PETROCIL ENGINEERING & CONSULTANTS PRIVATE LIMITED,VARKALA V. ITO (TDS), THIRUVANANTHAPURAM

ITA 225/COCH/2025

AI Insights

The case involves Petrocil Engineers & Consultants Pvt. Ltd., a company engaged in providing technical, engineering, and consultancy services to the petroleum, oil, gas, and chemical industries. The dispute arose from the Assessing Officer's decision, which was based on the auditor's qualification in Form No. 3CD, noting that the assessee had not deducted tax at source on various expenses amounting to Rs.39,73,181. This non-deduction was deemed inadmissible under section 40(a)(ia) of the Income Tax Act. The CIT(A) initially dismissed the assessee's appeal ex parte, leading to the current appeal before the Tribunal, which sought a more thorough examination of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633137 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SNR
• Assessee Lawyers: S. RAJEEV
• Keywords: TDS; Non-deduction of tax
• Section: 201(1); 40(a)(ia); 194C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Sonjoy Sarma, Judicial Member ITA No.225/Coch/2025 Assessment Years: 2022-23 Petrocil Engineers & Consultants Pvt. Ltd. Mel-Vettoor (PO)-695312, Varkala. PAN : AAGCP1454L. v. ITO (TDS), Thiruvananthapuram (Appellant) (Respondent) Appellant by : S. Rajeev, Adv. Respondent by : Smt. Leena Lal, Snr AR. Date of Hearing : 05.06.2025 Date of Pronouncement : 13.06.2025 O R D E R Per Sonjoy Sarma: This appeal is filed by the assessee against the order dated 30.10.2024 by the CIT, Appeal Addl/JCIT (A)-2, Pune (hereinafter referred to as ‘CIT(A)’] for the assessment year 2021–22. 2. Brief facts of the case are that the assessee is a Company and engaged in the business of rendering technical, engineering and consultancy serviced to petroleum, oil, gas and chemical industries. In this case, the Assessing Officer noted from Form No. 3CD filed by the assessee for financial year 2021-22 that the Auditor has qualified therein that the assessee has not deducted the tax at source (TDS) on various expenses claimed in the P&L A/c, amounting to Rs.39,73,181/- and hence, the same are inadmissible u/s 40(a)(ia) of the Act. After examining the facts of ITA No.225/Coch/2025 Petrocil Engineers & Consultants Pvt. Ltd 2 the case and submission made by the assessee, the Assessing Officer found that the assessee-deductor had contravened the TDS provisions as enumerated in the Income Tax Act, since no TDS was made against the aggregate amount of Rs.39,73,181/-, paid to different persons/parties, though the tax was required to be deducted at source thereon within the provisions of section 194C & 194J of the Act. As such, the Assessing Officer found the Appellant as 'an assessee in default u/s 201(1) of the Act for non-deduction of tax at source as per the provisions of section 194J/194C of the Act. Accordingly, the Assessing Officer had raised a demand of Rs. 4,93,050/- (inclusive of interest u/s 201(1A) of the Act), vide order dated 17.07.2024. 3. Aggrieved by the above order, the assessee preferred an appeal before the ld. CIT(A), however, the appeal of the assessee was dismissed ex parte by the ld. CIT(A) by confirming the additions so made by the Assessing Officer without properly examining the various details or merits of the case. 4. At the time of hearing, the AR stated that the ld. CIT(A) has passed an ex parte order without looking into merits of the case and going through the submissions made before the lower authorities. Hence, in the interests of justice, the Tribunal may remand back the matter to the file of the ld. CIT(A) with a direction to re-examine the issue afresh. 5. On the other hand, the ld. DR supported the order of the authorities below. 6. We, after hearing the rival submission and perusing the materials available on record, find that the appeal of the assessee was dismissed ex parte by the ld. CIT(A) confirming the order of the ITA No.225/Coch/2025 Petrocil Engineers & Consultants Pvt. Ltd 3 Assessing Officer without looking into merits of the case and going through the submissions or documents produced before the lower authorities. Therefore, in the interests of justice and fair play, we deem it necessary to remand back the whole issue to the file of the ld. CIT(A) with a direction to re-examine the issue afresh. We also direct the assessee to file supporting documents in order to substantiate his case before the ld. CIT(A) and the ld. CIT(A) will pass order in accordance with law after giving proper and sufficient opportunities of hearing to the assessee. 7. In terms of the above, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 13.06.2025. Sd/- Sd/- (Inturi Rama Rao) (Sonjoy Sarma) Accountant Member Judicial Member Cochin, Dated: 13. 06.2025. RS Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), Concerned. 4. The CIT Concerned. 5. The DR, ITAT, Cochin. 6. Guard File. Asst. Registrar/ITAT, Cochin "