ROYAL PALMS (INDIA) PRIVATE LIMITED ,MUMBAI V. ITO WARD 13(3)(1), MUMBAI

ITA 1564/MUM/2025

AI Insights

The case involves Royal Palms (India) Pvt. Ltd., which faced proceedings under sections 201(1) and 201(1A) of the Income Tax Act, 1961, concerning Tax Deduction at Source (TDS) compliance for the assessment years 2015-16 and 2016-17. The Assessing Officer (AO) deemed the assessee as defaulting in TDS deductions and raised demands for tax and interest. The assessee's appeals to the First Appellate Authority were dismissed for non-prosecution, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the handling of the assessee's appeals and directed a re-examination of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314090 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVINDRAO J. NINAWE
• Keywords: Set aside; Opportunity of being heard; TDS
• Section: 201(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, V.P. AND SHRI NARENDRA KUMAR BILLAIYA, AM ITA No. 1563 & 1564/Mum/2025) (Assessment Years: 2016-17 & 2015-16) Royal Palms (India) Pvt. Ltd., Unit No.26, Aarey Milk Colony, Goregaon East, Mumbai Vs. CIT(Appeals)/Addl. JCIT(A), Faridabad. ITO, Ward 13(3)(1), Mumbai. PAN/GIR No. AABCR 9424R TAN No. MUMR15456A (Applicant) : (Respondent) Applicant by : Shri Rohan Despande Respondent by : Shri Govindrao J. Ninawe (Sr. DR) Date of Hearing : 05.05.2025 Date of Pronouncement : 05.05.2025 O R D E R Per Saktijit Dey, VP: The captioned appeals by the assessee arise out of two separate orders of Ld. ld. Addl./JCIT (Appeal), Indore pertaining to Assessment Years (AY) 2015-16 and 2016-17. 2. The basic grievance of the assessee is against dismissal of its appeal by learned First Appellate Authority without affording adequate opportunity of being heard. 3. We have heard parties and perused the materials on record. 4. Briefly the facts are, the assessee is a resident corporate entity. In course of enquiry conducted u/s. 133B of the Income Tax Act, 1961 (in short the ‘Act’) to 2 ITA No.1563 & 1564/Mum/2025 Royal Palms India Pvt. Ltd. Vs. ITO Ward 13(3)(1), Mumbai verify Tax Deduction at Source (TDS) compliance, certain irregularities regarding deduction of tax at source was noticed. Accordingly, proceedings u/s. 201(1)/201(1A) of the Act were initiated against the assessee for the assessment years under dispute. In response to show cause notice issued by the Assessing Officer (AO), the assessee furnished certain details. However, being unconvinced with the submissions of the assessee, the AO treated the assessee as an assessee in default in terms with Section 201(1) of the Act. Accordingly, the AO passed orders u/s. 201(1)/201(1A) of the Act raising demand of tax and interest on the assessee. 5. Being aggrieved with such orders passed by the AO, the assessee preferred appeals before ld. First Appellate Authority. However, by the impugned orders, learned First Appellate Authority has dismissed the appeals of the assessee. On a bare perusal of the orders passed by learned First Appellate Authority, it is observed that in sum and substance, learned First Appellate Authority has dismissed assessee’s appeals for non-prosecution. It is further observed from the orders of learned First Appellate Authority, the first notice of hearing was issued to the assessee on 03.03.2020. In response to which, the assessee sought an adjournment vide letter dated 05.03.2020. Thereafter, another notice of hearing was issued on 22.01.2021, to which, as alleged by the AO, no compliance was made. Thereafter, no action was taken by learned First Appellate Authority with regard to the appellate proceedings. Long after, on 05.02.2025, another notice of hearing was issued to the assessee stating that it will be treated as last and final opportunity. Since, assessee 3 ITA No.1563 & 1564/Mum/2025 Royal Palms India Pvt. Ltd. Vs. ITO Ward 13(3)(1), Mumbai did not respond, as alleged, learned First Appellate Authority proceeded to dispose of the appeals ex-parte by dismissing them. In the first place, it is not understood why the appellate proceedings were kept pending from the year 2020 till 2025 despite issuance of hearing notice. It is also surprising that after the second notice of hearing was issued on 22.02.2021 no further action was taken for completion of proceeding and after long lapse of almost three years, ld. First Appellate Authority again issued a notice of hearing on 05.02.2025. 6. Be that as it may, from the submissions made by the assessee before the AO, it is observed that the assessee has pleaded that it has itself disallowed the payments, subject to TDS, while computing its total income. The aforesaid submission of the assessee requires factual verification. Learned First Appellate Authority has failed to verify these facts as she has passed the impugned order, more or less, in limine virtually dismissing the appeals for non-prosecution. The impugned orders passed by learned First Appellate Authority do not fall in the category of speaking order. 7. In view of above aforesaid, we are inclined to set aside the impugned orders of learned First Appellate Authority and restore the issues arising in the appeals to the file of learned First Appellate Authority for de-novo adjudication. Needless to say, the assessee must be provided fair opportunity of being heard before deciding the issues. We further direct the assessee to respond to the notice of hearing to be issued by learned First Appellate Authority and cooperate in finalizing the proceedings. 4 ITA No.1563 & 1564/Mum/2025 Royal Palms India Pvt. Ltd. Vs. ITO Ward 13(3)(1), Mumbai 8. In the result, appeals are allowed for statistical purposes. Order pronounced in the open court on 05.05.2025 Sd/- Sd/- (N.K. BILLAIYA) (SAKTIJIT DEY) Accountant Member Vice President Mumbai: Dated : 05.05.2025 Aks/- Copy of the Order forwarded to : 1. The Applicant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai "