DHANDEEP CONCRETES,JAIPUR vs. INCOME TAX OFFICER(TDS), UJJAIN

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ herein after referred to as the Act

for the sake of brevity] before this tribunal as & by way of a

second Appeal. The Assessee is aggrieved by the order

bearing Number:-ITBA/APL/S/250/2024-25/1074425314 (1)

dated 12.03.2025 passed by the Ld. CIT(A) u/s 250 of the

Act, which is herein after referred to as the “Impugned

order”. The Relevant Assessment year is 2018-19 and the

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corresponding previous year period is from 01.04.2017 to

31.03.2018.

2.1 That as and by way of an order made u/s 201(1)/1(A) of

the Act, the total demand payable by the assessee u/s

201(1)/201(1A) was computed & determined at Rs.

12,34,585/- in respect of which Assessee was treated in

default. The total tax payable for “Non-deduction of TDS

amounts to Rs. 7,21,980/-. The statutory interest payable

u/s 201(1A) on such non deduction of tax from the due date

till date of order amounts to Rs. 5,12,605/-.That the

aforesaid under section u/s 201(1)/1(A) of the act is dated

28.02.2023 which is herein after referred to as the

“Impugned default” order.

2.2 That in case of the assessee an information was received

by ITO(TDS) Ujjain MP from DCIT, CC-3 Jaipur vide letter

dated 08.10.2021 that a search & seizure u/s 132 of the Act

1961 was carried out in the case of "Sitaram Agarwal

Group, Kotputli on 23.01.2019. During the course of

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search proceedings, several incriminating documents were

found and seized. On perusal of seized documents, it has

been observed that the assessee M/s Dhandeep Concretes

has made following payments without deducting TDS in A.Y.

2018-19 relevant to F.Y. 2017-18. Details of the same are as

under-

S.No. Name Amount A.Y. involved

1 Jojan Labour 2145000 2018-19 contractor 2 Jojan Labour 892000 2018-19 contractor 3 Mehta Filling Station 10447000 2018-19

4 Mahavir Motors 1000000 2018-19

5 Nursing Bearing 362161 2018-19

6 Shahpura Diesels 295000 2018-19

7 Gurukripa Conveyers 244700 2018-19

8 Kanchan Metal 785140 2018-19 Casting 9 Vishwakarma 918000 2018-19 Industries 10 Sitaram Aggrawal 918000 2018-19

Total 18007001

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2.3 In the aforesaid “Impugned default order” at para 3 it

is recorded as under:-

“3. The assessee is liable for tax deduction on the following payments/expenses a) Contract (u/s 194C) b) Professional/Technical fees (194))”

2.4 That in the aforesaid the “Impugned default order”

following is too recorded:-

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2.5 That the assessee being aggrieved by the aforesaid the

“Impugned default order” prefers the first appeal u/s 246A

of the Act before the Ld. CIT(A) who by the “Impugned

order” has dismissed the first appeal of the assessee on the

grounds & reasons stated therein. The core grounds &

reasons for the dismissal of the first appeal are as under:-

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2.6 The Assessee being aggrieved by the “Impugned order”

has preferred the instant second appeal before this Tribunal

& has raised following grounds of appeal in the Form No. 36

against the “Impugned order” which are as under:-

“1. On the facts and circumstances of the case and in law, Id. CIT(A) grossly erred in law and on facts by passing the impugned order which is bad in law and liable to be quashed, as it has been passed in undue haste without affording the appellant an adequate opportunity to furnish explanations, supporting documents, and legal submissions.

1.1 That the Id. CIT(A) erred in law and on facts in dismissing the appeal without considering the merits of the case, thereby violating the principles of natural justice. 2. On the facts and in the circumstances of the case, Id. CIT(A) has grossly erred in confirming the actions of the Id. AO in treating the appellant as an assessee in default under section 201(1) & 201(1A) of the Income-tax Act, 1961, despite the fact that the alleged payments were not recorded in the regular books of accounts, and no TDS liability arose. 2.1 That the Id. CIT(A) erred in confirming the application of a flat TDS rate of 10% оп all alleged payments without verifying the nature of payments, thereby leading to an unjust demand of Rs. 12,34,585/-. 3. The appellant craves the right to add, delete or amend any of the grounds of appeal either before or at the time of hearing of appeal.”

The hearing in the matter took place before this Tribunal on

15.01.2026 when the Ld. AR for & on behalf of the assessee

appeared before us & interalia contended that the

“Impugned order” is bad in law, illegal & not proper. It is

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passed in haste without affording the assessee an adequate

opportunity to furnish explanations, supporting, documents

& legal submissions. Merits of the case have not been

“Impugned order” is considered. in the violation of the

principles of natural justice. The nature of payment made by

the assessee have not been verified by the Ld. CIT(A) & flat

rate of TDS 10% has been upheld, leading to the demand of

Rs. 12,34,585/-. Per contra the Ld. DR has pointed out to

this Tribunal para 8 of the “Impugned default order” which

is on account of non-deduction of TDS by the assessee. It

was pointed out that even the “Impugned default order” is

exparte. The hearing was then concluded.

4.1 We have to decide the legality, validity and proprietary of the

“Impugned order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case and after hearing & upon

examing the rival contentions of the Ld. AR & the Ld. DR

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canvassed before us, are of the considered opinion that the

both the “Impugned default order” as well as “Impugned

order” of both the lower authorities are exparte in nature.

Both the orders of the lower authorities have not been

adjudicated & adjudged basis merits of the case & we find

prima facie fault of the assessee in this regard. During

the course of hearing no legitimate explanation is given

by the Ld. AR as to why the assessee remained non-

compliant before both the lower authorities. Both orders

are not on merits. Even the Ld. DR has pointed out basis

para 8 of the “Impugned default order” the exparte nature

of the impugned default order. This Tribunal has repeatedly

emphasised that both the lower authorities under the Act i.e.

the Ld. AO & the Ld. CIT(A) must pass speaking & well-

reasoned order basis merits of the case. The assessee’s

cooperation in this regard assumes importance. The assessee

cannot go in slumber mode. In the given facts &

circumstances since no plausible reason has come forth on

record by the Ld. AR as to why the assessee was not

compliant at both the levels we deem it fit & proper to

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impose cost of Rs. 5000/- on the assessee as and by way of a

deterrent measures so that such mistake & non-compliant

behaviour is not repeated in future by the assessee & others

too. In the result we set aside the “Impugned order” &

remand the case back to the file of Ld. AO for fresh

adjudication & ad judgement on denovo basis. The Assessee

shall first pay cost of Rs. 5000/- to the department under

challan “others” & shall not take any credit of such cost in

taxes, interest & penalties etc. The assessee shall then give

all the material particulars, information, details, evidences

and books of account, bills etc & such other details as

requisitioned by the Ld. AO so that he/she can pass a fresh

order on remand basis merits of the case. The fresh order

shall be speaking & well-reasoned order. Assessee is directed

to cooperate with department & not to seek unnecessary

adjournment on flimsy grounds. The assessee is at liberty to

make all plausible submissions which are reasonable &

worth credence.

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4.4 In the premises drawn up by us, the “Impugned order”

is set aside as and by way of remand back to the file of the

Ld. AO on denovo basis with directions as per para 4.3 supra.

Order 5

5.1 In the result the “Impugned order” is set aside as and

by way of remand back to the file of Ld. AO.

5.2. The appeal of the assessee is allowed for statistical purpose.

Pronounced in open court on 30.01.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 30/01/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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