M/S. RITA TRANSPORT,BURDWAN V. DCIT(TDS), CIRCLE 4(1), , DURGAPUR

ITA 585/KOL/2025

AI Insights

M/s. Rita Transport appealed against the orders of the CIT(A) and the AO, which imposed demands under sections 201(1) and 201(1A) of the Income Tax Act, 1961, for non-deduction of TDS on payments made to transporters. The AO had initiated proceedings following a survey and found that the assessee had not deducted TDS on substantial payments, citing non-compliance with section 194C. The CIT(A) upheld the AO's decision, rejecting the assessee's claims that the transporters had provided declarations under section 194C(6) for the relevant financial year. The ITAT, after hearing the arguments, decided to remit the case back to the AO for a fresh examination, allowing the assessee to present additional evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714453 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; TDS
• Section: 139; 201(1); 194C

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport Vs. DCIT(TDS), Circle-4(1), Durgapur (Appellant) (Respondent) PAN: AAIFR4520L Appearances: Assessee represented by : S.K. Kamaluddin, AR. Department represented by : S.B. Chakraborthy, Sr. DR. Date of concluding the hearing : 09-July-2025 Date of pronouncing the order : 07-August-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the ADDL/JCIT(A)-1, Chandigarh [hereinafter referred to as the Ld. ‘Addl/JCIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 06.02.2025, which has been passed against the order u/s 201(1) and 201(1A) of the Act, dated 14.03.2022. Printed from counselvise.com Page | 2 I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the action of the A.O. by raising demand under section 201(1) of the Income Tax Act of Rs. 5,58,641 without appreciating the fact that all PAN of the deductees filed during the course of assessment proceedings and provision of section 194C(6) had been complied with. Hence demand raised of Rs.5,58,641/- under section 201(1) is illegal has to be deleted. 2. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the action of the A.O. by charging the Interest under section 201(1A) of the I.T. Act, 1961 of Rs.3,98,171/- which is illegal has to be deleted. 3. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the action of the A.O. by imposing Late fees under section 234E of the Income Tax Act, 1961 of Rs.7,86,175/-. Such late fees are illegal has to be deleted. 4. That the appellant craves leave to raise any other ground or grounds at the time of hearing of the appeal.” 3. Brief facts of the case are that in consequence of the survey operation conducted on 09/03/2018 at the office premises of M/s Rita Transport, Vill & PO-Bahula. Paschim Burdwan, proceeding u/s 201(1)/201(1A) for F.Y. 2016-17 were initiated. In response to the same, the authorized representative submitted the relevant documents as per order sheet and explained the same. The Ld. AO noted on perusal of the furnished Ledger copies, credit of Transport charges in the books of account for the F.Y. 2016-17. Out of 72 Transporters, the payment in respect of an amount of Rs.1,12,500/- was below the limit for deduction of TDS. The assessee had made payment of Rs. 7,56,98,968/- to 72 different Transporters during the F.Y. 2016-17 and had deducted TDS on the payment of Rs. 1,70,01,543/-. It had not filed the TDS return in Form No. 26Q for the Quarter-1 and Quarter-2 for the F.Y.2016-17. As Printed from counselvise.com Page | 3 I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport. the assessee was liable to deduct the TDS on the whole amount of Rs.7,55,86,468/- being above the prescribed limit u/s 194C of the Income Tax Act, 1961, the proceedings u/s 201(1) and 201(1A) of the Act were initiated. It was also found by the Ld. AO that M/s. Rita Transport was itself providing its truck/goods carriage to Eastern Coal Field (ECL) and was acting as middle man/petty contactor between Eastern Coalfield Limited and other 6 Transporters and the margin amount (commission) was kept by the assessee. Thus, there was default for non-deduction of TDS u/s 194C on the lease of trucks to the tune of remaining amount of Rs. 5,85,84,155/- and consequently the order was passed. Aggrieved with the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 06.02.2025 dismissed the appeal. The relevant extract from the order of the Ld. CIT(A) is as under: “5.2 I have considered the submission made by the appellant and have also gone through the material on record. On perusal of impugned order under section 201(1), it has been noticed that the appellant had admittedly not deducted the tax at source on the payments of Rs.5,85,84,115/- out of total payments of Rs.7,55, 86,468/- to the transporters on which the tax was liable to be deducted as per section 194C of the Act. It was not the case of the appellant that the tax was not deductible on these payments. The appellant has submitted that the tax was not deducted on these payments as the transporters had given declarations in Form No. 15-I as per section 194C(6) of the Act. On examination of such forms furnished by the appellant, it has been found that these are related to F.Y. 2017-18 as the same were given in April and May, 2017 which had been submitted to the office of the Pr. CIT on 28-06-2017. Therefore, the same are not relevant to the year under consideration and it cannot be a valid reason for not deducting the tax at source on the payments made in F.Y. 2016-17. It has been noted by the AO in the impugned order that the appellant had not filed the complete TDS statements of F.Y. 2016-17 wherein it was required to mention 'T' against the payments to transporters on which tax was not deducted due to filing of declaration under section 194C(6) by the concerned transporters. Printed from counselvise.com Page | 4 I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport. 5.3 The appellant has contended that these payments are covered under the Proviso to section 201(1) of the Act and therefore, it can not be treated as assessee in default in respect of these payments The said Proviso to section 201(1) provides as under- \"Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a payee or on sum credited to the account of a payee shall not be deemed to be an assessee in default in respect of such tax if such payee- 1. has furnished his return of income under section 139 2. has taken into account such sum for computing income in such return of income, and 3. has paid the tax due on the income declared by him in such return of income, INCOME TAX DEPARTMENT and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed.\" But, the appellant has placed no documents on record to demonstrate that the requirements as per above proviso had been fulfilled. Therefore, the contention is not tenable. 5.4 In view of the above facts and legal position, there is no infirmity in the action of the AO in treating the appellant as assessee in default as per section 201(1) of the Act in respect of payments of Rs.5,85,84,115/- to the transporters and in charging the tax in default along with interest under section 201(1A) of the Act. Therefore, the demand so raised by the AO is confirmed. Accordingly, the Grounds No. 1 & 2 are dismissed.” 3.1 Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 4. Rival submissions were heard and the record and the submissions made have been examined. It was submitted by the Ld. AR that the required documents were submitted before the Ld. CIT(A) which related to F.Y. 2017-18; however, a perusal of the Annexure 5 being Form No. 15-I filed in the paper book before us shows that some of the details like F.Y. etc. are not properly filled therefore, the certificates were treated for F.Y. 2017-18 as they were all dated 10/05/2017. The Ld. AR requested that the matter may be remanded to the Ld. AO as the assessee has sufficient evidence and the required certificates in support of the claim that no further TDS was liable to be deducted. Printed from counselvise.com Page | 5 I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport. 5. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). We find that at both before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee. The Ld. AR requested that the matter may be remitted to the Ld. AO while the Ld. DR supported the order of the Ld. CIT(A). After considering the facts of the case, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. AO as the assessee claims to have sufficient evidence in support of the relief claimed. We, therefore, set aside the order of the Ld. CIT(A) as well as of the Ld. AO and remit the matter to the Ld. AO to frame the order afresh, after affording an opportunity of being heard to the assessee and thereafter pass an order in accordance with law. The assessee shall not seek unnecessary adjournment and shall be at liberty to file all evidence in possession for the relief claimed. For statistical purposes, the appeal of the assessee is allowed. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 7th August, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 07.08.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 I.T.A. No.: 585/KOL/2025 Assessment Year: 2017-18 M/s. Rita Transport. Copy of the order forwarded to: 1. M/s. Rita Transport, Vill. & P.O. Bahula, Dist. Burdwan, West Bengal, 713322. 2. DCIT(TDS), Circle-4(1), Durgapur. 3. ADDL/JCIT(A)-1, Chandigarh. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "