M/s Fairy Food Products P Ltd, Bangalore V. Deputy Commissioner of Income tax, Bangalore

ITA 1131/BANG/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5656 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 03-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR ACIT
• Assessee Lawyers: K CHAN DRASEKHAR
• Keywords: Rectification of order; Opportunity of being heard; Bonafide belief
• Section: 40A(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NOS.1130 & 1131/BANG/2014 ASSESSMENT YEAR : 2008-09 M/S. FAIRY FOOD PRODUCTS (P) LTD., N O.47, EUREKA CHURCH STREET, BENGALURU-560001. PAN : AAACF3596M VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. K. CHANDRASEKHAR, ADVOCATE REVENUE BY : DR. P. V. PRADEEP KUMAR, ACIT DATE OF HEARING : 10.01.2018 DATE OF PRONOUNCEMENT : 19.01.2018 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINS T THE RESPECTIVE ORDER OF THE CIT(A), INTER ALIA, ON FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED IN HOLDING CONSIDERATION O F APPLICATION FILED U/S.154 OF THE ACT FOR SEEKING RECTIFICATION OF ORDER DATED 17-07-2013 AMOUNTS TO REVIEW OF THE APPELLATE ORDER AND THEREBY REJECT THE APPLICATION MADE U/S. 154 OF THE ACT. 2. APPELLANT SUBMITS THAT ITS APPLICATION U/S. 154 IS WARRANTED AS THERE IS A MISTAKE APPARENT ON RECORD AND WHICH REQUIRES THE MODIFICATION OF ORDER OF THE LEARNED CIT(A) OF THE ACT. 3. THE LEARNED CIT(A) ERRED IN REJECTING THE APPLICATI ON OF THE APPELLANT DATED 06-08-2013 MADE U/S.L54 OF THE ACT. 4. APPELLANT SUBMITS ON MERITS THAT RESTRICTION OF DIS ALLOWANCE OF RS.7,00,500/- BY APPLYING THE PROVISIONS OF SECTIONS 40(A)(IA) OF TH E ACT IS ERRONEOUS AS APPELLANT AS COMPLIED WITH THE PROVISIONS OF SECTION 40(A)(IA) O F THE ACT BY DEDUCTING THE TAX AT SOURCE AND BY DEPOSITING THE SAME WITH THE GOVERNME NT. 5. APPELLANT SUBMITS THAT RESTRICTION OF DISALLOWANCE BY THE LEARNED CIT(A) IN RESPECT OF PURCHASES MADE U/S.40A(3) OF THE ACT IS WHOLLY ON M ISCONCEPTION THAT PAYMENTS ARE HIT BY ITA NOS.1130 AND 1131/BANG/2014 PAGE 2 OF 3 PROVISIONS OF SECTION 40A(3) OF THE ACT AND THERE I S NO VIOLATION OF PROVISIONS OF SECTION 40A(3) OF T HE ACT. 6. THE LEARNED CIT(A) DID NOT APPRECIATE PROPERLY THE CONTENTION OF THE APPELLANT WITH REFERENCE TO DISALLOWANCE OF INTEREST AMOUNTING TO RS.41,28,000/ - AND ERRED IN UPHOLDING INTEREST. 2. DURING THE COURSE OF HEARING, OUR ATTENTION WA S INVITED THAT THE APPEAL NO. 1131/BANG/2014 FILED AGAINST THE MAIN ORDER OF THE CIT(A) IS BARRED BY TIME. THE DELAY IN FILING OF APPEAL IS BY 337 DAYS. THE REASONS FO R THE DELAY WAS EXPLAINED THROUGH ITS APPLICATION STATING THEREIN THAT AFTER THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED THE RECTIFICATION APPLICATION UNDER SECTION 154 OF THE ACT AND SINCE THE RECTIFICATION APPLICATION WAS PENDING BEFORE THE CIT(A), THE PRESENT APPEAL W AS NOT FILED UNDER THE BELIEF THAT ASSESSEE MAY GET A RELIEF UNDER SECTION 154 OF THE ACT. WHEN THE APPLICATION UNDER SECTION 154 WAS DISMISSED BY CIT(A), ASSESSEE FILED THE PRESENT APPEAL IMMEDIATELY. WHATEVER RELIEF IS SOUGHT IN THIS APPEAL, IT WAS SO UGHT UNDER RECTIFICATION APPLICATION. THEREFORE, IT IS BONAFIDE DELAY IN FILING OF THE AP PEAL. THE LEARNED DR HOWEVER OPPOSED THE CONTENTIONS OF T HE ASSESSEE. 3. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DOCUMENTS AVAILABLE ON RECORD, WE FIND THAT ASSESSEE HAS RAIS ED THE SIMILAR GROUNDS IN THE RECTIFICATION APPLICATION AS ARE RAISED IN THIS APPEAL. UNDER TH ESE CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT ASSESSEE WAS HAVING A BONAFIDE BELIEF THAT HE WOULD GET A RELIEF UNDER SECTION 154 OF THE ACT AND FOR THAT REASON HE DID NOT FILE THE APPEAL. FINDING FORCE IN THE CONTENTIONS OF THE ASSESSEE, WE CONDONE THE DELAY A ND ADMIT THE APPEAL FOR HEARING. SINCE THE CIT(A) HAS NOT ADJUDICATED THE ISSUES RAI SED BEFORE HIM IN THE LIGHT OF ASSESSEES CONTENTIONS, WE FIND IT PROPER TO RESTORE THE MATTE R TO HIS FILE FOR ITS ADJUDICATION FOR PASSING A REASONED ORDER. WE ACCORDINGLY SET ASIDE THE ORD ER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR ADJUDICATION OF THE IMPUGNED ISSUES RAISED IN THIS APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. SINCE WE HAVE SET ASIDE THE MATTER TO THE CIT(A) FOR ADJUDICATING AFRESH, THE APPEAL F ILED AGAINST THE ORDER OF THE CIT(A) PASSED UNDER SECTION 154 OF THE ACT BECOMES INFRUCTUOUS AN D WE DISMISS THE SAME. ITA NOS.1130 AND 1131/BANG/2014 PAGE 3 OF 3 4. IN THE RESULT, APPEALS OF THE ASSESSEE IN ITA NO .1131/BANG/2014 IS ALLOWED FOR STATISTICAL PURPOSE AND ITA NO.1130 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 19 TH JANUARY, 2018. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BANGALORE DATED : 19/01/2018 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.