HMA AGRO INDUSTRIES LIMITED,AGRA vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, AGRA, AGRA

This appeal has been preferred by assessee against the impugned order dated 11.03.2025 passed in Appeal No.NFAC/2013-14/10019439 u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2014-15, wherein learned CIT(Appeals) has dismissed assessee’s first appeal, confirming the demand of Rs.5,16,02,434/- raised by the Assessing Officer on account of non-deduction/short deduction of tax at source including interest u/s. 201(1A), vide assessment order dated 30.03.2021 passed u/s. 201(1)/201(1A) of the Act.

This appeal has been preferred on the grounds, in addition to other grounds, that the ld. CIT(Appeals) has erred in confirming the assessment order in violation of the principles of natural justice, and that the Assessing Officer was not justified in treating the appellant as an ‘assessee in default’.

Perused the records and heard learned representative for the assessee and ld. departmental representative for the revenue.

The Learned AR has submitted that the impugned order passed by the Learned CIT(Appeals) is not sustainable in law, having been rendered without providing a reasonable opportunity of hearing to the assessee, in violation of the principles of natural justice. It was further contended that the Assessing Officer was also not justified in treating the appellant as an 'assessee in default' under the provisions relating to non-deduction or short deduction of tax at source, without considering assessee’s reply to the show cause notice in the correct legal and factual perspective. Learned AR laid much emphasis on a very crucial fact that a detailed show cause notice was issued by the Assessing Officer on 25.03.2021 at 9.39 p.m., requiring the assessee to furnish its response by 26.03.2021. The assessment order, however, was passed shortly thereafter on 30.03.2021. Although the assessee had submitted its online reply on 26.03.2021, no reasonable opportunity was provided to gather and furnish voluminous records and supporting documentation necessary for proper verification of the TDS 2 | P a g e liability. It was strongly urged that before arriving at the conclusion that the assessee is an 'assessee in default', it was incumbent upon the Assessing Officer to conduct a thorough verification of relevant facts and supporting records at the assessment stage to ascertain assessee’s actual obligation for TDS. The failure to undertake such verification at Assessing Officer’s stage has resulted in a miscarriage of justice. In light of the above, the Learned AR prayed that the matter be remitted back to the file of the Assessing Officer for a fresh adjudication, directing the Assessing Officer to afford adequate opportunity to the assessee to submit all relevant evidences and records necessary for verification of its TDS obligations, and thereafter pass a fresh order in accordance with law.

Ld. DR, on the other hand, has submitted that sufficient opportunities were afforded to the appellant by ld. CIT(Appeals). He supported the impugned order.

On perusal of the impugned order passed by the Learned CIT(Appeals), it is observed that although notices under section 250 of the Income Tax Act, 1961 (“the Act”) were issued, the assessee did not file any response or written submissions in the appellate proceedings. Nonetheless, it is evident that the Learned CIT(A) has proceeded to pass the order ex parte without addressing the merits of the case, as mandated u/s. 250(6) of the Act. 3 | P a g e

Further, a perusal of the assessment order reveals that the assessee was not granted adequate opportunity to respond to the show cause notice.

In the result, the appeal is allowed for statistical purposes.