Corporate Infrastructure Services Private Ltd, Bangalore V. DCIT, CIRCLE - 11(2), Bangalore

ITA 1080/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5596 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: SARANGAN SR
• Keywords: Principle of natural justice; Condonation of delay
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1080/BANG/2010 ASSESSMENT YEAR : 2005-06 M/S. CORPORATE INFRASTRUCTURE SERVICES PRIVATE LTD., NO.9, KING STREET, OFF RICHMOND ROAD, BANGALORE 560 025. : APPELLANT VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(2), BANGALORE. : RESPONDENT APPELLANT BY : SHRI SARANGAN, SR. COUNSEL RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL.CIT(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL INSTITUTED BY THE ASSESSEE COMPANY CORPORATE INFRASTRUCTURE SERVICES PRIVATE LIMITED IS DIRECTED AGAINST THE ORDER OF LD. CIT (A) I, BANGALORE, IN ITA NO. 348/DC 11(2) / A-I/07-08 DATED: 10.8.2010 FOR THE ASSESSMENT YEAR 2005-06 . 2. THE ASSESSEE COMPANY [THE ASSESSEE IN SHORT ] HAD RAISED SIX GROUNDS UNDER VARIOUS CAPTIONS IN AN EXTENSIVE AND ILLUSTRATIVE MANNER, IN ITA NO.1080/BANG/10 PAGE 2 OF 8 WHICH GROUND NOS. I AND VI BEING COMMON AND DEPICT NO ISSUES, THEY DO NOT SURVIVE FOR ADJUDICATION. IN THE REMAINING GR OUNDS, THE ESSENCES OF ISSUES RAISED ARE REFORMULATED, IN A CONCISE MANNER , AS UNDER: THE LD. CIT(A) HAD ERRED (I) IN PASSING AN EX-PARTE ORDER WITHOUT CONSIDERING TH E FACT THAT THE NOTICE FOR APPEAL HEARING WAS SERVED ON THE ASSESSE E AFTER THE SCHEDULED TIME OF HEARING; (II) IN NOT ADMITTING THE APPEAL ITSELF BY HOLDING THAT THE APPEAL WAS FILED BELATEDLY [BY 86 DAYS] AND THAT NO PETITION FOR CON DONATION OF DELAY WAS FORTHCOMING; & (III) IN HOLDING THAT THE APPEAL ONLY AGAINST WRONG QUAN TIFICATION OF INTEREST AND WITHOUT ANY OTHER GROUNDS OF APPEAL AGAINST THE ASSESSMENT WAS NOT MAINTAINABLE. 3. BRIEFLY STATED, THE ASSESSEE, FOR THE AY UNDER C HALLENGE, HAD FURNISHED ITS RETURN OF INCOME, ADMITTING A TOTAL L OSS OF RS.19.32 LAKHS AND CLAIMING A REFUND OF RS.1,99,11,424/- CRORES ON THE BASIS OF TDS CERTIFICATES APPENDED WHICH WAS PROCESSED U/S 143(1 ) OF THE ACT VIDE INTIMATION DT.19.11.2007 WHICH CONTAINED REFUND OF RS.2,12,44,190/- [TDS OF RS.1,94,90,079/- + INTEREST OF RS.17,54,109/-] U /S 244A OF THE ACT. WHILE DOING SO, THE AO HAD GIVEN CREDIT ONLY TO THE EXTEN T OF RS.1,94,90,079/- BEING TDS AS AGAINST RS.1,99,11,424/- CLAIMED. THE SHORTFALL IN GIVING CREDIT FOR TDS OF RS.4.21 LAKHS REPRESENTED THE AM OUNT OF TDS EFFECTED BY M/S. VIBRATIONS EFX PVT. LTD. ON THE AMOUNTS OF REN T OF RS.19.80 LAKHS PAID TO THE ASSESSEE. IT WAS THE CASE OF THE ASSESSEE TH AT THE RENTAL INCOME OF RS.19.80 LAKHS WAS INCLUDED IN THE OPERATIONAL INCO ME OF RS.8.12 CRORES AS PER THE P & L ACCOUNT WHICH WAS OFFERED TO TAX. IT WAS THE CASE OF THE ASSESSEE THAT THE SAME HAS BEEN DULY ACCEPTED AND T HE RETURN WAS ITA NO.1080/BANG/10 PAGE 3 OF 8 PROCESSED U/S 143(1) OF THE ACT. HOWEVER, ACCORDIN G TO THE ASSESSEE, CREDIT FOR TDS OF RS.4.21 LAKHS WHICH WAS DEDUCTED OUT OF RENT RECEIPTS OUGHT TO HAVE BEEN EXTENDED TO THE ASSESSEE WITHOUT ASSIGNING ANY REASON. WHILE PROCESSING THE RETURN U/S 143(1) OF T HE ACT, THE AO HAD ORDERED THE REFUND OF RS.1,94,90,079/- AND INTEREST OF RS.17,54,109/-, HOWEVER, THE BASIS OR WORKING TO ARRIVE AT SUCH A F IGURE WAS NOT MADE AVAILABLE TO THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE HAD APPROACHED THE LD. C IT (A) FOR SOLACE. HOWEVER, THE LD. CIT (A) HAD DISMISSED THE APPEAL W ITH THE FOLLOWING OBSERVATIONS: - THE APPEAL HAS BEEN FILED LATE BY 86 DAYS, BUT, NO PETITION FOR CONDONATION OF DELAY WAS FILED ALONG WITH FORM NO.3 5 AND, THEREFORE, APPEAL IS NOT ADMITTED; - SHELTERING HIMSELF WITH THE CASE LAWS OF (A) ASSOCIATED STONE INDUSTRIES (KOTAH ) LTD. V. CIT (1 997) 224 ITR 560 (SC); (B) CIT V. PRAKASHNATH (2008) 306 ITR 1 (HP); (C) CENTRAL PROVISIONS MANGANESE ORE CO. LTD. V. CIT (1 986) 160 ITR 935 (SC); (D) NATIONAL PRODUCTS V. CIT (1977) 108 ITR 935 (KAR); & (E) S.K.MANU CHAUDHURY V. DCIT (2008) 300 ITR 216 (BOM) AN APPEAL AGAINST ALLEGED WRONG QUANTIFICATION OF I NTEREST ONLY WITHOUT ANY OTHER GROUNDS OF APPEAL AGAINST THE ASSESSMENT IS NOT MAINTAINABLE. IN VIEW OF THE ABOVE, THE APPEAL IS TREATED AS DISM ISSED FOR STATISTICAL PURPOSE. HOWEVER, THE APPELLANT IS FREE TO MOVE TO AO U/S 154 OF THE ACT AS PER LAW FOR REDRESSAL OF ITS GRIEVANCE. 5. AGITATED, THE ASSESSEE HAS COME UP BEFORE US F OR SUCCOR. SHRI G. SARANGAN, THE SR. COUNSEL, ARGUED ON BEHALF OF THE ASSESSEE THAT - INTIMATION DATED 19.11.2007 ON PROCESSING OF THE AS SESSEES RETURN OF INCOME U/S 143(1) OF THE ACT ALONG WITH THE REFUND ORDER NO.157867 WAS SERVED ON THE ASSESSEE ONLY ON 14.2.2008; THAT AS P ER CLAUSE (2) TO S.249 ITA NO.1080/BANG/10 PAGE 4 OF 8 OF THE ACT, THE APPEAL SHALL BE PRESENTED WITHIN TH IRTY DAYS FROM THE DATE OF SERVICE OF ORDER; AND THAT THE APPEAL WAS PRESEN TED ON 11.3.2008 AGAINST THE INTIMATION DT.19.11.2007 WHICH WAS REC EIVED BY THE ASSESSEE ON 14.2.2008, AND, THUS, NON-ADMISSION OF THE ASSES SEES APPEAL BY THE LD. CIT (A) WAS CONTRARY TO THE MATERIAL AVAILABLE ON RECORD; - THE LD. CIT (A)S ASSUMPTION THAT AN APPEAL AGAI NST THE ALLEGED WRONG QUANTIFICATION OF INTEREST ONLY WITHOUT ANY OTHER G ROUNDS OF APPEAL AGAINST AN ASSESSMENT NOT MAINTAINABLE GOES AMISS IN THE SENSE THAT - (I) NON-GRANT OF CREDIT FOR TDS CERTIFICATE OF RS.4.21 LAKHS FURNISHED ALONG WITH THE RETURN OF INCOME; (II) SHORTFALL IN GRANT OF INTEREST U/S 244A BY RS.17.30 LAKHS ON TAX REFUND AMOUNT GRANTED IN INTIMATION U/S 143(1) OF THE ACT - THE CIT (A) HAD ERRED IN NOT DIRECTING THE AO TO GRANT CREDIT FOR TDS OF RS.4.21 LAKHS AND INTEREST AGGREGATING TO RS.17.30 LAKHS ON TAX REFUND AMOUNT IN ACCORDANCE WITH THE PROVISIONS OF S.244A OF THE ACT. 5.1. TO SUBSTANTIATE HIS ARGUMENT, SRI SARANGAN, TH E LD. SR. COUNSEL, HAD FURNISHED A PAPER BOOK CONTAINING 1 78 PAGES WHICH CONSIST OF, AMONG OTHERS, COPIES OF (I) TDS CERTIFICATE OF VIBR ATIONS EFX PVT. LTD. (II) CORRESPONDENCE WITH LOWER AUTHORITIES; (III) APPLIC ATION U/S 154 OF THE ACT ADDRESSED TO THE AO ETC., 5.2. SMT. JACINTA ZIMIK VASHAI, THE LD. D R HAD SUP PORTED THE STAND OF THE LOWER AUTHORITIES AND FERVENTLY PLEADED THAT TH E IMPUGNED ORDER OF THE LD. CIT (A) BE SUSTAINED. 6. WE HAVE CAUTIOUSLY EXAMINED THE SUBMISSIONS OF R IVAL PARTIES, DILIGENTLY PERUSED THE RELEVANT CASE RECORDS AS WEL L AS THE DOCUMENTARY EVIDENCES ADVANCED DURING THE COURSE OF HEARING BY THE LD. SR. COUNSEL FOR THE ASSESSEE IN THE SHAPE OF A PAPER BOOK. ITA NO.1080/BANG/10 PAGE 5 OF 8 6.1. ON A GLIMPSE OF THE IMPUGNED ORDER OF THE LD. CIT (A), IT WAS NOTICED THAT THE LD. CIT (A) HAD COME TO A CONCLUSI ON THAT THE APPEAL PREFERRED BY THE ASSESSEE CANNOT BE TAKEN UP FOR A DJUDICATION AS, ACCORDING TO THE LD. CIT (A), IT WAS BELATED BY 86 DAYS AND THERE WAS NO REPRESENTATION SEEKING FOR CONDONATION ETC., HOWEVE R, AS COULD BE SEEN FROM INTIMATION U/S 143(1) OF THE ACT ACCOMPANIED B Y A REFUND ORDER NO.157870 FOR RS.2.12 CRORES [SOURCE: P 23 OF FOR M NO.36] AND, THUS, ONE COULD SAFELY ASSUME THAT THE INTIMATION OUGHT TO H AVE BEEN RECEIVED BY THE ASSESSEE ONLY AFTER 14.2.2008. THOUGH, THE LD. CIT (A) HAD ATTRIBUTED THAT THERE WAS A DELAY OF 86 DAYS, BUT, HE HAD NOT REASONED FOR SUCH A CONCLUSION EXPLICITLY. IT IS PERTINENT TO MENTION THAT THE ASSESSEE HAD VOUCHED IN ITS GROUNDS OF APPEAL BEFORE THIS BENCH [REFER: P 4 OF FORM NO.36] THAT THE INTIMATION U/S 143(1) OF THE ACT WA S ON IT ON 14.2.2008. IN NORMAL COURSE, AN ASSESSEE FURNISHES FORM NO.35 ,I N DUPLICATE, A COPY OF WHICH ALONG WITH ITS ENCLOSURES WILL BE SENT TO THE AOS CONCERNED TO GET A FEED BACK SUCH AS THE DATE OF SERVICE OF ASSESSMENT ORDER,DEMAND NOTICE ETC., TO ENSURE AS TO WHETHER THE APPEAL IS IN TI ME ETC., IN THIS CASE, THIS PROCEDURE HAS NOT, PERHAPS, BEEN FOLLOWED UNAMBIGUO USLY. WITHOUT LOOKING INTO THESE ASPECTS, THE LD. CIT (A) HAD JU MPED INTO A HASTE CONCLUSION THAT THE APPEAL PREFERRED BY THE ASSESSE E WAS A BELATED ONE AND THERE WAS NO APPLICATION FOR CONDONATION ETC., 6.2. FURTHER, THE LD. CIT (A), TAKING REFUGE FROM VARIOUS JUDICIAL VIEWS REFERRED SUPRA, TOOK A STAND THAT THE APPEAL WAS O NLY AGAINST QUANTIFICATION OF INTEREST WITHOUT ANY FURTHER GROUND AGAINST THE ASSESSMENT AND, ITA NO.1080/BANG/10 PAGE 6 OF 8 THEREFORE, NOT MAINTAINABLE WHEREAS THE ASSESSEE, IN ITS GROUNDS OF APPEAL BEFORE THE LD. CIT (A) [SOURCE : P 15 OF FORM NO.35], HAD RAISED A SPECIFIC GROUND, APART FROM QUANTIFICATION OF INTEREST ETC., THAT 3. AT THE TIME OF COMPLETION OF ASSESSMENT, CREDIT FOR TDS WAS ALLOWED AT AN AMOUNT OF RS.1,94,9,079/- (AS ABOVE S AID) AS AGAINST THE CORRECT AMOUNT OF RS.1,99,11,424/- CLAIMED IN T HE RETURN OF INCOME THEREBY LEADING TO SHORT GRANT OF TAX REFUND BY RS.4,21,345/-. 4. THE SAID SHORT GRANT FOR TDS OF RS.4,21,345/- RE PRESENTS THE AMOUNT OF TAX DEDUCTED BY M/S.VIBRATIONS EFX PRIVAT E LTD. ON THE AMOUNT OF RENT OF RS.19,80,000/- PAID BY THEM TO TH E APPELLANT. 5. THE AMOUNT OF RENTAL INCOME OF RS.19,80,000/- O N WHICH THE SAID TAX OF RS.4,21,345/- DEDUCTED WAS INCLUDED IN THE O PERATING INCOME OF RS.8,12,77,710/- AS PER THE PROFIT & LOSS ACCOUNT F OR THE FINANCIAL YEAR ENDED MARCH, 31, 2005 AND WAS, THUS, OFFERED F OR TAX BY THE APPELLANT FOR THE AY UNDER CONSIDERATION AND WAS AC CEPTED AS IN THE ASSESSMENT COMPLETED U/S 143(1) VIDE INTIMATION DAT ED NOVEMBER, 19,2007 6.3. THUS, THE ASSESSEE, IN OUR CONSIDERED VIEW, WAS WITHIN ITS REALM TO RAISE SUCH A GROUND WHICH LOST SIGHT OF THE LD. CIT (A), PERHAPS, BY OVERSIGHT. THIS LAPSE ON THE PART OF THE LD. CIT ( A) DROVE HIM TO A CONCLUSION THAT THE ASSESSEES APPEAL WAS NOT MAINT AINABLE. 6.4. FURTHER, A NOTICE FIXING THE APPEAL FOR HEAR ING ON 10.8.2010 AT 11.45 A.M, ACCORDING TO THE ASSESSEE, WAS SERVED ON THE ASSESSEE ONLY AT 4.00 P.M. ON 10.8.2010 I.E., AFTER THE SCHEDULED TI ME OF HEARING. WHEN THIS WAS BROUGHT TO THE REFERENCE OF THE LD. CIT (A) VID E ASSESSEES LETTER NO.GMR.SJ/10-11/174 DATED: 11.8.2010 - WHICH WAS DU LY ACKNOWLEDGED BY THE CIT(A)S OFFICE ON 11.8.2010 WITH A PLEADI NG TO RESCHEDULE THE HEARING TO ANY FUTURE DATE [REFER: P 19 OF PB AR]. WITHOUT ACCEDING TO THE ASSESSEES REQUEST, THE LD. CIT (A), IN HIS IMPUGNE D ORDER DT: 10.8.2010, ITA NO.1080/BANG/10 PAGE 7 OF 8 DISMISSED THE ASSESSEES APPEAL WITH A RIDER THAT THE APPELLANT IS FREE TO MOVE TO AO U/S 154 OF THE I.T. ACT AS PER LAW FOR R EDRESSAL OF ITS GRIEVANCE. 6.5. TAKING INTO ACCOUNT ABOVE ASPECTS INTO CONSID ERATION, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT (A) WAS NOT JUSTIF IED, IN THE INTERESTS OF NATURAL JUSTICE AND EQUITY, IN DISMISSING THE APPEA L WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD,. 6.6. DURING THE COURSE OF HEARING, OUR ATTENTION WA S DRAWN TO THE FACT THAT THE ASSESSEE, IN ITS PRUDENCE, HAD SIMULTANEOUSLY APPROACHED THE LD. AO WITH ITS APPLICATION U/S 154 OF THE ACT DATED: 14.3 .2010 [SOURCE: PAGES 20 77 OF PB AR] WITH REGARD TO (I) SHORT GRANT OF CR EDIT FOR TDS; (II) INTEREST U/S 244A OF THE ACT WHICH, ACCORDING TO THE ASSESSEE, I S YET TO BE DISPOSED OFF BY THE AO. 6.7. TAKING INTO THESE ASPECTS INTO CONSIDERATION AND ALSO IN VIEW OF NATURAL JUSTICE AND EQUITY, THE CASE IS REMITTED BA CK TO THE FILE OF THE AO WITH A SPECIFIC DIRECTION TO LOOK INTO THE GRIEVANC ES OF THE ASSESSEE AS LISTED OUT IN ITS APPLICATION U/S 154 OF THE ACT AND TO TA KE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AFTER AFF ORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1080/BANG/10 PAGE 8 OF 8 PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF MAY, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH MAY, 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.