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Facts
The assessee, Dhandeep Concretes, appealed against an order confirming the demand of Rs. 12,34,585/- for non-deduction of TDS for AY 2018-19. The assessee had made payments without deducting TDS, including contract payments (u/s 194C) and professional/technical fees (u/s 194J).
Held
The Tribunal noted that both the lower authorities' orders (Assessing Officer and CIT(A)) were ex-parte and not adjudicated on merits. The assessee failed to provide explanations or cooperate. Therefore, the Tribunal set aside the impugned order and remanded the case back to the Assessing Officer for fresh adjudication on a denovo basis.
Key Issues
Whether the lower authorities erred in passing ex-parte orders without proper adjudication on merits, and whether the assessee's non-compliance warranted setting aside the orders and remanding the case for fresh consideration.
Sections Cited
Section 253, Section 201, Section 201(1A), Section 194C, Section 194J, Section 133(6), Section 246A, Section 132
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
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 Page 1 of 13 - A.Y.2018-19 corresponding previous year period is from 01.04.2017 to 31.03.2018.
Factual Matrix 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 Page 2 of 13 - A.Y.2018-19 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
Page 3 of 13 - A.Y.2018-19 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:-
Page 4 of 13 Dhandeep Concretes - A.Y.2018-19 Page 5 of 13 - A.Y.2018-19 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:-
Page 6 of 13 Dhandeep Concretes - A.Y.2018-19 Page 7 of 13 Dhandeep Concretes - A.Y.2018-19 Page 8 of 13 - A.Y.2018-19 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/-.
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.”
3. Record of Hearing 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 Page 9 of 13 - A.Y.2018-19 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.
Observations Findings & conclusions 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
Page 10 of 13 - A.Y.2018-19 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 Page 11 of 13 - A.Y.2018-19 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.
Page 12 of 13 - A.Y.2018-19 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.