Dishnet Wireless Limited, CHENNAI V. ITO Company Circle 1(4), CHENNAI

ITA 1276/CHNY/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2293 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 115JB; 147; 148; 263

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1276/CHNY/2019 / ASSESSMENT YEAR: 2004-05 M/S. DISHNET WIRELESS LTD., SPENCER PLAZA, 5 TH FLOOR, 769, ANNA SALAI, CHENNAI 600 002. [PAN:AAACD5767E] VS. THE INCOME TAX OFFICER, COMPANY CIRCLE I(4), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI ASHIK SHAH, C.A. / RESPONDENT BY : SHRI S. BHARATH, CIT / DATE OF HEARING : 20.01.2021 /DATE OF PRONOUNCEMENT : 19.02.2021 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 4, CHENNAI, DATED 31.01.2019 RELEVANT TO THE ASSESSMENT YEAR 2004-05. BESIDES RAISING VARIOUS GROUNDS, THE ASSESSEE MAINLY CHALLENGED THE EXPARTE ORDER PASSED BY THE LD. CIT(A) WITHOUT AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD AND WITHOUT ADDRESSING THE GROUNDS OF APPEAL ON MERITS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME 29.10.2004 FOR THE ASSESSMENT YEAR 2004-05 ADMITTING TOTAL I.T.A. NO. 1276/CHNY/19 2 INCOME OF .51,46,06,480/-. SUBSEQUENTLY, IN PURSUANCE TO THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 [ACT IN SHORT], AN ORDER UNDER SECTION 143(3) R.W.S. 263 OF THE ACT WAS PASSED BY RECOMPUTING THE ASSESSEES BOOK PROFITS UNDER SECTION 115JB OF THE ACT. SINCE THE ASSESSEE HAS MADE HUGE PAYMENTS TOWARDS INTERNATIONAL BANDWIDTH CHARGES TO M/S. SINGAPORE TELECOMMUNICATIONS LTD., SINGAPORE DURING THE RELEVANT PREVIOUS YEAR WITHOUT DEDUCTION OF TAX AT SOURCE WARRANTING DISALLOWANCE, THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. BY RELYING ON VARIOUS DECISIONS, IT WAS THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT FOR INTERNET BANDWIDTH WOULD NOT CONSTITUTE FEES FOR TECHNICAL SERVICES SO AS TO WARRANT DEDUCTION OF TAX AT SOURCE ON THESE PAYMENTS. HOWEVER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS CASE LAW, THE ASSESSING OFFICER DISALLOWED THE ABOVE EXPENDITURE AND BROUGHT TO TAX. ON APPEAL, AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE THAT THE HONBLE MADRAS HIGH COURT ISSUED MORATORIUM ON ALL IT PROCEEDINGS TILL THE DISPOSAL OF THE CORPORATE INSOLVENCY RESOLUTION PROCEEDINGS [CIRP], THE LD. CIT(A) DISMISSED THE APPEAL. I.T.A. NO. 1276/CHNY/19 3 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY REFERRING TO THE SPECIFIC GROUND RAISED IN THE GROUNDS OF APPEAL AT GROUND NO. 1.4, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS NOT PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD AND WITHOUT ADDRESSING THE GROUNDS OF APPEAL ON MERITS, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND PRAYED FOR SUITABLE DIRECTIONS BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. AGAINST VARIOUS ADDITIONS MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W. SECTION 147 OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). ON PERUSAL OF THE APPELLATE ORDER, WE FIND THAT DESPITE GIVING VARIOUS OPPORTUNITIES FROM 08.08.2011 TO 30.01.2019, THERE WAS NO PROPER RESPONSE FROM ASSESSEES SIDE AND BY CLUBBING THE APPEALS FOR OTHER ASSESSMENT YEARS, THE LD. CIT(A) DISMISSED ALL THE APPEALS WITHOUT ADJUDICATING THE ISSUES ON MERITS. SINCE THE LD. COUNSEL FOR THE ASSESSEE MADE A SUBMISSION THAT THE ASSESSEE WAS NOT PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD AND NOT ADDRESSED THE GROUNDS OF APPEAL ON MERITS, WE REMIT THE MATTER BACK I.T.A. NO. 1276/CHNY/19 4 TO THE FILE OF THE LD. CIT(A) TO ADJUDICATE THE ISSUES ON MERITS IN ACCORDANCE WITH LAW BY AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 19 TH FEBRUARY, 2021 IN CHENNAI. SD/- SD/- (G. MANJUNATHA) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 19.02.2021 VM/- /COPY TO: 1. /APPELLANT, 2. / RESPONDENT, 3. ( )/CIT(A), 4. /CIT, 5. /DR & 6. /GF.