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Facts
The assessee, a Private Limited Company, filed its return for AY 2014-15. During scrutiny assessment, the Assessing Officer disallowed Rs. 17,86,816/- under Section 40(a)(ia) for non-deduction of TDS on freight and job work charges, assessing a higher total income. The Ld. CIT(A) dismissed the assessee's appeal ex-parte due to lack of supporting evidence.
Held
The ITAT, considering the principle of natural justice, set aside the ex-parte order of the Ld. Addl./JCIT(A) and remitted the matter back to them. The Ld. Addl./JCIT(A) was directed to provide the assessee with one more opportunity of being heard, cautioning the assessee to cooperate with the proceedings.
Key Issues
Whether the disallowance under Section 40(a)(ia) for non-deduction of TDS was justified, and whether the CIT(A)'s ex-parte dismissal violated the principles of natural justice by not providing sufficient opportunity of being heard.
Sections Cited
143(2), 142(1), 40(a)(ia)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2014-2015 Kaushalya Suppliers Private Limited,.………Appellant Room No. 5, Vinayak Complex, 4th Floor, 55/1A, Strand Road, Kolkata-700006 [PAN:AADCK5565C] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-7(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: N o n e, appeared on behalf of the assessee Shri Kallol Mistry, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: June 23, 2025 Date of pronouncing the order: July 22, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Addl./Joint Commissioner of Income Tax (Appeals), Patna dated 15.01.2025 passed for Assessment Year 2014-2015.
The facts in brief are that the assessee is a Private Limited Company, which filed its return of income electronically for the (A.Y. 2014-2015) Kaushalya Suppliers Private Limited assessment year 2014-15 on 29.11.2014 declaring total income of Rs.15,02,938/-. The case was selected for scrutiny through CASS. Accordingly, notice under section 143(2) of the Income Tax Act was generated and served on the assessee. In compliance to such notice, ld. A.R. of the assessee appeared and furnished details as called for under section 142(1) of the Income Tax Act. The same were examined and placed on record. In the course of assessment proceedings, it was observed by the ld. Assessing Officer that the assessee had debited Rs.12,90,503/- on account of freight and DO charges paid to Marine Shipping & forwarding (I) Pvt. Limited and Rs.4,96,313/- on account of job work to Shreenath Textiles, Surat, on which the assessee was under obligation to deduct tax at source and therefore, was asked to explain why the same should not be disallowed u/s 40(a)(ia) of the Act. In its written submission filed on 14.12.2016, the assessee stated that TDS was not deducted on freight and D.O. charges paid it shipping companies as the management was advised by its consultant that it is not applicable. The submission of the assessee is considered and found to be frivolous. Hence, the sum of Rs.17,86,816/- (Rs.12,90,503/- plus Rs.4,96,313/-) was disallowed under section 40(a)(ia) of the Act and added back to the total income of the assessee. Finally, the ld. Assessing Officer assessed the total income of the assessee at Rs.32,90,378/-.
On being aggrieved, the assessee preferred appeal before the ld. CIT(Appeals). The ld. Addl./JCIT(Appeals) dismissed the appeal of the assessee ex-parte as the assessee did not bring on record
On being aggrieved, the assessee preferred appeal before the ITAT. None appeared on behalf of the asseessee at the time of hearing.
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer at the time of assessment proceedings and ld. Addl. /JCIT (Appeals) during the appellate proceedings. The ld. Addl. /JCIT (Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the Addl. /JCIT (Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have heard the Ld. Departmental Representative and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the Addl. /JCIT (Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. Addl. /JCIT (Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the ld. Addl. /JCIT (Appeals) failing which the Ld. Addl. /JCIT (Appeals) shall be at liberty to pass appropriate order in (A.Y. 2014-2015) Kaushalya Suppliers Private Limited accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 22/07/2025.