DBS BANK LIMITED,MUMBAI V. THE INCOME TAX OFFICER (INTERNATIONAL TAXATION) - WARD 2(1)(2), MUMABI

ITA 966/MUM/2025

AI Insights

The case involves DBS Bank Limited, a foreign bank operating in India, which appealed against the order of the Commissioner of Income-tax (Appeals) concerning an assessment year 2015-16. The primary contention was the improper dismissal of their appeal by the CIT(A) due to alleged non-compliance with procedural requirements, despite the bank's submission of a response to a notice. The Tribunal noted that the CIT(A) had not considered the bank's response and had incorrectly assumed jurisdiction over the appeal, which should have been under the jurisdiction of CIT(A)-56, Mumbai, and not under the e-Appeals Scheme as per the CBDT order. The Tribunal found merit in the bank's arguments regarding jurisdiction and procedural lapses, leading to the decision to remand the case back for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46913 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Assessee Lawyers: MADHUR AGARWAL
• Keywords: TDS; Wholly owned subsidiary; Non-deduction of tax
• Section: 195; 250; 201; 201(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & MS. PADMAVATHY S, ACCOUNTANT MEMBER ITA No. 966/MUM/2025 (AY : 2015-16) (Physical hearing) DBS Bank Limited (DBS Bank Limited, India branches now Converted into wholly owned subsidiary DBS Bank India Limited, 1st Floor, Express Tower, Nariman Point, Mumbai – 400021. [PAN No. AAACT 4652 J ] Vs ITO, (International Taxation), Ward-2(1)(2) Kautilya Bhawan, Bandra Kurla Complex, Mumbai-400051 Appellant / assessee Respondent / Revenue Assessee by Shri Madhur Agarwal, Advocate Revenue by Shri Krishna Kumar, Sr. DR Date of institution of appeal 12.02.2025 Date of hearing 08.04.2025 Date of pronouncement 08.04.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the assessment order of ld. CIT(A) dated 17.12.2024 for A.Y. 2015-16. The assessee has raised the following grounds of appeal: 1. The Commissioner of Income-tax Appeals, Addl./JCIT(A)-11, Delhi (hereinafter referred to as \"the AddI./JCIT(A)\") erred in passing the order under appeal, ex-parte and not adjudicating any ground of appeal on the basis that there was no compliance by the Appellant to the notices of hearing, that the Appellant has not pursued the appeal despite being granted several opportunities, notwithstanding that the Appellant had furnished response to the notice dated 11 December 2024 within the due date. 2. The Addl./JCIT(A) erred in passing the order under section 250 for assessment year 2015-16 which is invalid and without any jurisdiction as the Appellant is a non-resident and the alleged appeal belongs to International ITA No. 966/Mum/2025 DBS Bank Limited 2 charge and therefore, ought to be disposed by the jurisdictional Commissioner of Income-tax (Appeals) and not, under the e-Appeals Scheme, 2023 in terms of CBDT order no. F. No. 370149/97/2023-TPL dated 16 June 2023 3. The Addl./JCIT(A) erred in passing order under section 250 for assessment year 2015-16 by issuing notice of hearing for alleged appeal no, NFAC/2014- 15/10219735 filed against order dated 31 January 2023 under section 201 for assessment year 2015-16, without appreciating the fact that the said notice does not belong to appeal filed by the Appellant against order under section 201 for assessment year 2015-16. 4. The Appellant submit that they have filed appeal no. CIT (A) 56, Mumbai/10276/2014-15 against order dated 25 March 2022 passed under section 201 for assessment year 2015-16 with the office of the CIT(A)-56, Mumbai. 5. The Addl./JCIT(A) erred in passing order under section 250 for assessment year 2015-16 by incorrectly disposing appeal against order dated 31 January 2023 passed under section 201 for assessment year 2016-17 and not assessment year 2015-16 for which the notice of hearing was issued. 6. The Addl./JCIT(A) erred in not appreciating the Appellant's letter dated 16 December 2024 (sent via emall dated 16 December 2024) wherein the Appellant had mentioned that it was unable to locate the appeal as stated in the notice of hearing. 7. Addl./JCIT(A) erred in not providing a copy of communication for transfer of Appellant's appeal from Mumbal to Delhi jurisdiction, inspite of a specific request by the Appellant. 8. The Addl./JCIT(A) erred in confirming that the Appellant be treated as an \"assessee in default\" under section 201 of the Act for alleged non-deduction of tax at source under section 195 on service fees of Rs.1,07,60,595 paid to Visa Worldwide Pte Ltd., Singapore (VISA) for assessment year 2015-16. 9. The appellant reserves the right to amend, alter or add to the grounds of appeal.” ITA No. 966/Mum/2025 DBS Bank Limited 3 2. Rival submissions of both the parties have been heard and record perused. The ld. Authorised Representative (AR) of the assessee submits that ld. CIT(A) dismissed the appeal of the assessee for the want of submission by taking view that despite allowing opportunity vide notice dated 03.12.2012 and 11.12.2024, the assessee has not furnished any submission. The ld. AR of the assessee submits that in response to notice under section 250 dated 11.12.2024, the assessee filed its reply/ response on 16.12.2024, which has not been considered by ld CIT(A). In the reply / submission, the assessee pointed out that they are unable to find out (locate) impugned order and corresponding appeal mentioned in the show cause notice. The assessee also submitted that jurisdiction in case of assessee is in Mumbai before CIT(A) – 56, Mumbai. The ld. AR by referring the notice under section 250 dated 11/12/2024 issued by NFAC/CIT(A) shown us that such notice contained the reference to assessment year (A.Y.) 2015-16. Though, the said appeal relates to order passed under section 201 of Income Tax Act on account of TDS under section 195 against payment to Visa Worldwide Pte Ltd (VISA), which is to be considered in accordance with financial year, therefore, due to such confusion, the assessee could not make timely compliance. Even otherwise, appeal against addition in A.Y. 2015-16 was pending before CIT(A)-56, Mumbai. The ld. AR of assessee submits that assessee is a foreign bank in India, being non- resident assessee and under jurisdiction of Deputy Commissioner of Income Tax (DCIT) (International-taxation)-2(1)(2) Mumbai and any appeal arising out of any addition in the assessment order or otherwise is to be heard in physical manner and not under e-appeal Scheme-2023 as per CBDT Circular No. ITA No. 966/Mum/2025 DBS Bank Limited 4 370149/97/2023-TPL dated 16.06.2023. The ld. AR of the assessee submits that since there is no adjudication of appeal on merit, the reply in response to notice under section 250 dated 11.12.2024, the same has not been considered therefore, matter may be restored back to the file of ld CIT(A)-56 Mumbai, for adjudicating all the issues afresh. He undertakes on behalf of the assessee to be vigilant in future in making timely compliance. 3. On the other hand, ld. Sr. DR for the Revenue submits that he has no objection if the matter is restored back to the file of CIT(A) for adjudicating the grounds of appeal fresh and in accordance with law. 4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that order under section 201(1) and 201(1A) r.w.s. 195 was passed against the assessee on 31.01.2023 by raising a demand of Rs. 20,28,358/-. Aggrieved by the demand, the assessee filed appeal before CIT(A). In Form 35, the assessee mentioned relevant F.Y. 2015-16 by clearly specifying the details of order under section 201 dated 31.01.2023. The appeal of the assessee was migrated to Faceless Appeal Centre New Delhi. We find that ld. CIT(A) issued two show cause notices in quick succession that is first notice dated 03.12.2024 for making compliance by 09.12.2024 and second notice dated 11.12.2024 for making compliance by 16.12.2024. The assessee in response to notice dated 11.12.2024 responded and sought certain clarifications and also pointed out their jurisdiction is with ld. CIT(A)-56, Mumbai. We find that no cognizance of such reply / letter was taken by ld. CIT(A). The ld. CIT(A) is straightway held that no response was received by assessee. The appeal of assessee was ITA No. 966/Mum/2025 DBS Bank Limited 5 dismissed for the want of submission without discussing the merits of the case. We find that assessee is a foreign bank in India and their jurisdiction is with DCIT 1(1)(2) Mumbai. Thus, any appeal arising out of addition or against other orders is to be heard in physical manner, as per CBDT Circular (supra). We also find that due to technicalities all reference vis a vis financial year and / versus assessment year, no effective compliance could be made by assessee, though assessee responded to the show cause notice dated 11.12.2024. The ld CIT(A) failed to take cognizance of such reply. Therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(A) to adjudicate the issue afresh on merit and as per CBDT Circular dated 16.06.2023. Needless to direct that before passing the order afresh, the ld. CIT(A) shall allow reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in timely. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose. 5. In the result, the appeal of assessee is allowed for statistical purpose. Order pronounced in the open Court on 08/04/2025. Sd/- PADMAVATHY S ACCOUNTANT MEMBER - Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 08 /04/2025 Biswajit ITA No. 966/Mum/2025 DBS Bank Limited 6 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "