Maya Buildcon Pvt. Ltd Vs DCIT (ITAT Delhi)
The appeal before the ITAT Delhi arose from the order dated 19.11.2025 passed by the Commissioner of Income Tax (Appeals)/Addl./JCIT(A), Gwalior for Assessment Year 2017-18 in proceedings under Section 154 of the Income-tax Act, 1961. The assessee challenged the rectification order dated 21.03.2024 passed by the Assessing Officer and upheld by the lower appellate authority, whereby a disallowance of ₹26,56,715 under Section 40(a)(ia) was made on the ground of non-deduction of TDS on interest payments made to an NBFC. Both parties reiterated their respective stands on the validity of the rectification proceedings as well as the merits of the Section 40(a)(ia) disallowance. The Tribunal noted that the original assessment had been completed under Section 143(3) on 25.12.2019. It found that the impugned rectification order did not indicate how a debatable issue relating to deduction of TDS, which required detailed enquiries, could be rectified under Section 154. Relying on T. S. Balaram, ITO v. Volkart Bros. (1971) 82 ITR 40 (SC), the Tribunal held that such an issue could not be the subject matter of rectification proceedings under Section 154. Accordingly, it reversed the impugned rectification order on this ground and allowed the assessee’s appeal.
