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Facts
The assessee, a real estate developer, was found to have not deducted TDS on certain payments made for IDC and IAC charges. A demand was raised against the assessee, and its appeal to the NFAC was dismissed for non-prosecution due to the assessee's absence.
Held
The Tribunal noted that the NFAC had dismissed the appeal on procedural grounds without addressing the merits of the case. In the interest of justice, the matter was restored to the NFAC to provide the assessee with a final opportunity to be heard.
Key Issues
Whether the NFAC wrongly dismissed the appeal for non-prosecution without deciding on merits, and if the assessee was granted a proper opportunity of hearing.
Sections Cited
201, 201(1), 201(1A), 194C, 194A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL
Appellant by Sh. Saurav Rohatgi CA Respondent by Sh.Rajesh Kumar Dhanesta,Sr.DR Date of hearing: 18/02/2026 Date of Pronouncement: 18/03/2026 ORDER PER SUDHIR KUMAR, JM:
This appeal by the assessee is directed against the order of National Faceless Appeal Centre (In short “NFAC”) Delhi vide order dated 10-09-2025 pertaining to A.Y. 2018-19 and arises out of the order dated 07-03-2023 PASSED u/s 201/201(1A) of the Income Tax Act 1961 (in short “the Act”). 2. The assessee has raised the following grounds in appeal:
1. That the impugned order is bad in law as well as on merits.
That the impugned order u/s 201 is illegal as without jurisdiction.
3. That the impugned order u/s 201 is bad in law as no online DIN has been generated on the system.
That under the facts and circumstances of the case no proper and reasonable opportunity of hearing has been allowed. 5. (a) The under the facts and circumstances of the case, there is absolutely no justification in law as well as on merit in treating assessee in default on account of non-deduction of TDS on EDC charges of Rs.16,92,500/-. 5.(b) That on the facts and circumstances of the case, the order passed u/s 201 (1) by the Ld. AO is bad in law and the appellant denies its liability to deduct TDS u/s 194 C on payment made to Director of Town & Country Planning for EDC charges. 5.(c) That the Ld. AO erred in law in holding that tax was deductible under section 194C on payments made on account of EDC in pursuance to agreement entered into with Governor of Haryana acting through Director of Town & Country Planning, Haryana. 6. (a) The under the facts and circumstances of the case, there is absolutely no justification in law as well as on merit in treating assessee in default on account of non-deduction of TDS on interest EDC charges of Rs.95,47,591/-. 6.(b) That on the facts and circumstances of the case, the order passed u/s 201 (1) by the Ld. AO is bad in law and the appellant denies its liability to deduct TDS u/s 194 A on payment made to Director of Town & Country Planning for EDC charges and interest thereon. 5.(c) That the Ld. AO erred in law in holding that tax was deductible under section 194A on payments made on account of late payment of EDC in pursuance to agreement entered into with Governor of Haryana acting through Director of Town & Country Planning, Haryana.
7. That under the facts and circumstances of the case no interest should have been charged. In any case, the calculation are erroneous and excessive.
The brief facts of the case are that the assessee company is engaged in the business of real estate development and management of real estate project. In this case a report was received that the assessee had made certain payments in the nature of IDC and IAC during the F.Y. 2017-18 and assessee had failed to deduct TDS on payment made to IDF. Notice u/s 201(1) /(IA) of the Act was issued and served on the assessee. In the response the assessee company filed the submission before the AO. The Assessing Officer after considering the submission raised the total demand of Rs.15,91,660/- u/s 201(1)/ 201(IA) of the Act. Aggrieved the order of the AO the assessee filed the appeal before the Ld. NFAC. Since the assessee did not appear before the Ld. NFAC despite four opportunities granted the Ld. NFAC relying on the following decisions dismissed the appeal of the assessee for want of prosecution.
(i) Shree Balaji Woollen Mills vs. Assistant Commissioner of Income Tax ITAT Delhi ‘G’ Bench & 1239 /Del/2011 A.Y.2005-06 (ii) Praveen Kumar Pruthi vs. Income Tax Officer ITAT Delhi ‘F’ Bench A.Y.1999-2000 (iii) Assistant Director of Income Tax vs. White Industries Australia Ltd. ITA Bench ’C’ Kolkata A.Y.1992-93 (iv) Jai International vs. Deputy Commissioner of Income Tax ITAT Jodhpur Bench A.Y.2012-13 (v) Ramesh Sharma vs. Assistant Commissioner of Income Tax ITAT Delhi ‘F’ bench A.Y. 2006-07 (vi)Estate of Late Tukojirao Holker vs. Commissioner of Wealth Tax High Court of Madhya Pradesh Misc. Civil Case No. 302of 1991 (vi) U-Like Promoters (P) Ltd. vs. Assistant Commissioner of Income Tax ITAT Delhi ‘H’ Bench ITA No. 1569 to 1572 ?del/ 2009 4. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.
The ld. AR of the assessee has submitted that sufficient opportunity of being heard was not provided to the assessee by the Ld. NFAC. He further submitted that appellate proceedings was completed after rejecting the adjournment sought by the assessee. He prayed that the ex-parte order be set aside.
Ld. DR has submitted that the assessee is a non-cooperative, he did not file submissions before the Ld.NFAC during the appeal proceedings.
We have heard the parties and gone through the material available on record. Since, in the instant case the Ld. NFAC has simply dismissed the appeal of the assessee in non- prosecuting and has not decided the appeal on merits, therefore, considering the totality of the facts and circumstances of the case and in the interest of justice and fair play, we deem fit proper to restore the issue to the file of the Ld. NFAC to grant one final opportunity of being heard to the assessee to substantiate its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. NFAC to substantiate its case. The grounds raised
by the assessee are accordingly allowed for statistical purposes.