C D NAIR ERECTORS,TRIVANDRUM V. DCIT,CIRCLE 1(1), TRIVANDRUM

ITA 1159/COCH/2024

AI Insights

The case involves C.D.Nair Erectors, who appealed against the order of the Commissioner of Income-tax (Appeals) which affirmed the Assessing Officer's decision. The dispute centered on the disallowance of a service tax deduction of Rs.4,26,15,036 for the assessment year 2017-2018, which the assessee failed to deposit by the due date of filing the return under Section 139(1) of the Income Tax Act. The assessee argued that the delay was due to disputes with clients, but this was not accepted by the CIT(A). The tribunal, referencing a similar case, dismissed the appeal, confirming that the deduction was rightly disallowed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361076 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Other Referred Cases: ACIT v. Kunnel Engineers & Contractors Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VENI RAJ

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.1159/Coch/2024 : Asst.Year 2017-2018 C.D.Nair Erectors Sree Bhavan, Pallichal PO Pallichal, Trivandrum – 695 020. PAN : AAFFC3256P. v. The Deputy Commissioner of Income-tax, Cir.1(1) Trivandrum. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Veni Raj, CIT-DR Date of Hearing : 19.05.2025. Date of Pronouncement : 20.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 02.12.2024, having DIN & Order No.ITBA/NFAC/S/250/2024- 25/1070805877(1) and relates to the assessment year 2017- 2018. 2. The brief facts of the case as coming out from the orders of the authorities below are that the assessee is an individual and has filed return of income for the impugned year on 12th August, 2017 declaring total income of Rs.32.39 lakh. Thereafter, the return of the assessee was picked up for scrutiny. During the course of assessment proceedings, the ITA No.1159/Coch/2024. C.D.Nair Erectors. 2 Assessing Officer observed that the assessee has failed to make payment of service tax before the due date of filing of return u/s.139(1) of the Act and hence the claim of the assessee vis-à- vis deduction of service tax for an amount of Rs.4,26,15,036 deserves to be disallowed u/s.43B of the Act. 3. Aggrieved with the order of the AO, the assessee preferred an appeal before the ld.CIT(A). The assessee argued that there was dispute between the assessee and the clients and hence the assessee could not be able to deposit the service tax in time. However, the ld.CIT (A) could not be able to find any force in the submissions of the assessee and affirmed the order of the AO. 4. Aggrieved with the order of the ld.CIT (A), the assessee has come up in appeal before us. Today, when the matter was called on for hearing, no one appeared from the side of the assessee despite the service of notice. Therefore, we proceed to dispose of the appeal on merits after hearing the learned CIT- DR. 5. The learned CIT-DR appearing on behalf of the Revenue pointed out that it is an admitted position on fact that the assessee has not deposited the service tax before the due date of filing of the return of income and hence the assessee is not entitled for the deduction of an amount of Rs.4.26 crore. 6. We have heard the Ld DR and perused the material available on record. Perusal of the facts as coming out from the ITA No.1159/Coch/2024. C.D.Nair Erectors. 3 orders of the authorities below would show that this is an appeal arising from the order of the AO passed u/s.143 (3) r.w.s. 263 of the Act. Further, it is also an admitted position of fact that the assessee failed to deposit the service tax for the assessment years 2014-2015, 2015-2016 and 2016-2017, as mentioned herein below:- Service tax payable 2014-2015 Rs.2,16,27,538.60 Service tax payable 2015-2016 Rs.1,01,68,768.82 Service tax payable 2016-2017 Rs.1,08,18,729.00 ---------------------- Total Rs.4,26,15,036.42 ================ 7. It is an admitted position of fact that the assessee could not deposit these amounts before filing of the return of income. Recently, the co-ordinate bench of the Tribunal in the case of ACIT v. Kunnel Engineers & Contractors Pvt. Ltd. in ITA No.653/Coch/2019 vide order dated 19th May, 2020 has categorically held that if the service tax collected by the assessee is not paid to the government before the due date of filing of the return, then the assessee is not entitled for the deduction of such sum. Respectfully following the verdict of the co-ordinate bench, we hereby dismiss this appeal. 8. In the result, the appeal filed by the assessee is dismissed. ITA No.1159/Coch/2024. C.D.Nair Erectors. 4 Order pronounced on this 20th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 20th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "