Summit (India) Water Treatment & Services Ltd., Ahmedabad V. The Pr. CIT-4, Ahmedabad, Ahmedabad

ITA 1338/AHD/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0678 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 23-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Recovery proceedings; Transfer pricing; Opportunity of being heard; International transaction; Application of stay; Assessment record; TDS; Set aside
• Section: 92C; 143(3); 92E; 115JB; 40(a)(ia); 194C; 195; 201; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SUMMIT INDIA WATER TREATMENT & SERVICES LTD. 305, KALASH - II, NEAR JAIN T EMPLE, BEHIND NAVRANGPURA POST OFFICE, NAVRANGPURA, AHMEDABAD - 380009, GUJARAT, INDIA PAN: AAECS6689 L (APPELLANT) VS THE PRINCIPAL CIT, CIRCLE - 4 , AHMEDA BAD (RESPONDENT) ASSESSEE BY : S H RI DHINAL SHAH , A.R . REVENUE BY: SHRI O.P. SHARMA, CIT - D .R. DATE OF HEARING : 13 - 05 - 2 019 DATE OF PRONOUNCEMENT : 27 - 05 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE ASSESSEE HAS FILED THE APPEAL CHALLENGING THE ORDER U/S. 263 DATED 31 - 03 - 2018 OF THE ACT PASSED BY THE LD. PRINCIPAL CIT. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: - GROUND NO 1 - INITIATION OF REVISION PROCEEDINGS UNDER SECTION 263 OF THE ACT A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN HOLDING THAT THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER, AHMEDABAD ('LEARNED AO') IS ERRONEO US AS WELL AS PREJUDICIAL TO THE INTERESTS OF REVENUE. I T A NO . 1338 / A HD/20 18 A S S ESSMENT YEAR 2013 - 14 I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 2 B. THE LEARNED CIT HAS ERRED IN NOT APPRECIATING THE FACT THAT THE LEARNED AO HAS PASSED THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT AFTER APPLICATION OF MIND AND AFTER CONSIDERING THE SU BMISSIONS FILED BY THE APPELLANT AND ACCORDINGLY, THE ORDER PASSED BY THE LEARNED AO IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. C. THE LEARNED CIT HAS BASED ON IRRELEVANT CONSIDERATIONS, ERRED IN CONCLUDING THAT ASSESSMENT ORDER IS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. D. THE LEARNED CIT ERRED IN INITIATING PROCEEDINGS UNDER SECTION 263 OF THE ACT AND HENCE THE IMPUGNED ORDER IS BAD IN LAW AND VOID AB - INITIO. GROUND NO 2 - DISALLOWANCE OF EXPORT FREIGHT OF RS. 2,0 3,66,683 PAID TO THE INTER OCEAN SHIPPING AND LOGISTIC SERVICES WITHOUT PREJUDICE TO GROUND NO 1 - A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT ERRED IN DIRECTING THE ASSESSING OFFICER TO DISALLOW EXPORT FREIGHT PAID TO INTE R OCEAN SHIPPING AND LOGISTIC SERVICES OF RS. 2,03,66,683 ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE. B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN NOT CONSIDERING THE SUBMISSION OF THE APPELLANT THAT TAX WAS NOT REQUIRED TO BE WITHHELD IN VIEW OF THE CBDT CIRCULAR 723 DATED 19 SEPTEMBER 1995. GROUND NO 3 - DIRECTION IN RESPECT OF INVOKING PENAL PROVISIONS UNDER SECTION 271BA OF THE ACT WITHOUT PREJUDICE TO GROUND NO 1 A. ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN DIRECTING THE LEARNED ASSESSING OFFICER TO INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271BA OF THE ACT. B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN STATING TH AT APPELLANT HAS NOT COMPLIED WITH PROVISIONS OF FILING FORM 3CEB ELECTRONICALLY BY IGNORING THE FACT THAT IT WAS THE FIRST YEAR OF FILING THE FORM ELECTRONICALLY AND THE APPELLANT UNDER BONA FIDE BELIEF HAS FILED BY FORM PHYSICALLY QUITE BEFORE THE DUE DA TE. THE APPELLANT PRAYS THAT APPROPRIATE RELIEF BE GRANTED BASED ON THE SAID GROUNDS OF APPEAL AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ALL THE GROUNDS OF APPEAL ARE INTERCONNECTED TO THE COMMON ISSUE OF CHALLENGING THE REVISION PROCEEDINGS U/S. 2 63 OF THE, THEREFORE, FOR THE SAKE OF CONVENIENCE, THE SAME ARE BEING ADJUDICATED TOGETHER. 3 THE BRIEF FACT OF THE CASE IS THAT THE ASSESSEE HAS A FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2013 - 14 ON 30 - 11 - 2013 DECLARING TOTAL LOSS OF RS. 1 , 35 , 18 , 193/ - . THE ASSESSEE COMPANY HAS SHOWN BOOK PROFIT U/S. 115JB OF THE ACT AT RS. NIL. THEREAFTER, THE ASSESSING OFFICER HAS COMPLETED ASSESSMENT U/S. 143(3) OF THAT ON 22ND MARCH, 2016 AND ACCEPTED TOTAL LOSS OF RS. 1 , 35 , 18 , 193/ - DECLARED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. SUBSEQUENTLY , THE PRINCIPAL COMMISSIONER OF INCOME TAX ON VERIFICATION OF THE RECORD HAS NOTICED T H A T ASSESSEE COMPANY HAS PAID EXPORT FREIGHT I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 3 AMOU NTING TO R S. 2 , 03 , 66 , 683/ - TO INTER OCEAN SHIPPING AND LOGISTICS COMPANY WITHOUT DEDU CTION OF ANY TDS ON THE SAID PAYMENT. IT IS ALSO NOTI CED THAT AS PER RECORD NO TDS RETURN SHOWING DETAIL OF DEDUCTION OF ANY TAX IN RESPECT OF AFORESAID PAYMENT HAS BEEN FIL ED BY THE ASSESSEE . THEREFORE, THE PR. CIT WAS OF THE VIEW THAT SINCE THE ASSESSE E HAS FAIL ED TO DEDUCT TDS ON FREIGHT PAYMENT AT THE RATES SP E CI FI ED , THE ENTIRE AMOUNT WAS REQUIRED TO BE DISALLOWED U/S. 40(A)(IA) OF THE ACT . THE PR. CIT OF INCOME TAX ALSO NOTICED THAT DURING THE YEAR THE ASSESSE E HAD MADE EXPORT SALE OF RS. 13 , 66 , 87 , 344/ - TO M/S. SUMMIT RESEARCH LAP, USA WHICH WAS A RELATED ENTITY OF THE ASSESSEE COMPANY. IN THIS REGARD , THE PR. CIT HAS SEEN FROM THE RECORD THAT IN ASSESSMENT YEAR 2010 - 11 A REFERENCE WAS MADE TO THE TPO. HE HAS FURTHER NOTICED THAT IN ASSESSMENT YE AR 2013 - 14 ALSO , THERE WAS EXPORT SALE MADE BY THE ASSESSE E TO ITS RELATED PARTY. ON VERIFICATION THROUGH ITD SYSTEM, THE PR. CIT FOUND THAT THE ASSESSEE HAD NOT FILED 3C EB REPORT IN RESPECT OF THE INTERNATIONAL TRANSACTION ENTERED INTO BY IT DURING THE F INANCIAL YEAR 2012 - 13 RELATING TO ASSESSMENT YEAR 2013 - 14 ELECTRONICALLY . THE ASSESSEE HAD SUBMITTED FORM 3C EB ELECTRONICALLY FOR ASSESSMENT Y EAR 2014 - 15 BUT NO SUCH FORM 3C EB FOR THE YEAR UNDER CONSIDERATION WAS SUBMITTED ELECTRONICALLY AS PRESCRIBED IN THE IT RULES. THEREFORE , THE PR. CIT OBSERVED THAT FAILURE TO KEEP , MAINTAIN AND REPORT INTERNATIONAL TRANSACTION AS PRESCRIBED IN THE I.T. RULE ATTRACT S PENALTY OF AMOUNT EQUALLY TO 2% OF THE VALUE OF INTERNATIONAL TRANSACTION WHICH RESULTED INTO SHORT L EVY OF INCOME TAX T O RS. 22 , 90 , 358/ - . IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES, THE LD. PR. CIT OBSERVED THAT WHI L E PASSING THE ORDER U/S. 143(3) OF THE ACT , THE ASSESSING OFFICER HAS NOT TAKEN INTO CONSIDERATION THE ABOVE CITED DISCREPANCIES AND FAILE D TO MAKE PROPER I NQUIRY IN RESPECT OF ABOVE ISSUES. I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 4 THEREFORE, A NOTICE U/S. 263 OF THE ACT DATED 6 TH MARCH, 2018 WAS ISSUED TO THE ASSESSEE. THE RELEVANT PART OF THE SAID NOTICE IS REPRODUCED AS UNDER: - ' ASSESSMENT ORDER U/S.143(3) OF THE 1.7. ACT 196 1 DATED 23.03.2016 FOR A.Y.2013 - 14, WAS PASSED IN THE CASE OF THE ASSESSEE COMPANY, BY 170, WD. 4(1)(2), AHMEDABAD, ACCEPTING THE RETURNED INCOME WITHOUT ANY CHANGES. 2. ON SCRUTINY IT WAS SEEN THAT THE ASSESSEEE COMPANY HAD PAID EXPORT FREIGHT AMOUNTING T O RS.2,03,66,683/ - TO INTERN OCEAN SHIPPING AND LOGISTIC SERVICES. ON VERIFICATION OF THE LEDGER OF THE SAID PAYMENT IT WAS NOTICED THAT THE ASSESSEE HAS NOT DEDUCTED BY TDS ON THE SAID PAYMENT. SINCE THE ASSESSEE HAD FAILED TO DEDUCT. TDS ON FREI GHT PAYMENT AT THE RATES SPECIFIED, THE ENTIRE AMOUNT WAS REQUIRED TO BE DISALLOWED U/S.40(A)(IA) OF THE ACT, FAILURE TO DO SO RESULTED IN UNDERASSESSMENT OF INCOME OF RS.2 F 03,66,68 3/~ WITH CONSEQUENT SHORT LEVY OF TAX OF RS, 66,07,9707 - (1T+SC+EC). 3. THE SCRUTINY OF RECORDS REVEALED THAT ASSESSEE HAD EXPORT OF RS. 13,66,87,344/ - TO M/S. SUMMIT RESEARCH LABS USA WHICH WAS A RELATED ENTITY OF THE ASSESSEE COMPANY. IT WAS SEEN FROM THE ASSESSMENT RECORDS THAT A REFERENCE TO THE TPO WAS MADE IN RESPECT OF A.Y .2010 - 11, IN A.Y.2013 - 14, THE EXPORT - SALES HAD BEEN MADE TO THE SAME RELATED PARTY. ON VERIFICATION THROUGH ITD SYSTEM,' IT WAS FOUND THAT THE ASSESSEE HAD NOT FILED 3CEB REPORT IN RESPECT OF THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY IT DURING THE FIN ANCIAL YEAR 2012 - 13 RELATING TO A.Y.2013 - 14. FURTHER, THE ASSESSEE HAD SUBMITTED FORM 3 CEB ELECTRONICALLY FOR A.Y. 2014 - 15. SINCE, THERE WAS NO CHANGE IN THE SALES PATTERN OR THE RELATED PARTY TO WHOM SALES HAVE BEEN MADE AND THERE HAVE BEEN PREVIOUS INSTA NCES OF TRANSFER PRICING REFERENCES, THE ASSESSEE WAS REQUIRED TO BE REFERRED TO THE TPO FOR DETERMINATION OF ALP. FAILURE TO KEEP AND MAINTAIN AND REPORT INTERNATIONAL TRANSACTIONS ATTRACTS PENALTY OF AMOUNT EQUAL TO 2% OF THE VALUE OF INTERNATIONAL TRANS ACTIONS, THUS RESULTING INTO SHORT LEVY OF INCOME TAX OF RS.22,90,385/ - IN THE ASSESSEE'S CASE. 4. IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 23.03.2016 IS ERRONEOUS IS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. I, THEREFORE, PROPOSE TO PASS AN ORDER U/S.263 HOLDING IT TO BE SO. BEFORE I DO SO, I HEREBY GIVE YOU AN OPPORTUNITY TO STATE AS TO WHY THE ASSESSMENT ORDER PASSED BY THE ITO, WD.4(L)(2), AHMEDABAD FOR A.Y.2013 - 14 U/S. 143(3) DATE D 23.03,2016 IN THE CASE OF THE ASSESSEE COMPANY SHOULD NOT BE HELD TO BE ERRONEOUS IN SS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND BE SET ASIDE AND MODIFIED TO THE EXTENT MENTIONED IN PARA 2 AND 3 ABOVE. 5. YOU ARE HEREBY AN OPPORTUNITY OF BEING HEARD IN PERSON ALONG WITH DOCUMENTS AND EVIDENCE JUSTIFYING YOUR SUBMISSION. YOU MAY, IF YOU - SO DESIRE, SUBMIT YOUR CONTENTIONS IN WRITING OR THROUGH AN AUTHORIZED 'REPRESENTATIVE ALSO. THE HEARING FOR THIS PURPOSE IS FIXED ON 15.03.2018 AT 11.30 A .M.' IN RESPONSE TO NOTICE ISSUED U/S. 263, THE ASSESSEE HAS SUBMITTED ITS WRITTEN SUBMISSION. THE RELEVANT PART OF THE SUBMISSION IS REPRODUCED AS UNDER: - '3.1 EXPORT FREIGHT OF RS.2 F 03,66,683/ - PAID TO INTER OCEAN SHIPPING AND LOGISTIC SERVICES: 3.1.1. DURING A.Y. 2013 - 14, SUMMIT HAS PAID EXPORT FREIGHT OF RS. 203 66 683/ - TO INTER OCEAN SHIPPING AND LOGISTIC SERVICES ('INTER OCEAN). THIS FREIGHT WAS PAID BY SUMMIT TO INTER OCEAN SO AS TO BE ABLE TO EXPORT GOODS OUTSIDE INDIA. 3.1.2 ON THE SAID PAYMENTS TO INTER OCEAN, SUMMIT DID NOT DEDUCT IDS UNDER SECTION 194C OF 195 OF THE ACT CONSIDERING THIS, YOUR GOODSELF HAS PROPOSED TO DISALLOW THE ENTIRE AMOUNT OF RS.2.03 CRORES UNDER SECTION 40(A)(IA) OF THE ACT 3.1.3 IN THIS REGARD, WE WISH TO SUBMIT THAT INTE R OCEAN IS AN INDIAN AGENT ACTING ON BEHALF OF NON - RESIDENT SHIPPING COMPANY. THE SHIPPING COMPANY GENERALLY APPOINT AN AGENT TO ACT ON THEIR BEHALF FOR COLLECTING FREIGHT, DEMURRAGE AND OTHER CHARGES AND REIMBURSE THE SAME TO THE SHIPPING COMPANY. I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 5 3.1.4 THE PROVISIONS OF SECTION 194C OR 195 OF THE ACT ARE NOT APPLICABLE IN CASE OF A COMPANY COVERED UNDER SECTION 172 AS THE SECTION STARTS WITH NON - OBSTANTE CLAUSE. THE RELEVANT PORTION OF THE SECTION IS REPRODUCED AS UNDER: '172.(1). THE PROVISIONS OF THIS SECTION SHALL, NOT WITHSTANDING ANYTHING CONTAINED - IN THE OTHER PROVISIONS OF THIS ACT, APPLY FOR THE PURPOSE OF THE LEVY OF THE RECOVERY OF TAX IN THE CASE OF ANY SHIP, 'BELONGING TO OR CHARTERED BY A NON - RESIDENT, WHICH COM ES PASSENGERS, LIVESTOCK, MAIL OR GOODS SHIPPED AT A PORT IN INDIA'. 3.1.5 FURTHER, THE CBDT CIRCULAR WO.723 DOTED 19 SEPTEMBER 1995 ALSO CLARIFIES THAT WHERE PAYMENT IS MADE TO THE SHIPPING AGENTS OF NON - RESIDENT SHIP OWNER OR CHARTER, THE AGENT STEPS INT O THE, SHOES OF PRINCIPAL I.E. SHIPPING COMPANY, ACCORDINGLY, PROVISIONS OF SECTION 172 SHALL APPLY AND SECTION 194C OR 195 SHALL NOT BE APPLICABLE, RELEVANT EXTRACT OF THE CIRCULAR IS REPRODUCED BELOW FOR YOUR READY REFERENCE; '3. THE PROVISIONS OF SECTIO N 172 ARE TO APPLY, NOTWITHSTANDING ANYTHING CONTAINED IN OTHER PROVISIONS OF THE ACT, THEREFORE, ION SUCH CASES, THE PROVISIONS OF SECTION 194C AND 195 RELATING TO TAX DEDUCTION AT SOURCE ORE NOT APPLICABLE. THE RECOVERY OF TAX IS TO BE REGULATED, FOR A V OYAGE UNDERTAKEN FROM ANY PORT IN INDIA BY A SHIP UNDER THE PROVISIONS OF SECTION 172'. 4...... 5. THERE WOULD, HOWEVER, BE CASES WHERE PAYMENTS ARE MADE TO SHIPPING AGENTS OF NON - RESIDENT SHIP OWNERS OR CHARTERERS FOR CARRIAGE OF PASSENGERS ETC., SHIPPED AT A PORT IN INDIES. SINCE, THE AGENT ACTS ON BEHALF OF THE NON - RESIDENT SHIP OWNER OR CHARTERER, HE STEPS INTO THE SHOES OF THE PRINCIPAL. ACCORDINGLY, PROVISIONS OF SECTION 172 SHALL APPLY AND THOSE OF SECTIONS 194C AND. 195 WILL NOT APPLY', '3.2. NON FILING OF FORM 3CEBFOR THE A.Y, 2013 - 14 3.2.1 IN THIS REGARD, WE WISH TO SUBMIT THAT ASSESSEE HAS DULY FILED FORM 3CB ON 30 TH SEPTEMBER, 2013 TO THE JURISDICTIONAL AO WHICH IS BEFORE DUE OF DATE OF FILING'. THE LD. PR. CIT HAS NOT ACCEPTED T HE SUBMISSI ON OF THE ASSESSEE I N VIEW OF THE FOLLOWING REASONS REPRODUCED AS UNDER : - 5. I HAVE CONSIDERED THE MATTER AND THE SUBMISSIONS OF THE LD. A.P.. FOR THE ASSESSEE CAREFULLY BUT THE SAME ARE RIOT ACCEPTABLE IN VIEW OF THE FOLLOWING REASONS; - (I) THE ASSESSEE HAS ARGUED THAT THE NOTICE U/S 263 OF THE ACT, IS BAD IN L AW. THE ASSESSEE HAS CITED SEVERAL JUDICIAL PRONOUNCEMEN TS TO BUTTRESS ITS CLAIM. THE CASE LAWS CITED BY THE ASSESSEE HAVE BEEN CAREFULLY PERUSED BUT ARE NOT FOUND APPLICABLE IN THE INSTA NT CASE AS IN THE INSTANT CASE, THERE ARE NO ASSUMPTION OF FACTS WHERE TWO VIEWS ARE POSSIBLE BASED ON ANY SUCH ASSUMPTION, BUT THE ISSUES HERE ARE SOMETHING VERY APPARENT FROM RECORDS WHERE ONL Y A SINGLE VIEW CAN BE FORMED. MOREOVER, THERE WAS FAILURE ON THE PART OF THE A.O, AS MUCH AS NOT TO MAKE THE ENQUIRY AND VERIFICATION IN RESPECT OF THE ABOVE ISSUES. THEREFORE, THE SAID CASE LAWS ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE. RELIANCE IN THIS REGARD IS PLACED ON THE RECENT JUDGMENT OF DANIEL MERCHA NTS PVT LTD VS I TO DELIVERED BY THE HIGH COURT OF CALCUTTA [ GA NO. 599 OF 2016 ] WHEREIN THE PETITION OF THE ASSESSEE CHALLENGIN G THE JURISDICTION OF THE PR.CI T TO ISSUE NOTICE U/S 263 WAS CHALLENGED HAD BEEN DISMISSED CITING THE FOLLOWING - THE ASSESSEE S EEKS TO RAISE CERTAIN POINTS OF LAW IN THIS APPEAL WHICH WERE SUBJECT MATTERS BEFORE THIS COURT IN FOUR APPEALS ALREADY DECIDED AND IN ALL THE FOUR APPEALS IT WAS FOUND THAT THE QUESTIONS RAISED WERE NOT SUBSTANTIAL QUESTIONS OF LAW. THESE DECISIONS ARE RA JMARIDIR ESTATES PRIVATE LIMITED VS. PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKAIA - III REPORTED IN (2016) 386 ITR 162 (KOL), M/S. PRAGATI FINANCE MANAGEMENT PRIVATE LIMITED VS. CIT - II IN ITAT NO. 178 OF 2016 WHICH WAS DECIDED ON 7TH MARCH, 201 7, SUCCESS T OURS AND TRAVELS PRIVATE LIMITED & ANR. VS. INCOME TAX OIJICER, WARD - 9(4) KOLKATA & ORS. IN ITAT NO. 17 8 OF 2015 WHICH WAS DECIDED ON 23RD I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 6 MARCH, 2017 AND M/S. AIM FINCON PVT. LTD. V.S. COMMISSIONER OF INCOME - TAX, KOLKATA - III IN ITAT NO. 137 OF 2016 WHIC H IS DECIDED TODAY ITSELF. THE INSTANT APPEAL AND STAY APPLICATION SHALL ACCORDINGLY STAND DISMISSED.' THE ASSESSEE FILED A SCA BEFORE THE SUPREME COURT ON THE ISSUE WHICH HAD BE EN DISMISSED BY THE SUPREME COURT VIDE SPECIAL LEAVE TO APPEAL (C) NO(S). 239 76/2017, DISMI SSED THE APPEAL OF THE ASSESSEE. (II) IT IS PERUSED THAT THE ASSESSEE HAS TAKEN THE VIEW THAT SINCE HE HAS MADE PAYMENT TO THE AGENT OF THE NONRESIDENT SHIP OWNER, AS PER CBDT CIRCULAR 723 DTD. 19.09.1995, HE STEPS INTO THE SHOES OF THE PRIN CIPAL AND ACCORDINGLY PROVISIONS OF SECTION 172 WOULD APPLY AND PROVISIONS OF SECTION 194C OR 195 WOULD NOT APPLY. SECTION 172 IS RELATED TO LEVY AND RECOVERY OF THE TAX, SHIP - WISE, AND JOURNEY WISE, AND REQUIRES THE FILING OF THE RETURN WITHIN A MAXIMUM T IME OF THIRTY DAYS FROM THE DATE OF DEPARTURE OF THE SHIP. BUT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENT TO PROVE THAT SUCH RETURNS HAVE BEEN FILED BY OR ON BEHALF OF THE AGENT 'INTER OCEAN SHIPPING AND LOGISTICS LTD BY WHICH THE APPLICABILITY OF SECTION 172 AND NON APPLICABILITY OF SECTION 194C OR SECTION 195 COULD BE ASCERTAINED. THE ASSESSEE HAS ONLY SUBMITTED THE COPSES OF INVOICES WHICH CAN LEAD TO THE CONCLUSION THAT THE PAYMENT HAS BEEN MADE TO THE SAID PARTY, BUT IT DOES NOT PROVE THAT THE AGENT HA S BEEN COVERED UNDER THE PROVISIONS OF SECTION 172 OF IT ACT. THUS, THE CONTENTION OF THE ASSESSEE THAT AS THE AGENT IS COVERED U/S 172 OF IT ACT AND THAT PROVISIONS OF| SECTION 195/194C WOULD NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE IS NOT ACCEPTABLE . THE AO IS THEREFORE, DIRECTED TO TAKE FURTHER NECESSARY ACTION IN THIS REGARD. T HE A.O. HAS NOT ENQUIRED ABOUT THE APPL ICABILITY OF THE TD S PROVISIONS OR - CIRCULAR NO, 723 OF CBDT, WHICH I S CLAIMED TO HAVE BEEN IN APPLICATION ON THE FACTS OF ASSESSEE. ( III) THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF FILING FORM 3CEB ELECTRONICALLY. THE ASSESSEE CONTENTION THAT THE SAME HAD BEEN FILED PHYSICALLY CANNOT BE ACCEPTED AS THE SAID FORM IS NULL AND VOID AND WITHOUT ANY MERITS. IN RESPECT OF FILING OF FORM 3CEB, THE ASSESSEE WAS REQUIRED TO FILE .IT - ELECTRONICALLY AND FILING THE SAME BEFORE THE ASSESSING OFFICER MANUALLY IMPLIES THAT THE FORM 3CEB IS NON - EST IN RESPECT OF THE ASSESSEE AND THEREFORE, WARRANTS INVOKING OF PENAL PROVISIONS OF .SECTION 271B A OF THE IT ACT. FURTHER, AS PER SECTION 92E EVERY PERSON WHO HAD ENTERED INTO AN INTERNATIONAL TRANSACTION DURING A PREVIOUS YEAR SHALL OBTAIN A REPORT FROM AN ACCOUNTANT AND FURNISH SUCH REPORT ON OR BEFORE THE SPECIFIED DATE IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED IN THE PRESCRIBED MANNER BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED. FROM THE LANGUAGE OF SEC. 92E IT IS CLEAR THAT THE ASSESSEE HAS TO OBTAIN REPORT IN RESPECT OF INTERNATIONAL TRANSACTION FROM AN ACCOUN TANT AND THE SAME IS TO BE FILED BEFORE THE AO BEFORE THE DUE DATE FOR FILING OF THE RETURN. UNDER RULE 10E THE REPORT FROM THE ACCOUNTANT IS REQUIRED TO BE FURNISHED U/S 92E BY EVERY PERSON WHO HAS ENTERED INTO INTERNATIONAL TRANSACTION DURING THE PREVIOU S YEAR SHALL BE IN FORM NO. 3CEB AND VERIFIED IN THE MANNER INDICATED THEREIN. FROM THE LANGUAGE OF SEC, 92E IT IS CLEAR THAT THE REPORT IN FORM 3CEB IS TO BE FILED BY THE SPECIFIED DATE I.E. DUE DATE FOR FILING THE RETURN. THE REPORT IN FORM 3CEB FROM AN ACCOUNTANT IS NOT A REPORT OF AUDIT. IT IS A REPORT IN RESPECT OF INTERNATIONAL TRANSACTION CERTIFYING THE CLAIM OF THE ASSESSEE. THEREFORE, THE ASSESSEE WAS REQUIRED TO SUBMIT THE FORM 3CEB AS PER RULE 10E BEFORE - THE SPECIFIED DATE I.E. THE DUE DATE FOR FILING OF THE RETURN (E - FILING MANDATORY). SINCE THE ASSESSEE HAS NOT FILED A REPORT IN FORM 3CEB BEFORE THE DUE DATE OF FILING OF THE RETURN ELECTRONICALLY, IT ESCAPED ITSELF FROM THE AMBIT OF GETTING COVERED BY THE S COPE OF DETERMINING OF ALP BY THE DEPA RTMENT AND PENALTY U/S 271BA IS LEVIABLE IN THIS CASES. (IV) MOREOVER, IT IS APPARENT THAT THE APPELLANT HAD EXPORT SALES OF RS.13,66,87,844/ - TO M/S. SUMMIT RESEARCH LAB (USA) I.E. RELATED PARTY AND HENCE, THE REFERENCE TO TPO COULD HAVE BEEN MADE BY THE A.O, IN VIEW OF THE PROVISIONS OF SECTION 92CA READ WITH 92C OF THE I.T. ACT, TO ASCERTAIN THE ARMS LENGTH PRICE. BUT THE A.O, HAS FAILED TO DO IN OBSERVING THE ABOVE SAID PROVISIONS OF LAW. 6. I , THEREFORE, HOLD THAT THE ASSESSMENT ORDER DATED 23,03. 2016 PASSED BY THE A.O, U/S,143 (3) OF THE ACT IN THE CASE OF THE ASSESSEE IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL IN THE INTEREST OF THE REVENUE BY REASON OF FAILURE BY THE A.O. TO MAKE PROPER INQUIRY/VERIFICATION REGARDING THE I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 7 APPLICABILITY OF TDS P ROVISIONS ON THE FREIGHT PAYMENTS AND LEVY OF PENALTY U/S. 271BA OF THE I.T. ACT AND ALSO REFERENCE TO TPO U/S. 92C, THUS, THE A.O. HAS FAILED IN APPLICATION OF LAW UPON THE FACTS ON RECORD AND DID NOT APPLY HIS MIND ALSO. I, THEREFORE, SET ASIDE THE ASSES SMENT ORDER U/S.143 (3) OF THE ACT, DATED 23.03.2016 IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2013 - 14 AND, DIRECT THE A.O. TO MAKE A FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRIES AND VERIFICATION ABOUT THE ISSUES NOTED ABOVE INCLUDING REFERENCE TO TPO, PE NALTY PROCEEDINGS U/S. 271BA OF THE I .T. ACT AND APPLICABILITY OF CIRCULAR NO, 723, S ECTION 172, 194C OR 195 OF THE I .T. ACT ETC. 7. THE ASSESSING OFFICER SHALL PASS FRESH ASSESSMENT ORDER AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN VIEW OF THE DIRECTIONS GIVEN IN THIS ORDER. 4 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING DETAILED SUBMISSION FILED BEFORE THE LD. PR. CIT ALON G WITH ANNEXURES AND COPY OF 3C EB FOR ASSESSMENT YEAR 2013 - 14. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON A NUMBER OF JUDICIAL PRONOUNCEMENTS PLACED IN THE PAPER BOOK. THE LD. COUNSEL CONTENDED THAT DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER HAS ASKE D THE ASSESSEE TO FURNISHED COP IES OF LEDGER ACCOUNT AND BILLS OF PARTIES ALONG WITH DETAILS OF TDS PAYMENTS INCLUDING THE DETAIL IN RESPECT OF EXPORT FREIGHT AMOUNTING TO RS. 2 , 03 , 66 ,683/ - . IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS SUBMITTED COPIES OF LEDGER ACCOUNT OF EXPORT FREIGHT REFERRED AT PAGE NO. 12 TO 13 OF THE PAPER BOOK AND COPIES OF SAMPLE INVOICE S AT PAGE 14 TO 178 OF THE PAPER BOOK D URING THE COURSE OF ASSESSMENT YEAR . IN VIEW OF THIS, THE LD. COUNSEL HAS SUBMITTED THAT THE NECESS ARY DOCUMENT AND INFORMATION WERE AVAIL ABLE ON RECORD WITH THE ASSESSING OFFICER AND AFTER VERIFICAT ION OF THESE DOCUMENT S , T HE ASSESSING OFFICE R HAS ALLOWED THE CLAIM OF DEDUCTION OF EXPENSES IN RESPECT OF FREIGHT AMOUNT . FURTHER , THE LD. COUNSEL HAS ALSO REFERRED THAT AS PER CIRCULAR NO. 723 ISSUED BY THE CBDT DATED 19 - 09 - 1995, T HE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS IN RESPECT OF AFORESAID IMPUG NED EXPORT PAYMENT AS THIS CIRCULAR CLARIFIES THAT WHERE PAYMENT IS MADE TO THE SHIPPING AGENTS OF ON - RESIDENT SHIP - OWNER OR CHARACTER, THE PROVI SIONS OF SECTION 172 SHALL APPLY AND SECTION 194 OR 195 SHALL NOT BE I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 8 APPLICABLE. IT IS ALSO CONTENDED THAT IT IS DEMONSTRATED FROM THE ABOVE REFERRED MATERIAL FURNISHED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE PAYMENT TO THE INDIAN AGENTS O F THE SHIPPING COMPANY FOR WHICH NO TDS IS REQUIRED TO BE DEDUCTED. IN RESPECT OF FILING OF 3C EB REPOT , THE LD. CO U NSE L SUBMITTED THAT ASSESSEE HAS FILED FORM 3C EB REPORT MANUALLY THEREFORE IT CANNOT BE SAID THAT ASSESSEE HAS NOT FURNISHED A REPORT AS REQ UIRED U/S. 192E OF THE ACT. CONSIDERING THIS , PENALTY U/S. 271BA OF THE ACT CANNOT BE LEVIED. THE LD. COUNSEL HAS ALSO REFERRED CBDT CIRCULAR NO. 3/2016 DATED 10 TH MARCH, 2016 I N RESPECT OF TYPE OF CASES TO BE REFERRED TO T HE TPO. T HE LD. COUNSEL HAS CO NTENDED THAT SINCE FORM 3C EB MANUALLY FI L E D WAS ON RECORD, THEREFORE, IT CAN N O T BE CONSTRUED THAT ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND NO REFERENCE WAS MADE TO THE TPO. 5 . ON THE OT H E R HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED T H A T ASSESSING OFFICER HAS NOT MADE ANY VERIFICATION AND APPLIED HIS MIND IN T H E ASSESSMENT YEAR IN RESPECT OF THE AFORESAID ISSUES, THEREFORE, THE LD. PR. CIT HAS RIGHTLY HELD THAT THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT BY THE ASSESSING OFFICER W AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LD. DEPARTMENTAL REPRESENTATIVE HAS ALSO CONTENDED THAT AS PER RULE 12(2) IT IS MANDATORY FOR THE ASSESS EE TO FURNISH REPORT IN FORM 3C EB ELECTRONICALLY W .E.F. 01 - 04 - 2013, THEREFORE, BECAUSE OF NON - SUBMISSION OF FORM 3CEB ELECTRONICALLY THE CASE OF THE ASESSEEE COULD NOT BE REFERRED TO THE TPO , THEREFORE , HE HAS JUSTIFIED THE ORDER OF THE PR. CIT PASSED U/S. 263 OF THE ACT. 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFUL LY. THE ASSESSING OFFICER HAS PASSED ORDER U/S. 143(3) OF THE ACT ON I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 9 22 ND MARCH, 2016 ACCEPTED THE TOTAL LOSS AS SHOWN IN RETURN OF INCOME FILED BY THE ASSESSEE. WE HAVE GONE THROUGH THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IN WHICH T HE ASSESS ING OFFICER HAS CONCISELY CONCLUDED THAT ON THE BASIS OF INFORMATION AND DETAIL OBTAINED FROM THE ASSESSE E F R O M TIME TO TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE TOTAL LOSS OF RS. 1 , 35 , 18 , 193/ - DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME F ILED HAS BEEN ACCEPTED. N O OTHER ISSUE HAS BEEN PARTICULARLY ELABORATE D IN THE ORDER PASSED U/S. 143(3) ON 22 ND MARCH, 2016. THEREFORE, WE HAVE GONE THROUGH MATERIAL ON RECORD PLACED IN THE PAPER BOOK WHICH WAS FURNISHED BEFORE THE ASSESSING OFFICER DURIN G THE COURSE OF ASSESSMENT YEAR. REGARDING ISSUE OF NON - DEDUCTION OF TDS IN RESPECT OF EXPORT FRIGHT AMOUNTING TO RS. 2 , 03 , 66 , 683 / - MA DE TO INTER OCEAN SHIPPING AND LOGISTICS SERVICES, IT IS DISCERNED FROM THE DETAIL THAT AS PER PAGE N O. 11 OF THE PAPER BOOK , THE ASSESSEE HAS CALLED COPIES OF LEDGER ACCOUNT OF PARTIES ALO NG WITH DETAIL OF TDS PAYMENT IN RESPECT OF PAYMENT OF EXPORT FREIGHT OF RS. 2,03,66,683/ - . T HE ASSESSEE HAS FURNISHED THE LEDGER ACCOUNT OF EXPORT PAYMENT ALONG WITH COPIES OF SAMPLE INVOICES AS PER THE DETAIL PLACED IN PAPER BOOK PAGE NO. 12 AND 13 AND PAGE NO. 14 TO 178. FURTHER , IT IS NOTICED THAT INDIAN OCEAN SHIPPING AND LOGISTICS SER VICES WAS AN INDIA AGENT ACTING ON BEHALF OF NON - RESIDENT SHIPPING COMPANY FOR COLLECTING FREIGHT DEMURRAGE AND OTHER CHARGES AND REIMBURSE THE SAME TO TH E SHIPPING COMPANY. FURTHER , THE CBDT CIRCULAR NO. 723 DATED 19 TH SEP, 1995 ALSO CLARIFIES THAT WHERE PAYMENT IS MADE TO THE SHIPPING AGENTS OF NON - RESIDENT, SHIP OWNER O R CHARTER, THE AGENT STEPS INTO THE SHOE OF THE PRINCIPAL I.E. SHIPPING COMPANY. ACCORDINGLY, PROVISION OF SECTION 172 SHALL APPLY AND SECTION 194C OR 195 SHALL NOT BE APPLICABLE. ON IDENTICAL ISSUE AND FACTS, THE ITAT (CHENNAI) IN THE CASE OF T. I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 10 MATHIMARAN VS. CIT (2015) 60 TAXM AN.COM 271 DATED 23 RD SEP, 2014 HELD THAT AS PER CIRCULAR ISSUED BY THE CBDT NO. 723 DATED 19 TH SEP, 1995 WHERE THE PROVISION SECTION 172 APPLY PROVISIONS OF SECTION 194C AND 195 RELATING TO TAX DEDUCTION AT SOURCE ARE NOT APPLICABLE. SIMILARLY, THE ITAT AHMEDABAD IN THE CASE OF STEELCO GUJARAT LTD. VS. ACIT (2018) 92 TAXMAN.COM 27 (AHMEDABAD BENCH) DATED 20 TH JAN, 2017 AFTER GIVING REFERENCE TO CIRCULAR NO. 723 HELD THAT WHERE PROVISION OF SECTION 172 APPLIES AND PROVISION S OF SECTION 194C OR 195 ARE NOT APPLICABLE. SIMILARLY, THE ITAT CHANDIGARH IN THE CASE OF ITO VS. BHOGAL E XPORT (2013) 40 TAXMAN.COM 82 (CHANDIGARH TRIB) DATED 23 RD AUGUST, 2013 A FTER REFERRING CIRCULAR NO. 723 DATED 19 - 09 - 1995 HAS HELD THAT PROVISIONS OF SECTION 194C WERE NOT APP LICABL E IF GOODS WERE DISPATCHED THROUGH NON - RESIDENT SHIPPING COMPANIES OR THROUGH FREIGHT RESIDENT AGENTS. SIMILARLY, ITAT MUMBAI IN T H E CASE OF K ULODAY TECH NOPACK PVT. LTD. VS. ITO ( 2017) 86 TAXMNAN.COM 74 (MUMBAI - TRIB) DATED 29 TH SEP, 2017 AFTER REFERRING THE CBDT CIRCULAR NO. 723 DATED 19 - 09 - 1995 HAS HELD THAT THE OCEAN FREIGHT, DEMURRAGE CHARGE ETC. PAID TO INDIAN AGENTS OR AUTHORIZED REPRESENTATIVE OF NON - RESIDENT SHIPPING COMPANIES ARE NOT COVERED FOR DEDUCTION OF TAX AT SOURCE UNDER PROVISIONS OF SECTI ON 194C OR 195 OF THE ACT. 6.1 IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, WE OBSERVE THAT LD. PR. CIT HAS FAILED TO CONSIDER THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED THE RELEVANT MATERIAL IN RESPECT OF EXPORT F REIGHT PAYMENT AND THE LD. PR. CIT HAS ALSO NOT CONTROVERT ED THE THESE UNDISPUTED FACTS AND FINDINGS BROUGHT TO HIS NOTICE BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS U/S. 263 OF THE ACT. CONSIDERING ABOVE I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 11 MATERIAL FACTS OF THE CASE, WE OBSERVE THAT THE PR. CIT HAS FAILED TO JUSTIFY HOW THE ORDER PASSED U/S. 1 43(3) OF THE ACT IN RESPECT OF NON - DEDUCTION OF TAX ON PAYMENT OF EXPORT FREIGHT AMOUNTING TO RS. 2,03,66,683/ - WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . THEREFORE , WE ARE NOT IN CLINED WITH TH E DECISION OF PR. CIT ON THE ISSUE OF NON - DEDUCTION OF T D S ON FREIGHT PAYMENT AS THE LD. PR. CIT HAS FAI LED TO SUBSTANTIATE THAT ORDER PASSED BY T H E ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE , THE DE CISION OF LD. PR. CIT TO REVISE THE ORDER U/S. 263 ON THE ISSUE OF EXPORT FREIGHT PAYMENT IS NOT JUSTIFIED. T HIS PART OF GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED . 6.2 IN RESPECT OF OTHER PART OF GROUND OF APPEAL OF THE ASSESSE PERTAINING TO NON - SUBM ISSION OF F ORM 3C EB , I T IS NOTICED THAT LD. PR. CIT HAS HELD THAT THE ORDER PASSED U/S. 143(3) OF THE ACT BY THE ASSESSING OFFICER W AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE AFORESAID REPORT WAS NOT FILED ON ELECTRONIC MODE BY THE ASSESSEE . A S A RESULT THE CASE OF THE ASSESSEE COULD NOT BE REFERRED TO THE TRANSFER PRICING OFFICER TO EXAMINE THE INTERNATIONAL TRANSACTION CA RRIED OUT BY THE ASSESSEE WITH I T S RELATED PARTIES . IN THIS REGARD, THE LD. COUNSEL HAS SUBMITTED THAT I T HAS FI L E D FORM 3C EB MANUALLY ON 30 TH SEP, 2013. THEREFORE, IT CANNOT BE SAID THAT ASSESSEE HAS NOT FURNISHED A REPORT U/S. 92E OF THE ACT. IN THIS CONNECTION , WE HAVE GONE THROUGH PROVISION OF THE ACT AND INCOME TAX RULE AND IT IS NOTICED THAT IT HAS B EEN PRESCRIBED IN THE IT RULE, 1962 . RULE 12(2) THAT IT IS MANDATORY THAT TH E ASSES S EE SHALL FURNISH 3C EB REPORT ELECTRONICALLY W.E.F. 01 - 04 - 2013. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND PROVISIONS OF LAW , WE CONSIDER THAT THE ASSESSEE HAS NOT FI LED THE AFORESAID REPORT ELECTRONICALLY AND AS RESULT THE I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 12 CASE OF THE ASSESSEE COULD NOT BE REFERRED TO THE TRANSFER PRICING OFFICER BY THE ASSESSING OFFICER. WE CONSIDER THAT THIS ISSUE WAS NOT EXAMINED BY THE ASSESSING OFFICER AS THE ASSESSEE HAS ALSO NOT BROUGHT ON RECORD THAT WHY THE AFORESAID REPORT IN 3C EB WAS NOT FI L E D ELECTRONICALLY. TO THIS EXTENT , WE FIND THAT LD. PR. CIT WAS JUSTIFIED IN INVOKING THE PROVISI ON OF SECTION 263 OF THE ACT HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE TO THE EXTENT OF NON - FILING OF FORM 3C EB REPORT. THE ASSESSE MAY SUBMIT CORRESPONDING REASONS FOR NOT FILING THE FORM 3CEB ELECTRONICALLY BEFORE LD. CIT(A) AT THE TIME OF APPELLATE PROCEEDINGS. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY ANOMALIES IN THE DECISION OF THE LD. CIT(A) FOR REVISION UNDER SECTION 263 OF THE ACT TO THE EXTENT OF DEFAULT IN FILING FORM 3CEB REPORT IN ELECTRONIC MODE AS PRESCRIBED IN THE I.T. RULE 1962. 7 . IN THE R ESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 05 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEM BER AHMEDABAD : DATED 27 /05 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 1338 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SUMMIT (INDIA) WATER TREATMENT & SERVICES LT D. VS. PRINCIPAL CIT 13 BY ORDER/ , / ,