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2025 Supreme(Online)(ITAT) 3716
INCOME TAX APPELLATE TRIBUNAL (KOLKATA BENCH)
SHRI GEORGE MATHAN, J, SHRI RAKESH MISHRA, ACJ
M/s. Rita Transport – Appellant
Versus
DCIT(TDS), Circle-4(1), Durgapur – Respondent
I.T.A. No.: 585/KOL/2025
For the Appellants/Petitioners: S.K. Kamaluddin, AR
For the Respondents: S.B. Chakraborthy, Sr. DR
The appeal highlights the requirements under TDS provisions and the need for adequate documentation in claims of non-deduction.
Headnote:This matter pertains to an appeal against an order by the Addl/JCIT(A) under section 250 of the Income Tax Act, 1961 for AY 2017-18, focusing on alleged failures to deduct TDS under sections 201(1) and 201(1A), and the imposition of late fees. The court determined the requirements under section 201 and found insufficiencies in the appellant's substantiation. The appeal is remitted for further considerations by the Assessing Officer.
Result: Appeal of the assessee is allowed for statistical purposes.
| Table of Content |
|---|
| 1. need for compliance with tds provisions and adequate representation in tax appeals. (Para 1 , 4) |
| 2. failure to document tds obligations under relevant sections can lead to adverse tax conclusions. (Para 2 , 3 , 5) |
| 3. remittance of appeal for further proceedings indicates court's intention for fair adjudication. (Para 6) |
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.
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 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 trans
