AO disallowed 30% of the total expenditure towards labour payment amounting to Rs. 46,24,322/- for which it was alleged that the assessee has failed to deduct TDS, thereby making an addition of the same to the business income of the assessee. The ld. AO passed the assessment order u/s. 147 r.w.s. 144B of (A.Y. 2014 -15) Aansh Construction Pvt. Ltd. the Act, dated 30.03.2022, determining total income at Rs. 31,99,167/-, after making an addition/disallowance of Rs. 13,87,297/-.
Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 14.06.2024, dismissed the appeal filed by the assessee on the ground that the assessee has failed to substantiate the claim that the payments made to the labour contractors were genuine and has also not furnished all the form no. 16A during the appellate proceeding.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has filed details along with form no. 16A before the ld. AO pertaining to some of the parties and with regard to two other parties, the same was filed before the ld. CIT(A). The ld. AR further contended that the same has not been considered by the lower authorities and prayed that the assessee may be given one more opportunity to present its case before the ld. AO.
The learned Departmental Representative (‘ld. DR’ for short) opposed to the same stating that the assessee was given several opportunities before the lower authorities but has failed to file the complete details neither before the ld. AO nor before the ld. CIT(A). The ld. DR relied on the orders of the lower authorities.
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee is said to have incurred expenditure by way of sub contract (labour charges) amounting to Rs. 61,32,354/- for which the assessee is alleged to have failed to deduct TDS on the same for around 18 parties. The ld. AR brought our (A.Y. 2014 -15) Aansh Construction Pvt. Ltd. attention to the details of the contractors which are enclosed at paper book, page no. 9, in which he had stated that the details of party mentioned at serial no. 8 and 10 were not furnished before the ld. AO but was provided before the ld. CIT(A) and that the details pertaining to the other contractors were provided to the ld. AO.
On perusal of the assessment order and the ld. CIT(A)’s order, it is observed that the assessee has not furnished complete details along with form no. 16A of all these parties neither before the ld. AO nor before the ld. CIT(A). At the request of the ld. AR, we deem it fit to remand this issue back to the file of ld. AO to extend the assessee one more opportunity to furnish the complete details of the transactions along with form no. 16A to substantiate its claim, in the interest of justice dispensation. The ld. AO is directed to verify the same and to decide on the merits and in accordance with law. The assessee is also directed to strictly comply with the proceedings without any undue delay on its side before the ld. AO.
In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 25.03.2025 Sd/- Sd/- (NARENDRA KUMAR BILLAIYA) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 25.03.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned (Dy./Asstt.Registrar) ITAT, Mumbai