2025 (6) TMI 310 - AT - Income Tax

Default u/s 201(1) - TDS u/s 194A and 194 - Assessee company was treated as an assessee as a default within the meaning of section 201(1) for not deducting the TDS - HELD THAT - Assessee being aggrieved though challenged the order of the AO u/s. 201 of the Act by filling 1st appeal before the ld. Commissioner however despite of sending two notices eventually made no reply/response and therefore the ld. Commissioner was constrained to decide the appeal of the assessee by an ex-parte order and ultimately dismissed the appeal of the Assessee in limine and without touching the merits of the case and therefore considering the peculiar circumstances for just and proper decision of case and substantial justice as the Assessee has claimed that one last and final opportunity may be provided to the assessee we are inclined to set aside the impugned order and consequently remanding the case to the file of the ld. Commissioner for decision afresh.

Summary

The Appellate Tribunal (ITAT Mumbai), per Judicial Member Shri Narender Kumar Choudhry, allowed the Assessee's appeal against the ex-parte order dated 23.12.2024 passed by the National Faceless Appeal Center/Ld. Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961, for A.Y. 2019-20. The Assessee had been treated as an assessee in default under section 201(1) for failure to deduct TDS of Rs. 98,84,891/- under sections 194A and 194, resulting in a demand of Rs. 15,46,384/-. Although the Assessee filed an appeal, it did not respond to notices, leading to dismissal of the appeal in limine without adjudicating merits. The Tribunal, emphasizing substantial justice, held that "considering the peculiar circumstances... one last and final opportunity may be provided," and accordingly set aside the impugned order and remanded the case to the Ld. Commissioner for fresh adjudication with a reasonable opportunity of hearing. The appeals were allowed on these terms.