SHRI RAMDEOBABA CHARITABLE SOCIETY, Akola V. ADDL.C.I.T. (TDS) RANGE-1, Nagpur

ITA 145/NAG/2017

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8890 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 11-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; TDS; Set aside
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE S HRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 145 / NAG/2017 ASSESSMENT Y EAR: 2010 - 11 TO 2012 - 13 SHRI RAMDEOBABA CHARITABLE SOCIETY, C/O S.S. CHAVAN, NEAR LIC OFFICE, RAM NAGAR, AKOLA 444002 TAN : NGPS0 9194D VS. THE ADDL. COMMISSIONER OF INCOME TAX (TDS), RANGE - 1, NAGPUR - 440001 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P DEWANI (AR ) REVENUE BY : SHRI GITESH KUMAR ( SR. D R ) D ATE OF HEARING: 08 /05 /201 8 DATE OF PRONOUNCEMENT: 10 / 05 /201 8 O R D E R PER RAM LAL NEGI, JM THE APPELLANT/ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 11.01.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, NAGPUR, WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED AGAINST THE ORDER PASSED UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. IN THIS CASE, IT WAS NOTICED THAT THERE IS A DELAY IN FILING FORM NO. 26 - Q FOR THE AS SESSMENT YEARS 2009 - 10 TO 2011 - 12 FOR ALL THE QUARTERS. ACCORDINGLY, THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE - 1, NAGPUR ISSUED SHOW CAUSE NOTICE. IN RESPONSE THEREOF THE ASSESSEE SUBMITTED WRITTEN REPLY INTER ALIA CONTENDING THAT REFUNDS OF TDS ARE DUE FROM THE DEPARTMENT FOR LAST TWO YEARS AND COMPLAINT IN THIS REGARD HAS ALREADY BEEN FILED WITH THE COMMISSIONER (TDS) CIRCLE NAGPUR . T HE ASSESSEE FURTHER CONTENDED THAT IT IS READY TO PAY THE DIFFERENCE BETWEEN TDS PAYABLE WITH 2 ITA NO. 145 / NAG /2017 ASSESSMENT YEAR S : 20 10 - 11 TO 2012 - 13 INTEREST AND TDS RECE IVABLE WITH INTEREST. IN VIEW OF THE ISSUES RAISED BY THE ASSESSEE T HE ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) SOUGHT CLARIFICATION FROM THE AO . THE AO SUBMITTED ITS REPORT AND ON THE BASIS OF THE SAID REPORT, T HE ADDITIONAL COMMISSIONER OF INCOME TA X (TDS) HELD THAT THE ASSESSEE HAS COMMITTED DEFAULT IN NOT SUBMITTING THE TDS RETURN AS PER THE LAW AND LEVIED PENALTY U/S 272A(2)(K) OF THE ACT @ 100 / - PER DAY AMOUNTING TO RS. 4 , 14 , 200 / - . 3. THE ASSESSEE CHALLENGED THE IMPUGNED ORDER BEFORE THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. THE NOTICES ISSUED FOR HEARING OF APPEAL WERE NOT SERVED ON ASSESSEE AND THUS ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE FOR NOT ATTENDING ON THE DATES OF HEARING BEFORE HONBLE CIT (A). 2. THE OR DER PASSED BY A.O. LEVYING PENALTY U/S 272(A)(K) FOR ASSTT. YEAR 2010 - 11, 2011 - 12 & 2012 - 13 AT RS. 1,20,000/ - , RS. 1,44,900/ - AND RS. 1,49,100/ - RESPECTIVELY IS INVALID ILLEGAL AND BAD IN LAW HONBLE CIT ERRED IN CONFIRMING THE SAME. 3. HONBLE CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 272(A)(K) WITHOUT 4. HONBLE CIT (A) ERRED IN CONFIRMING THE PENALTY LEVIED BY A.O U/S 272(A)(K) WITHOUT GIVING PROPER OPPORTUNITY TO ASSESSEE. 5. THE PENALTY LEVIED U/S 272A(2)(K) IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW . 4. SINCE, THE APPELLANT/ASSESSEE DID NOT APPEAR ON THE DATES FIXED FOR HEARING BEFORE THE LD. CIT (A) , THE LD. CIT(A) RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GOLD RELIEF CAPITAL CORPORATION 3 ITA NO. 145 / NAG /2017 ASSESSMENT YEAR S : 20 10 - 11 TO 2012 - 13 LTD. ITA NO. 798 OF 2009 PASSED EX - PARTE ORDER , CONFIRMED THE PENALTY ORDER PASSED U/S 272A(2)(K) AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER IS BAD IN LAW AS THE SAME HAS BEEN PASSED WITHOUT HEARING THE APPEL LANT/ASSESSEE. THE LD. COUNSEL FURTHER CONTENDED THAT THE NOTICES ISSUED BY THE LD. CIT(A) WERE NOT SERVED ON THE ASSESSEE. SINCE, THE PENALTY LEVIED IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW THE SAME IS REQUIRED TO BE DELETED. 6. ON THE OTHER HAND THE LD . DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE NOTICE THAT THE LD. CI T ( A ) HAS PROCEEDED EX PARTE BY DRAWING PRESUMPTION UNDER SECTION 114 OF TH E EVIDENCE ACT THAT EVIDENCE WHICH COULD BE AND IS NOT PRODUCED WOULD, IF PRODUCED, BE UNFAVOURABLE TO THE PERSON WHO WITHHOLDS IT. WHEREAS THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT NOTICES WERE NOT RECEIVED BY THE ASSESSEE. EVEN IF IT IS ASSUMED TH AT THE ASSESSEE DID NOT APPEAR DESPITE SERVICE OF NOTICE, THE LD. CIT(A) WAS REQUIRED TO DECIDE THE APPEAL ON MERITS TAKING INTO CONSIDERATION THE ENTIRE EVIDENCE ON RECORD. HOWEVER, IN THE PRESENT CASE THE LD. CIT(A) HAS DECIDED THE APPEAL FOR NON PROSECU TION. 8. THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD IN THE CASE OF CIT (CENTRAL) NAGPUR VS. PREMKUMAR ARJUNDAS LUTHRA(HUF) 297 CTR 614 (BOM) THAT THE LAW DOES NOT EMPOWER THE CIT (A) TO DISMISS THE APPEAL FOR NON - PROSECUTION . THE OPERATIVE PART OF THE JUDGMENT OF THE HONBLE HIGH COURT READS AS UNDER: - 4 ITA NO. 145 / NAG /2017 ASSESSMENT YEAR S : 20 10 - 11 TO 2012 - 13 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT (A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT FOR DI RECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO HIM AS FOUND IN SECTION 250 (4) OF THE ACT. FURTHER SECTION 250(6) OF THE OBLIGES THE CIT (A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINAT ION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WITH REASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT (A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDES EXPLANATION TO SUB - SECTION (2) OF SECTION 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT (A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN A PPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAISED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT (A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER SECTION 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL . IN FACT THE CIT (A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT WITH EFFECT FROM 1 ST JUNE, 2001 THE POWER OF THE CIT (A) TO SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND RESTORE IT TO THE ASSESSING OFFICER FOR PASSING A FRESH ORDER STANDS WITHDRAWN. THEREFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT (A) IS CO - TERMINUS WITH THAT OF THE ASSESSING OFFICER I.E. HE CAN DO ALL THAT ASSESSING OFFICER COULD DO. THEREFORE JUST AS IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLETE THE ASS ESSMENT BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT (A) TO DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE SECTI ON 251(1)(A) AND (B) AND EXPLANATION TO SECTION 251 (2) OF THE ACT WHICH REQUIRES THE CIT (A) TO APPLY HIS MIND TO ALL ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BEFORE HIM. ACCORDINGLY, T HE LAW DOES NOT EMPOWER THE CIT (A) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF THE ACT. 5 ITA NO. 145 / NAG /2017 ASSESSMENT YEAR S : 20 10 - 11 TO 2012 - 13 9. IN VIEW OF THE FACTS AND THE CIRCUMSTANCES UNDER WHICH THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER AND IN THE LIGHT OF THE JUD GMENT OF THE HONBLE JURISDICTIONAL HIGH COURT DISCUSSED ABOVE, WE SET ASIDE THE EX - PARTE ORDER PASSED BY THE LD. CIT (A) AND SEND THE APPEAL BACK TO THE LD. CIT (A) FOR DECIDING THE SAME ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT/ASSESSEE. WE ALSO DIRECT THE APPELLANT/ASSESSEE TO APPEAL BEFORE THE LD. CIT(A) AND NOT TO SEEK ADJOURNMENTS ON FRIVOLOUS GROUNDS DURING THE PROCEEDINGS. THE APPEAL IS DISPOSED OF ACCORDINGLY. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY , 2018 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDI CIAL MEMBER NAGPUR, DATED: 10 / 0 5 /201 8 ALINDRA, PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PS/PS ) ITAT, NAGPUR