M/s. Infineon Technologies India Pvt Ltd, Bangalore V. CIT (AAppeals)-IV, Bangalore

ITA 12/BANG/2011

• Counselvise Citation: 1221114 RSA 2011
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CIT IDR
• Assessee Lawyers: ANANTHA PADMANABHAN
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal; Condonation of delay
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 12/BANG/2011 ASSESSMENT YEAR : 2009-10 M/S. INFINEON TECHNOLOGIES INDIA PRIVATE LTD., 3 RD FLOOR, PHASE I, KALYANI PLATINA, SURVEY NO.6 & 24, KUNDALAHALLI VILLAGE, K.R. PURAM HOBLI, BANGALORE 560 066. PAN : AABCS6967N VS. THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), CIRCLE 1(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI ANANTHA PADMANABHAN, C.A. RESPONDENT BY : SHRI G.V. GOPALA RAO, CIT-I(DR) DATE OF HEARING : 12.10.2011 DATE OF PRONOUNCEMENT : 12.10.2011 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 13.10.2010 OF THE CIT(APPEALS) IV, BANGALORE FOR THE ASSESSM ENT YEAR 2009-10. ITA NO.12/BANG/2011 PAGE 2 OF 5 2. THE GROUNDS OF APPEAL NOS. 7 & 8 ARE GENERAL IN NATURE AND DO NOT REQUIRE ADJUDICATION. THE OTHER GROUNDS THAT HAVE BEEN RAISED IN THIS APPEAL READ AS UNDER: 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) (HEREINAFTER REFERRED TO AS CIT(A)) ERRED IN DISM ISSING THE APPEAL OF THE APPELLANT ON THE GROUND THAT THE APPE AL WAS NOT MAINTAINABLE AS THE DELAY IN FILING THE APPEAL COUL D NOT BE CONDONED. 2. THE LEARNED CIT(A) ERRED IN NOT GRANTING CONDONA TION FOR DELAY OF 5 DAYS IN FILING THE APPEAL BY THE APPELLA NT. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT THE MANAGING DIR ECTOR OF THE APPELLANT WAS TRAVELING FROM 7 TH MARCH, 2010 TO 20 TH MARCH, 2010 AND ACCORDINGLY, THE APPEAL COULD NOT BE SIGNED WIT HIN THE PRESCRIBED TIME FOR FILING THE APPEAL. 3. THE LEARNED CIT(A) ERRED IN STATING THAT THE APP EAL COULD HAVE BEEN FILED WITHIN THE STIPULATED PERIOD OF 30 DAYS HAD THE APPELLANT OBTAINED THE SIGNATURE OF THE MANAGING DI RECTOR WHEN HE WAS AVAILABLE OR THE SIGNATURE OF THE OTHER DIRE CTOR WITHIN THE STIPULATED PERIOD. THE LEARNED CIT(A) OUGHT TO HAV E OBSERVED THAT THE MANAGING DIRECTOR WAS EXPECTED TO COME BAC K TO INDIA WITHIN THE PRESCRIBED TIME FOR FILING THE APPEAL. 4. THE LEARNED CIT(A) ERRED IN NOT OBSERVING THAT T HE MANAGING DIRECTOR OF THE APPELLANT IS THE ONLY DIRE CTOR BASED IN INDIA AND THE OTHER DIRECTORS OF THE COMPANY ARE BA SED IN SINGAPORE OR GERMANY. 5. THE LEARNED CIT(A) ERRED IN NOT OBSERVING THAT S INCE THE MANAGING DIRECTOR OF THE APPELLANT DID NOT COME BAC K TO INDIA WITHIN THE PRESCRIBED TIME FOR FILING THE APPEAL, T HE APPEAL PAPERS WERE SENT TO THE NON-RESIDENT DIRECTOR FOR SIGNATUR ES. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT THE SIGNATORY TO THE APPEAL ANDREW CHONG YANG HSUEH IS A NON-RESIDENT DIRECTOR AND IS BASED IN SINGAPORE. 6. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT T HE RIGHT OF APPEAL IS A VALUABLE RIGHT AVAILABLE TO THE APPE LLANT UNDER THE PRINCIPLES OF NATURAL JUSTICE AND IT CANNOT BE DENI ED MERELY ON TECHNICAL REASONS. ITA NO.12/BANG/2011 PAGE 3 OF 5 3. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL REL ATES TO THE ACTION OF THE LD. CIT(A) IN DISMISSING THE APPEAL BY NOT GRAN TING CONDONATION OF DELAY OF 5 DAYS IN FILING THE APPEAL BEFORE HIM. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS A COMPANY. THE ASSESSING OFFICER IN THE ASSESSEES CASE HELD T HAT CERTAIN PAYMENTS MADE FOR SOFTWARE AND SERVICES WERE LIABLE FOR DEDU CTION TO TAX AT SOURCE U/S. 195(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTE R REFERRED TO AS THE ACT IN SHORT]. THE AO CONSIDERED THE ASSESSEE AS TAX PAYER IN DEFAULT AND LEVIED INTEREST U/S. 201(1) FOR NOT DEDUCTING TAX A T SOURCE U/S. 195(1) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(APPEALS) WHO OBSERVED THAT THE APPEAL WAS FILED WITH A DELAY OF 5 DAYS. THE ASSESSEE REQUESTED FOR CONDONATION OF DE LAY BY STATING THAT THE MANAGING DIRECTOR OF THE ASSESSEE WAS TRAVELLING AN D HIS SIGNATURE ON THE SCANNED COPY OF THE SIGNED FORM 35 COULD ONLY BE OB TAINED. IT WAS STATED THAT THE LAST DATE FOR FILING THE APPEAL WAS 12.3.1 0 AND THE ISSUE WAS EXPLAINED TO THE LD. CIT(A) ON 11.3.10, BUT THE APP EAL COULD BE FILED ONLY ON 17.3.10. THE LD. CIT(A) DID FIND MERIT IN THE SUBM ISSIONS OF THE ASSESSEE AND WAS OF THE VIEW THAT THE ASSESSEE COMPANY COULD HAVE TAKEN PAINS TO OBTAIN THE SIGNATURE OF THE OTHER DIRECTOR WITHIN 3 0 DAYS AS HAD BEEN DONE BY THEM ULTIMATELY AFTER THE STIPULATED PERIOD OF 3 0 DAYS. THE LD. CIT(A) ACCORDINGLY HELD THAT THE APPEAL BEFORE HIM WAS NOT MAINTAINABLE AS THE DELAY IN FILING THE APPEAL COULD NOT BE CONDONED. NOW THE ASSESSEE IS IN APPEAL. ITA NO.12/BANG/2011 PAGE 4 OF 5 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND THE MATERIAL ON RECORD. IN THE PRESENT CASE, IT IS NOT ICED THAT THERE WAS A DELAY OF 5 DAYS IN FILING THE APPEAL BEFORE THE CIT(A). THE REASON FOR THE SAID DELAY WAS EXPLAINED BY THE ASSESSEE EVEN BEFORE THE LAST DATE OF FILING OF APPEAL WHICH IN THIS CASE WAS 12.3.10 AND THE ASSES SEE APPEARED BEFORE THE LD. CIT(A) ON 11.3.10 TO EXPLAIN THE POSITION T HAT THE M.D., WHO WAS AUTHORIZED TO SIGN FORM NO. 35 WAS AWAY AND NOT AVA ILABLE. IN THE INSTANT CASE IF THERE WAS FAULT OF THE ASSESSEE, THAT WAS O NLY A TECHNICAL BREACH, BUT WITHOUT ANY MALAFIDE INTENTION. IN OUR OPINION , THE EXPLANATION GIVEN BY THE ASSESSEE WAS A PLAUSIBLE EXPLANATION, THEREFORE THE LD. CIT(A) OUGHT TO HAVE CONDONED THE DELAY OF 5 DAYS IN FILING THE APP EAL BEFORE HIM AND THEREAFTER THE ISSUE SHOULD HAVE BEEN ADJUDICATED O N MERITS. AS REGARDS THE DELAY OF FEW DAYS, THE HONBLE SUPREME COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL V. SHANTARAM BAB URAO PATIL & ORS. 253 ITR 798 HAS HELD AS UNDER: IN EXERCISING DISCRETION UNDER SECTION 5 OF LIMIT ATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT PREFERRING AN APPEAL OR OTHER APPLICATION WITHIN THE PERIOD PRESC RIBED, COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MU ST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF FEW DAYS. WHEREAS IN THE FORMER CO NSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACT OR AND CALLS FOR A MORE CAUTIOUS APPROACH, IN THE LATTER CASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROA CH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE ITS DISCRETION ON THE FACTS OF EACH CASE K EEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORT ANCE. THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBE RAL CONSTRUCTION. ITA NO.12/BANG/2011 PAGE 5 OF 5 7. IN OUR OPINION, THE RATIO LAID DOWN BY THE HONB LE SUPREME COURT IN THE ABOVE REFERRED TO CASE IS SQUARELY APPLICABLE T O THE FACTS OF THE PRESENT CASE. WE THEREFORE DIRECT THE LD. CIT(APPEALS) TO CONDONE THE DELAY OF FEW DAYS I.E., 5 DAYS AND DECIDE THE APPEAL OF THE ASSE SSEE ON MERITS IN ACCORDANCE WITH THE LAW AFTER PROVIDING DUE AND REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF OCTOBER, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH OCTOBER, 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.