Rising Retails(P)Ltd, Kolkata V. ITO,Ward-4(1), Kolkata

ITA 1005/KOL/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8931 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-01-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 20-09-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; Reassessment proceedings; TDS
• Section: 147; 148; 144; 142(1); 40(a)(ia); 194C; 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA BEFORE SHRI SONJOY SARMA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.1005/Kol/2023 Assessment Year: 2011-12 Rising Retails Pvt. Ltd. 9/12, Lal Bazar Street Mercantile Building Block-B, 3 rd Floor, Kolkata-700001. (PAN:AAECR3681F) Vs. Income Tax Officer, Ward- 4(1), Kolkata (Appellant) (Respondent) Present for: Appellant by : N o n e Respondent by : Shri S. Datta, CIT, DR Date of Hearing : 25.01.2024 Date of Pronouncement : 31.01.2024 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide order No. ITBA/NFAC/S/250/2023-24/1054689090(1) dated 28.07.2023 passed against the assessment order by ITO, Ward-4(1), Kolkata u/s.144/147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 20.12.2016 for AY 2011-12. 2. Grounds taken by the assessee are as under: “1. That, on the facts and in the circumstances of the case, the Ld. C.I.T.(A), NATIONAL FACELESS APPEAL CENTER (NFAC) [hereinafter referred to as C.I.T.(A)] erred in confirming the addition made by the Ld. Assessing Officer [hereinafter referred to as AO). 2. That under the facts and in the circumstances of the case, Ld.CIT (A) erred in passing order ex-parte. 2 ITA No.1005/Kol/2023 Rising Retails Pvt. ltd., AY 2011-13 3. That under the facts and in the circumstances of the case, the Ld. CIT (A) erred in ignoring the adjournment request filed by assessee on 29.05.2023 seeking adjournment upto 13.06.2023. 4. That under the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of a sum of Rs.24,00,84,000/- made by the AO for the disallowance of expenses. The disallowance is unjustified and need to be deleted. 5. That under the facts and in the circumstances of the case Ld. CIT(A) erred in confirming the disallowances made by AO without issue of notice under section 143(2) of the Act during the reassessment proceedings.” 3. Briefly stated facts of the case are that the Ld. AO found that the assessee has debited an amount of Rs.24,01,69,671/- towards contract expense which include an amount of Rs.24,00,84,000/- paid to M/s. Sarda Vanijya Pvt. Ltd. The A.O. issued letter to the assessee requesting for details regarding deduction of tax at source u/s. 194C of the Act on this contractual payment to M/s. Sarda Vanijya Pvt. Ltd. In response, the assessee stated that since the party M/s. Sarda Vanijya Pvt. Ltd. has produced before the assessee a certificate issued u/s. 197(1) of the Act for lower deduction of TDS, the assessee has not made any TDS on the contractual payment made to it. However, the ITO (TDS)-3(3), Kolkata [ITO (TDS)-59(3), Kolkata] who is an authority to issue certificate u/s. 197(1) of the Act to M/s. Sarda Vanijya Pvt. Ltd. confirmed that no certificate of lower deduction of tax u/s. 197(1) of the Act was issued in the name of M/s. Sarda Vanijya Pvt. Ltd. for financial year 2010-11. According to the Ld. AO, assessee had failed to make TDS on the work contract payment of Rs.24,00,84,000/- made to M/s. Sarda Vanijya Pvt. Ltd. without valid reason. The assessment was therefore reopened u/s. 147 of the Act for the reason that the assessee failed to deduct tax at source on payment of 3 ITA No.1005/Kol/2023 Rising Retails Pvt. ltd., AY 2011-13 Rs.24,00,84,000/- made to M/s. Sarda Vanijya Pvt. Ltd. towards service job work contract. Accordingly notice u/s. 148 of the Act was issued to the assessee company on 28.08.2015. The A.O. in the assessment order mentioned that no return of income was filed by the assessee in response to said notice issued u/s. 148 of the Act. Subsequently, during the course of assessment proceedings notice u/s. 142(1) of the Act along with questionnaire was issued and served on the assessee on 01.12.2016 but there was no compliance to this notice issued by the A.O. Since the assessee failed to provide any substantive explanation or documentary evidences to substantiate non- deduction of tax on payment made to M/s. Sarda Vanijya Pvt. Ltd., the A.O. made disallowance of Rs.24,00,84,000/- u/s. 40a(ia) of the Act. 3.1. Aggrieved, assessee went in appeal before the Ld. CIT(A). 3.2. In the course of appellate proceedings in spite of giving sufficient and reasonable opportunities of being heard by issue of notice u/s. 250 of the Act, the assessee failed to provide any explanation or documentary evidences to substantiate as to why tax was not deducted at source on payment of Rs.24,00,84,000/- made to M/s. Sarda Vanijya Pvt. Ltd. on account of service job work contract. 3. 3. Ld. CIT(A) thus upheld the disallowance made by AO on account of failure to deduct tax at source as required in section 194C of the Act. Aggrieved, assessee is in appeal before the Tribunal. 4. Before us no one has represented the assessee even though notice for hearing has been served which were issued by RPAD. After 4 ITA No.1005/Kol/2023 Rising Retails Pvt. ltd., AY 2011-13 perusing the orders of the authorities below and the statement of facts on record, we find it proper to adjudicate upon the matter ex parte qua the assessee. From the orders of the authorities below, we take note of the facts already stated above wherein the impugned assessment has been completed ex parte u/s. 144 read with sec. 147 of the Act. Also, we note that Ld. CIT(A) has passed the order by noting that assessee did not represent its case before him. 4.1. The case before us is in respect of disallowance made by Ld. AO on the payments made to Sarda Vanijya Pvt. Ltd. (in short “SVPL”) on account of surplus service job work contract on which tax had not been deducted at source leading to a disallowance u/s. 40(a)(ia) of the Act. Ld. AO in his order has noted that assessee had claimed that the contractor SVPL had produced a certificate issued u/s. 197(1) of the Act for lower deduction of TDS because of which it had not deducted tax at source on the payment so made. However, according to Ld. AO, Ld. ITO, TDS-3(3), Kolkata had confirmed that no certificate of lower deduction of tax u/s. 197(1) was issued in the name of the contractor because of which he made the disallowance. 5. According to us, these are the facts which are verifiable from the records and appropriate examination would reveal the correct state of affairs in respect of claim made by the assessee and as held by the Ld. AO so as to give the correct effect to the transaction of payment made by the assessee to SVPL. However, from the records available before us, there is nothing to corroborate the above stated facts so as to verify the claim of the assessee as also to corroborate the stand taken by the Ld. AO. Considering the facts on record and the orders of the authorities below, we are inclined to adjudicate upon the matter ex parte qua the assessee. Thus, with the assistance of Ld. Sr. DR and on perusal of the material available on record, we do not find any reason to interfere with the observations and findings given by the Ld. 5 ITA No.1005/Kol/2023 Rising Retails Pvt. ltd., AY 2011-13 AO to sustain the disallowance so made. Accordingly, grounds taken by the assessee are dismissed. 6. In the result, appeal of the assessee is dismissed. Order is pronounced in the open court on 31 st January, 2024 Sd/- Sd/- (Sonjoy Sarma) (Girish Agrawal) Judicial Member Accountant Member Dated: 31 st January, 2024 JD, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent. 3. CIT(A), NFAC, Delhi 4. CIT 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata