EQUITY CAPITAL ADVISORS (INDIA) PRIVATE LIMITED ,MUMBAI V. INCOME TAX OFFICER WARD 3(1)(3), MUMBAI

ITA 4584/MUM/2025

AI Insights

The case involves M/s. Equity Capital Advisors (India) Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs.2,40,86,813 under section 40(a)(ia) of the Income Tax Act, 1961, for the assessment year 2020-21. The addition was initially made by the Assessing Officer due to a TDS default observed during the scrutiny of the assessee's return, which declared a total income of Rs. Nil. The assessee contested the shortfall in TDS remittance, particularly under sections 194H, 194I, and 194C, but failed to provide adequate explanations or reconciliations to the CIT(A). The Tribunal, considering the circumstances and the assessee's request for another opportunity to present its case, decided to set aside the CIT(A)'s order and remand the matter for further proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789754 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 18-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: SUNIL PATEL
• Keywords: Set aside; TDS
• Section: 143(3); 142(1); 40(a)(ia); 194C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.4584/MUM/2025 (Assessment Year: 2020-21) M/s. Equity Capital Advisors (India) Pvt. Ltd., No.140, Shanti Industrial Estate, S.N. Road, Mulund (West) Mumbai – 400080 PAN : AABCE2510K ............... Appellant v/s Income Tax Officer, Ward – 3(1)(3), 6th Floor, Aaykar Bhavan, Mumbai - 400020 ……………… Respondent Assessee by : Shri Sunil Patel Revenue by : Shri Hemanshu Joshi, Sr.DR Date of Hearing – 27/11/2025 Date of Order - 28/11/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 23.05.2025, passed under section 250 of the Income Tax Act, 1961 (\"the Act\") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2020-21. 2. In this appeal, the assessee has raised the following revised ground of appeal, which is reproduced as follows: - Printed from counselvise.com ITA No.4584/Mum/2025 (A.Y. 2020-21) 2 “1. The Commissioner of Income Tax (Appeals) – National Faceless Appeal Center, (hereinafter referred to as CIT(A) erred in confirming the addition under section 40(a)(i) of the Income Tax Act 1961 amounting to Rs.2,40,86,813/-.” 3. The only grievance of the assessee is against the addition made under section 40(a)(ia) of the Act. 4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is engaged in the business of a fast, reliable and convenient platform to transfer money domestically to the beneficiary via an interbank NEFT transaction. For the year under consideration, the assessee filed its return of income on 15.02.2021, declaring a total income of Rs. Nil. The return filed by the assessee was selected for scrutiny, and statutory notices under sections 143(2) and 142(1) were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee had made a TDS default of a sum of Rs. 7,67,47,858/-. The Assessing Officer (“AO”) vide order dated 21.09.2022 passed under section 143(3) read with section 144B of the Act made a disallowance to the extent of 30% amounting to Rs.2,40,86,813/- under section 40(a)(ia) of the Act. In its appeal before the learned CIT(A), the assessee submitted that in respect of the expenses on commission and other marketing and promotional expenses, the amount of TDS which was required to be remitted was Rs.93,43,171/- as against Rs.51,15,366/- remitted by the assessee. Thus, the assessee submitted that there was a shortfall only to the extent of Rs. 42,27,805/- under section 194H of the Act. In the absence of any explanation, reconciliation, or any other supporting document to prove Printed from counselvise.com ITA No.4584/Mum/2025 (A.Y. 2020-21) 3 that the TDS shortfall of Rs. 43,03,448/- taken by the AO under section 194H is wrong, the learned CIT(A) upheld the findings of the AO. Further, in respect of TDS default under section 194I and 194C, the learned CIT(A) rejected the contention of the assessee that there was no shortfall in the absence of any explanation, reconciliation or supporting document. Accordingly, for want of cogent evidence, an addition of Rs. 2,40,86,813/- made by the AO under section 40(a)(ia) of the Act was upheld by the learned CIT(A). Being aggrieved, the assessee is in appeal before us. 5. During the hearing, the learned Authorised Representative submitted that due to failure on the part of the earlier consultant, these details could not be furnished before the learned CIT(A) and undertook to provide all the details in respect of the claim of the assessee, if another opportunity is granted. In this regard, the learned Authorised Representative filed the letter of undertaking as follows: - “ 27th November, 2025 The Hon Members, ‘E’ Bench, Income Tax Appellate Tribunal, Mumbai, M.K. Marg, Mumbai – 400020 Dear Sir, Sub: Letter of Undertaking Ref: ITA 4584/MUM/2025 – Assessment Year 2020-21 – Equity Capital Advisors (India) P. Ltd. We refer to the hearing today of the above referred appeal for our Client M/s. Equity Capital Advisors (India) P. Ltd. As agreed at the hearing today, we hereby confirm to provide the details, reconciliation and evidences to support the claims of our clients before the Commissioner of Income Tax (Appeals). Thanking you Yours Faithfully For Patel Sunil & Associates Printed from counselvise.com ITA No.4584/Mum/2025 (A.Y. 2020-21) 4 Sd/- Sunil H Patel Proprietor” 6. Having considering the submissions of both sides and perused the material available on record and undertaking given by the learned Authorized Representative, we are of the considered view that in the interest of justice and fair play one more opportunity should be granted to the assessee to furnish necessary details regarding its claim of reduced or Nil short fall of TDS under section 194I / 194C /194H. Accordingly, we restore this matter to the file of the learned CIT(A) on this issue with a direction to the assessee to furnish all the details, reconciliation and evidence in respect of its claim. Consequently, the impugned order is set aside, and the sole ground raised before us is allowed for statistical purposes. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity to the assessee. 7. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28/11/2025 Sd/- Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER S Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 28/11/2025 Prabhat Printed from counselvise.com ITA No.4584/Mum/2025 (A.Y. 2020-21) 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "