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Judgment
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A), Gwalior’s order dated 19.11.2025 having DIN and order no. ITBA/APL/S/250/2025-26/1082756337(1), involving proceedings under section 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
We notice at the outset during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities’ respective rectification dated 21.03.2024 invoking section 40(a)(ia) disallowance of Rs.26,56,715/- on account of non-deduction of TDS on interest payments made to NBFC as upheld in the lower appellate discussion.
Both the parties vehemently reiterate their respective stands against and in support of the impugned rectification in law as well as section 40(a)(ia) disallowance on merits. We make it clear that the learned Assessing Officer had admittedly framed his section 143(3) assessment on 25.12.2019. This being the clinching factual position, we are of the considered view that there is not even an indication in the impugned rectification order as to how such a debatable issue of TDS deduction requiring detailed enquiries could be sought to be rectified in section 154 proceedings as held in T. S. Balaram, ITO v Volkart Bros (1971) 82 ITR 40 (SC). We thus reverse the impugned rectification for this precise reason in the assessee’s favour and against the department in very terms.
This assessee’s appeal is allowed.