WIND WORLD FINANCIAL CONSULTANCY PRIVATE LIMITED,MUMBAI V. ITO, TDS WARD 2(3)(3), MUMBAI

ITA 5552/MUM/2024

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The case involves Wind World Financial Consultancy Pvt. Ltd., the appellant, contesting an order by the Commissioner of Income Tax (Appeals), which upheld the TDS liability and interest imposed by the AO under sections 201 and 201(1A) of the Income Tax Act, 1961. The dispute centered on alleged non-payment of TDS by the assessee for the financial year 2015-16. The AO had noted discrepancies between the TDS deducted as per the assessee's records and the amounts reflected in the government treasury, leading to the imposition of additional tax and interest. The assessee argued that all TDS had been duly paid, a claim that was not substantiated during the initial proceedings due to non-cooperation from the assessee. The Tribunal's decision to remit the case back to the AO was based on the need for a thorough verification of the facts and compliance with the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783420 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 29-10-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARY
• Assessee Lawyers: RAVI GANATRA
• Keywords: Opportunity of being heard; Principle of natural justice; TDS
• Section: 201(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE HON’BLE SHRI SAKTIJIT DEY, VICE PRESIDENT & MS PADMAVATHY S, AM I.T.A. No. 5552/Mum/2024 (Assessment Year: 2016-17) Wind World Financial Consultancy Private limited A9, Wind World Tower, Veera Desai Road, Andheri West, Mumbai 400053 PAN: AABCE2193G Vs. ITO, TDS Ward 2(3)(3) 910, 9th Floor, Cumballa Hill, MTNL Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai 400026 Appellant) : Respondent) Assessee by : Shri Ravi Ganatra, Adv. Revenue by : Shri. SwapnilChoudhary Sr. AR Date of Hearing : 27.10.2025 Date of Pronouncement : 04.11.2025 O R D E R Per Padmavathy S, AM: This appeal by the assessee is against the order of the Commissioner of the Income Tax (Appeals)/ADDL/JCIT(A)-2, Noida (in short \"FAA\") passed u/s. 250 of the Income Tax Act, 1961 (the “Act”) dated 30.08.2024 for AY 2015-16. “1. On the facts and in the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal), TDS erred in not quashing the order passed by the Assessing Officer u/s 201/201(1A) of the Income Tax Act, 1961, Printed from counselvise.com 2 ITA NO. 5552/Mum/2024 Wind World Financial Consultancy Pvt. Ltd. 2. On the facts and the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal), TDS erred in upholding TDS liability of Rs 1.19.831/ of the appellant company which includes alleged outstanding TDS of Rs 53,377/-u/s 201(1) and interest of Rs 66,454/- u/s 201(1A) of the Act, despite the fact that during the TDS proceedings, the appellant vide reply dated 12.12.2022 submitted copy of party wise and section wise details of tax deducted at source for FY 2015-16 on perusal of which it can be observed that the outstanding TDS of Rs 15,000/- as appearing in the Form 3CD has been paid vide challan no: 45565, dated 23.11.2016 and therefore there is no outstanding TDS for the year under consideration. Thus, it is evident that the Ld Assessing Officer failed to take the said enclosures into consideration before passing the impugned order u/s 201/201(1A). 3. On the facts and the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal), TDS erred in upholding the outstanding TDS amounting to Rs 38,377/- u/s 201(1) and interest of Rs 47,779/-w/s 201(1A) of the Act as allegedly appearing in OLTAS, despite the fact that the TDS liability for the year under consideration has been paid in toto and there is no further outstanding liability for the year under consideration. 4 On the facts and the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal), TDS erred in passing the impugned order without providing an opportunity of being heard despite the fact that appellant vide letter dated 13.06.2024 had requested for adjournment, however, the Ld Commissioner of Income Tax (Appeal), TDS without disposing of the said application, passed the impugned order without providing any further opportunity of being heard resulting in gross violation of the principles of natural justice. 5. On the facts and the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal), TDS erred in passing the impugned order u/s 250 of the Act, dated 30.08.2024 under Assessment Year 2015-16 despite the fact that appeal has been filed for A.Y. 2016-17 ie F.Y. 2015-16. This discrepancy in the assessment year, as stated in the impugned order, has resulted in confusion and unjust charges, necessitating the rectification of the said order to reflect the correct assessment period. 6. The appellant craves leave to add, alter, amend, modify, vary, delete and/or withdraw any of the grounds of appeal. Printed from counselvise.com 3 ITA NO. 5552/Mum/2024 Wind World Financial Consultancy Pvt. Ltd. 7. The appellant prays before the Hon'ble Income Tax Appellate Tribunal, Mumbai to delete the alleged additions made by the Assessing Officer and confirmed by the Learned Commissioner of Income Tax (Appeal), TDS.” 2. The assessee is a private limited company. A spot verification u/s. 133B(2) of the Act, was carried out on 06.08.2018 in assessee's case. During the course of verification, the AO noticed certain TDS non-compliance and accordingly issued a notice as to why the provisions of Section 201(1)/(1A) cannot be applied. The assessee filed details vide letter dated 12.12.2022. The AO based on the details submitted noticed that in the following cases tax has been deducted, but not paid into the government treasury account. The relevant findings of the AO in this regard are extracted below – 7. It was noticed that following expenses, on which TDS has been deducted by the assessee but not paid to the government treasury. Hence, it is held as assessee in default within the meaning of section 201 of the Act for F.Y. 2015-16 and accordingly, tax liability is computed as below: 8. As per Tax Audit Report, the assessee has deducted TDS of Rs.92,30,053/- on various expenses, out of which Rs. 15,000/-was not paid to the Government treasury account.If so, the balance TDS amount of Rs.92,15,053/- should appear in OLTAS. However, it is found that TDS amount of Rs. 91,76,676/- only appearing in OLTAS which shows that the assessee has not deposited the balance amount of Rs.38,377/- to the Govt. Account. Hence, it is held as assessee in default Printed from counselvise.com 4 ITA NO. 5552/Mum/2024 Wind World Financial Consultancy Pvt. Ltd. within the meaning of section 201 of the Act for F.Y. 2016-17 and accordingly, tax liability is computed as below: 3. Accordingly, the AO made an addition of Rs. 53,377 u/s. 201(1) and interest of Rs. 66,454 u/s. 201(1A) of the Act. Aggrieved with the assessee filed further appeal before the ld. CIT(A). Since the assessee did not appear and did not submit any details before the ld. CIT(A) the additions made were confirmed by the ld. CIT(A) ex-parte. 4. We heard the parties and perused the material on record. The ld. AR submitted that the AO has made the addition without verifying the facts properly. The ld AR further submitted that the assessee has paid all the tax deducted at source and that there is no TDS outstanding in assessee's case as held by the AO. The ld. DR on other hand, vehemently, argued that the assessee has not co- operated during assessment as well as appellate proceedings and has not submitted any details in support of the claim that the TDS has been remitted subsequently. On perusal of the AO's order we notice that the AO has come to the conclusion that the assessee has not deposited certain amounts to the government account based on the comparison of tax audit report with OLTAS and accordingly treated the difference as an addition u/s. 201(1) and also levied interest on the same u/s. Printed from counselvise.com 5 ITA NO. 5552/Mum/2024 Wind World Financial Consultancy Pvt. Ltd. 201(1A). We also notice from the AO's order that the assessee has not submitted relevant details and has also not responded to the notices of the CIT(A). Further the claim of the assessee that the tax deducted has been duly paid subsequently and that there is no outstanding needs factual verification. Accordingly, in the interest of natural justice, and fair play we are remitting the appeal back to the AO. The AO is directed to verify the claim that all payments towards TDS has been made without any outstanding by calling for necessary details to allow the claim in accordance with law. The assessee is directed to furnish the required details in support of its claim without seeking unnecessary adjournments and co-operate with the assessment proceedings. It is order accordingly. 5. In the result, the appeal of the assessee is allowed for the statistical purposes. Order pronounced in the open court on 04-11-2025. sd/- sd/ (SAKTIJIT DEY) (PADMAVATHY S) Vice President Accountant Member Divya R. Nandgaonkar Stenographer Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "