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Facts
The assessee, Indian Institute of Technology (IIT) Patna, engaged M/s NBCC Ltd. for construction and allegedly paid Rs. 4,10,80,680/- without deducting tax at source. The AO treated the assessee as in default for non-deduction of TDS. The CIT(A) upheld the AO's order despite the assessee not attending hearings.
Held
The Tribunal considered the grounds of appeal and the arguments of both parties. It was noted that the assessee missed opportunities to present their case before the CIT(A) due to a communication gap. The Tribunal found it in the interest of substantive justice to remand the matter back to the CIT(A) for fresh adjudication.
Key Issues
Whether the assessee was in default for non-deduction of TDS, and whether the matter should be remanded to the CIT(A) for fresh adjudication due to procedural lapses.
Sections Cited
250, 201(1)/1A, 194C, 194J
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH” PATNA
Assessment Year: 2013-14 Indian Institute of Technology, Admin Building, Bihta, Patna – 800003 (Bihar) [PAN: PTNI00507D] ...............…...…………….... Appellant vs. Assistant Commissioner of Income Tax, TDS Circle, Patna .......…..…......................... Respondent Appearances by: Assessee represented by : Sh. Ankit Kumar, CA Department represented by : Sh. Ashwani Kr. Singal, JCIT Date of concluding the hearing : 20.01.2025 Date of pronouncing the order : 19.02.2025
ORDER PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present appeal emanates from order u/s 250 of the Income Tax Act, 1961 (hereafter ‘the Act’). dated 07.03.2023, passed by the Ld. Commissioner of Income Tax (Appeals) [hereafter ‘the Ld. CIT(A)’], National Faceless Appeal Centre (NFAC), Delhi.
1.1 In this case, the AO passed an order u/s 201(1)/1A of the Act on an allegation that the IIT Patna had engaged M/s NBCC Ltd. for construction of an academic complex. It has been alleged that the sum of Rs. 4,10,80,680/- was paid by the assessee without deducting tax at source. The Ld. AO has discussed the surrounding facts and circumstances in the 1.2 Before the Ld. CIT(A), it is seen that 5 notices of hearing were given but the same could not be attended by the assessee and thereafter the action of Ld. AO was upheld through the impugned order.
1.3 Further aggrieved with this action of Ld. CIT(A), the assessee is in appeal before us through the following grounds:
“1. For that the grounds of appeal hereto are all without prejudice to each other.
2. For that on the fact and in circumstances of the case the order passed by the Assistant Commissioner of Income-Tax. TDS Circle, Patna (here-in- after known as "the Ld. Assessing Officer") and confirmation of the same by the ld. Commissioner of Income-tax (Appeals), Income Tax Department (here-in-after known as "the CIT (A)") are both bad on facts and in law inter-alia being based entirely on mere suspicion, surmises and conjectures.
3. For that on the fact and in circumstances of the case the orders passed by the Ld. Assessing Officer and confirmation of the same by the CIT (A) are also unstable in law being violative of the settled principles of natural justice as no reasonable opportunity was allowed to furnish defence in course of assessment proceedings as well as also in appellate proceedings. 4 For that on the facts and circumstances of the case, the order of the Ld. Assessing Officer and the confirmation of the same by the Ld. CIT(A) is wholly perverse in as much as the same are contrary to an at variance with the material available on record.
5. For that on the facts and in circumstances of the case the determination of the total tax of Rs. 10,59,881/- by the Id. Assessing Officer and confirmation by the CIT (A) is wholly arbitrary, unwarranted, wrong, illegal and at any rate are excessive.
6. For that on the fact and in circumstances of the case the ld. Assessing Officer has erred in holding that the assessee is an assessee-in-default under the section 201(11(1A) of the Income Tax Act. 1961 (here-in-after referred as "the Act") despite already deducting the tax at source upon the payment made to Shapoorji Pallonji & Company Ltd.
7. For that on the facts and in circumstances of the case the Id. Assessing Officer has erred by ignoring that deducting the tax again on the same nature of payment shall militate the principle of double taxation which is against the basic core of the Act
8. For that on the facts and in circumstances of the case, passing of the order under the section 201(1)/(IA) of the Act the Ld. Assessing Officer and confirmation of the same by Ld. CIT (A) after ignoring the fact that NBCC Ltd. was only a Project 2 Indian Institute of Technology, Patna Management Consultant which was entrusted with the task of coordinating with the contractor for constructing the building was arbitrary and illegal.
9. For that on the facts and in circumstances of the case, the Ld. Assessing Officer has erred in adjudicating that the assessee is liable to deduct tax under the provisions of section 194C notwithstanding the fact that the payments to NBCC Ltd. are made in the nature of professional consultancy and are liable to be deducted under the section 194J of the Act.
10. For that on the facts and in circumstances of the case, the Ld. Assessing Officer has erred in holding that the assessee is responsible to deduct tax at source under the section 194C of the Act to for payments made to NBCC Lid wherein the entire payment for the construction of building has been made to Shapoorji Pallonji & Company Ltd and the tax has already been deducted on such payment 11. For that on the facts and in circumstances of the case, the Ld. Assessing Officer has erred in holding that the assessee is liable to deduct tax under the section 194C for NBCC Ltd. by ignoring the fact that the entire invoices for the construction of the building has been raised by Shapoorji Pallonji & Company Ltd.
12. For that on the facts and in circumstances of the case, the passing of the order by the Ld. Assessing Officer and confirmation by the same by Ld. CIT (A) in ignorance of the ratio laid down in Hindustan Coca Cola Beverages Pvt. Ltd.
13. Commissioner of Income Tax 293 ITR 226 (SC) and relied upon by the jurisdictional High Court of Judicature at Patna in Power Grid Corporation Ltd. vs. Commissioner of Income Tax. TDS Circle, Patna in CWJC No. 8472/2013 is wrong, illegal and arbitrary.
For that the observations made by the Assessing officer in the order of assessment are wholly biased, unwarranted and uncalled for and are even without any material available on record and particularly because the same has been made without even giving any opportunity of hearing to the appellant.
For that on the facts and in circumstances of the case the Assessing officer has erred in not considering relevant materials, which has vitiated the order of Assessment 15. For that the impugned order is misconceived and arbitrary in nature.
For that the appellant prays to add, amend, modify, and delete any ground, if necessarily.
For that other grounds, if any, will be urged at the time of hearing.”
It is seen that the grounds of appeal
are very lengthy and argumentative. However, the Ld. AR pointed out that due to some communication gap they could not respond to the notices issued by the office of Ld. CIT(A) for fixing the dates for hearing and therefore, unintentionally, they missing out on opportunities to present their case. It was requested that the assessee has a good case on facts and given a 3. Indian Institute of Technology, Patna chance they could present the issues before the Ld. CIT(A). The Ld. AR read out extensively from the statement of facts annexed to the form of appeal in support of his contention.
2.1 The Ld. DR on the other hand relied on the orders of authorities below and stated that he would have no objection in case the matter is remanded to the file of Ld. CIT(A) for fresh adjudication.
We have carefully considered the documents before us and the contention of Ld. AR/DR. It is felt that in the interest of substantive justice, this matter deserves to be remanded back to the file of Ld. CIT(A) for fresh adjudication. Needless to say, the Ld. CIT(A) would give adequate opportunity of being heard to the assessee and the assessee would do well to avail of such opportunities for presenting his case.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the court on 19.02.2025