Transweave Solutions Pvt Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1291/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96332 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: S SEETHARAMAN
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1291/MDS/2015 ' $ %$ / ASSESSMENT YEAR : 2008-09 TRANSWEAVE SOLUTIONS PVT. LTD C/O. C.S. HARIHARAN & COMPANY CHARTERED ACCOUNTANTS, NO.249, 2 ND FLOOR, ROYAPETTAH HIGH ROAD, ROYAPETTAH, CHENNAI 600 014. VS. THE ACIT, COMPANY CIRCLE III(2), CHENNAI 600 034. [PAN AACCT 6367L ] ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. S. SEETHARAMAN, CA. *+&' ( ) /RESPONDENT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. ( , / DATE OF HEARING : 28-10-2015 -.% ( , / DATE OF PRONOUNCEMENT : 06-11-2015 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNA I DATED 20.03.2015 IN ITA NO.408/CIT(A)-11/2013-14 FOR THE ASSESSMENT YEAR ITA NO.1291/MDS/2015 :- 2 -: 2008-2009 PASSED UNDER SECTIONS 143(3) AND 250 OF T HE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PRIVATE LIMITED COMPANY HAVING OFFICES IN INDIA, USA AND CA NADA OFFERING COMPLETE END TO END TRAINING AND CERTIFICATION IN S AP IS (INDUSTRY SOLUTION) WITH SAP INDIA EDUCATION. THE ASSESSEE F ILED RETURN OF INCOME ON 27.09.2008 DISCLOSING LOSS OF (-)<16,01,8 37/-. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICES U/S.143(2) AND 115 WE(2) OF THE ACT DATED 25.08.2009 FOLLOWED BY NOTIC E U/S.142(1) CALLING FOR FURNISHING OF VARIOUS DETAILS. IN RESP ONSES TO ABOVE NOTICES, THE LD. AUTHORISED REPRESENTATIVE APPEARED FROM TIM E TO TIME AND FURNISHED THE DETAILS AND EXPLAINED THAT TRAINING P ROGRAMME IS CONDUCTED FOR THE STUDENTS AND FEES IS COLLECTE D DEPENDING UPON THE MODULE OF THE COURSE. THE LD. ASSESSING OFFIC ER CONSIDERED THE INFORMATION AND VERIFIED THE DOCUMENTS AND COMPLETE D THE ASSESSMENT U/S.143(3) OF THE ACT DATED 27.12.2010 BY MAKING DI SALLOWANCE U/S.43(B) FOR NON PAYMENT OF P.F CONTRIBUTION TO TH E GOVERNMENT <1,03,473/- AND ALSO DISALLOWANCE OF SERVICE TAX COLLECTED FROM THE STUDENTS BUT NOT REMITTED TO THE GOVERNMENT ACCOUNT U/S.43B(A) OF THE ACT AND FURTHER DISALLOWED <10,04,921/- PERTAIN ING TO THE SALARIES PAID TO STUDENTS CUM EMPLOYEES WHO HAVE WORKED TO GAIN EXPERIENCE WITH THE COMPANY AND CAPITALIZATION OF PARTNER EDGE PROGRAMME FEES ITA NO.1291/MDS/2015 :- 3 -: <3,79,050/- AND ASSESSED TOTAL INCOME AT <4,21,428 /- AND RAISED THE DEMAND. 3. THE ASSESSEE PREFERRED AN APPEAL AGAINST ORDER 143( 3) OF THE ACT WITH COMMISSIONER OF INCOME TAX (APPEALS) O N 31.01.2011 RAISING VARIOUS GROUNDS IN RESPECT OF ADDITIONS BY THE ASSESSING OFFICER. MEANWHILE THE CASE WAS TRANSFERRED FROM THE COMMISS IONER OF INCOME TAX (APPEALS)-I (ERSTWHILE CIT(A)-III), CHENNAI AS PER THE NOTIFICATION OF THE CCIT, CHENNAI-I, IN CHE/COORD/112(JURSDN)/20 12-13 DATED 23.04.2013 AND 26.04.2013 AND NOTIFICATION OF PRINC IPAL CCIT, TAMILNADU IN CHE/COORD/112(2) (JURSDN)/2014-15, DAT ED 15.11.2014. THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) PASSED ORDER ON 20.03.2015 WITH OBSERVATION THAT THE CASE WAS POSTED ON VARIOUS DATES. NOBODY HAS APPEARED AND THE ASSESSEE HAS NEITHER SOUGHT AN ADJOURNMENT OR FILED ANY EXPLANATION NOR SUBMITTED ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CASE. CON SIDERING THE INFORMATION FROM THE RECORDS OF THE ASSESSING OFFIC ER, THE APPEAL WAS DISMISSED AND SUSTAINED THE ADDITIONS MADE BY THE A SSESSING OFFICER RELYING ON THE DECISIONS INCLUDING CO-ORDINATE BENC H DECISION IN THE CASE OF M/S. HELIOS AND MATHESON INFORMATION TECHNOLOGY LTD VS. ITO IN ITA NO.134/MDS/2011 DATED 05.07.2011 AND THE RATIO LAID DOWN IN OF CIT VS. MULTIPLAN (INDIA) PRIVATE LTD 38 ITD 320 ( DEL) AND FURTHER RELIED ON THE DECISION OF APEX COURT IN THE CASE OF CIT VS. B.N. ITA NO.1291/MDS/2015 :- 4 -: BHATTACHARJEE AND ANOTHER 10 CTR 354 WERE IT WAS O BSERVED THAT THE APPEAL MEANS AN EFFECTIVE APPEAL AND ALSO EXPR ESSION PREFER AN APPEAL WOULD MEAN EFFECTIVELY PROSECUTING AN APPE AL AND ADJUDICATED THE APPEAL EX-PARTE. 4. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE ASSESSEE FILED AN APPEAL ALLEGING TH AT THE COMPANY HAS NOT RECEIVED NOTICE OF POSTING NOR ANY COMMUNICATIO N ON VARIOUS DATES FROM INCOME TAX DEPARTMENT. THE LD.AR SUBMITTED THA T THE APPEAL WAS HEARD AFTER A PERIOD OF FOUR YEARS FROM THE DAT E OF FILING ON 31.01.2011 AND PLEADED FOR ALLOWING OF APPEAL. ON THE OTHER HAND, THE LD.DR SUBMITTED THAT THE ASSESSEE WAS NOT SERI OUS IN PERUSING THE CASE INSPITE OF GIVING ADEQUATE OPPORTUNITY OF HEARING ON VARIOUS DATES AND LD.CIT(A) WAS JUSTIFIED IN DISMISSING THE APPEAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND ORDERS OF THE LOWER AUTHORITIES AND PERUSED THE MAT ERIAL ON RECORD. WITHOUT GOING INTO MERITS OF THE ADDITIONS MADE BY THE ASSESSING OFFICER AND THE CONTENTIONS RAISED IN THE GROUNDS O F APPEAL, WE ARE OF THE OPINION THAT THE LD. CIT(A) BEING THE FIRST APP ELLATE AUTHORITY, EMPOWERED TO ENHANCE THE ASSESSMENT, HAS TO RE-APPR ECIATE THE MATERIAL ON RECORD AND PASS A SPEAKING ORDER. IT I S PERTAINED TO MENTION THAT THE CASE WAS TRANSFERRED FROM COMMISSI ONER OF INCOME TAX (A)-I TO COMMISSIONER OF INCOME TAX (A)-11 AND THERE WAS NO ITA NO.1291/MDS/2015 :- 5 -: COMMUNICATION TO THE ASSESSEE ON THIS ISSUE. FURTH ER THE APPEAL WAS FILED ON 31.01.2011 WHEREAS THE EXPARTE ORDER WAS P ASSED ON 20.03.2015 AFTER A PERIOD OF FOUR YEARS. THE LD.CI T(A) MERELY BECAUSE THE ASSESSEE FAILED TO APPEAR IN HEARING PROCEEDING S CANNOT CONFIRM THE ASSESSING OFFICER ORDER. IN THE ABOVE FACTS, W E SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND THE ENT IRE DISPUTED ISSUE IS REMITTED BACK TO THE FILE OF THE CIT(A). THE LD. CIT(A) SHALL PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASS A SPEAKING ORDER BY ADJUDICATING THE CASE ON MERITS . IF THE ASSESSEE FAILS TO AVAIL THE OPPORTUNITY GIVEN BY THE COMMISS IONER OF INCOME TAX (APPEALS) TO PRESENT ITS CASE BEFORE HIM, THE COMMI SSIONER OF INCOME TAX (APPEALS) IS AT LIBERTY TO DECIDE THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.1291/MDS/2015 IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED ON FRIDAY, THE 6TH DAY OF NO VEMBER, 2015, AT CHENNAI . SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI / / DATED: 06.11.2015 KV COPY TO: 1. &' / APPELLANT 2. *+&' / RESPONDENT 3. 1, () / CIT(A) 4. 1, / CIT 5. 456 *',' / DR 6. 67$ 8 / GF ITA NO.1291/MDS/2015 :- 6 -: