The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service tax demand cannot be confirmed merely based on Form 26AS.
The bench of Dr.. Rachna Gupta (Judicial Member) has observed that while discharging the onus department has not produced any evidence on record. Even the Income Tax Returns and Form 26 AS does not support the department’s allegation as no TDS is shown deducted in the documents. The sole basis for confirmation of the demand is the tax deduction (TDS) under Section 194H of the Income Tax Act.
The department got the details of amount received by the appellant/service provider during the Financial Year 2015-16 and 2017-18 from the income tax returns filed by the appellant under Section 194H of Income Tax Act, 1961.
The appellant was required to file the supporting documents/financial records for the said period which were submitted by the appellant. On examination of those documents, department found that the appellant has received an amount of Rs.17,16,300/- during Financial Year 2015-16, Rs.15,37,300/- during Financial Year 2016- 17 and Rs.14,62,500/- during Financial Year 2017-18 against the sale of services alleging the said amount to be received as commission from various recipients.
The appellant was allegedly liable to pay service tax on the said amount. The Show Cause Notice proposed the service tax to be recovered along with the proportionate interest and appropriate penalties. The proposal was initially confirmed. Appeal against the order has been rejected.
The appellant submitted that the demand has wrongly been confirmed against the appellant. There is no evidence produced by the department to show that the income received by the appellant was towards commission and TDS has been deducted under Section 194H of the Income Tax Act. On the contrary, it is apparent from Form 26 AS itself for the disputed period, that no amount was deducted under Section 194H of the Income Tax Act. The authorities have not considered the documents provided by the appellant. The entire case is based on the presumptions.
The department contended that except submitting certain documents not even reply to show cause notice was filed by the appellant. The Order was also passed ex parte. Thus, there was no evidence produced by the appellant to falsify the allegations. No evidence has been produced to show that the appellant was engaged in the pandal/shamina and catering services. Hence there is no infirmity in the order under challenge.
The tribunal held that when there is no evidence of TDS being deducted, the entire basis for confirmation of demand is absolutely redundant. There is nothing on record to falsify that the appellant is the service provider for pandal/shamina and catering services. There is also no denial of the fact that while providing these services there is a transfer of goods involved. In these circumstances, the appellant was otherwise entitled for the abatement. The impugned demand has included the entire amount received by the appellant. These observations are sufficient to hold that the confirmation of demand is not sustainable.
Case Details
Case Title: Manoj Kumar Anand Versus Commissioner of Central GST and Central Excise
Case No.: Service Tax Appeal No. 54683 of 2023
Date: 17.10.2025
Counsel For Appellant: Jitin Singhal, Advocate
Counsel For Respondent: Rohit Issar, Authorized Representative
Read More: Assessment Proceedings Can’t Be Continued Against Legal Heir Of Deceased Assessee: CESTAT
