M/s Cyberstar Infocom Pvt Ltd , Bangalore V. The Deputy Commissioner of Income Tax Circle-1(2), Bangalore

ITA 157/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7179 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 16-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASHANTH G S
• Keywords: Recovery proceedings; Non-deduction of tax
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO S . 156 TO 159/BANG/201 8 ASSESSMENT YEAR S : 2011 - 12 & 2013 - 14 TO 2015 - 16 M/S. CYBERSTAR INFOCOM LLP, (FORMERLY M/S. CYBERSTAR INFOCOM PVT. LTD.), NO.463, 10 TH MAIN, 13 TH CROSS, WILSON GARDEN, BENGALURU 560 027. PAN: AABCC 2931 J VS. THE DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), CIRCLE 1(2), BENGALURU. APP ELLANT RESP ONDENT APP ELLANT BY : SHRI PRASHANTH G.S., CA RESPONDENT BY : DR. P.V. PRADEEP KUMAR, ADDL.CIT(DR)(ITAT), BENGAL URU. DATE OF HEARING : 09 . 01.2019 DATE OF PRONOUNCEMENT : 10 . 01 . 201 9 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF CIT(APPEALS), ALL DATED 30.11.2017 RELATING TO THE ASSESSMENT YEARS 2011-12 & 2013-14 TO 2015-16. 2. IN ALL THESE APPEALS, THE ASSESSEE HAS RAISED TH E COMMON GROUNDS OF APPEAL AS FOLLOWS:- ITA NO. 156 TO 159/BANG/2018 PAGE 2 OF 4 1 THE LEARNED INCOME-TAX OFFICER HAS ERRED IN PAS SING THE ORDER IN THE MANNER PASSED AND THE LEARNED CIT (A) -12 HAS ERRED IN CONFIRMING THE SAME. THE IMPUGNED ORDER BEING BA D IN LAW AND IS LIABLE TO BE QUASHED. 2.1 THE AUTHORITIES BELOW HAVE ERRED IN NOT APPRECI ATING THAT ; A) INTEREST U/S. 201(1A) IS COMPENSATORY IN NATURE. B) THE RECIPIENT OF INCOME HAVING FILED LOSS RETURN S NO TAXES WERE PAYABLE TO THE GOVERNMENT. C) NO TAXES BEING PAYABLE TO THE GOVERNMENT, THE QU ESTION OF DELAY IN RECOVERY OF TAXES AND INTEREST FOR DELAY D OES NOT ARISE. AND ERRED IN LEVYING /CONFIRMING THE INTEREST U/S 2 01(1A) OF THE ACT. THE ACTION OF THE AUTHORITIES BELOW BEING CONT RARY TO FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW APPLICABL E IS TO BE NEGATED. 2.2 THE LEVY OF INTEREST U/S. 201(1A) BEING WITHOUT PROPER APPRECIATION OF LAWS AND CONTRARY TO VARIOUS JUDICI AL PRONOUNCEMENTS IS TO BE DELETED. 3. IN ANY CASE AND WITHOUT PREJUDICE THE CALCULATIO N OF INTEREST AS DONE IS ERRONEOUS AND EXCESSIVE. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS OF APPEAL AS FOLLOWS:- 1. THE AUTHORITIES BELOW OUGHT TO HAVE PROVIDED RE LIEF UNDER THE NON-DISCRIMINATION CLAUSE OF ARTICLE 26 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND THE UNITED STATED OF AMERICA IN ACCORDANCE WITH LAW. 2. THE INTEREST UNDER SECTION 201(1A) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE FOR PAYMENT MADE TOW ARDS PURCHASES IS IN VIOLATION OF ARTICLE 26 OF THE DOUB LE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND THE UNITED STATED OF AMERICA. ITA NO. 156 TO 159/BANG/2018 PAGE 3 OF 4 4. IN THE PETITION FOR ADMISSION OF ADDITIONAL GROU NDS, IT IS STATED THAT THE ABOVE ADDITIONAL GROUNDS OF APPEAL WERE NOT URG ED SPECIFICALLY IN THE ORIGINAL GROUNDS OF APPEAL FILED AT THE TIME OF INS TITUTION OF APPEAL. THESE GROUNDS DO NOT INVOLVE INVESTIGATION OF ANY FACTS O THERWISE ON THE RECORD OF THE DEPARTMENT AND ARE ALSO PURE QUESTIONS OF LAW, WHICH GOES INTO THE VERY ROOT OF THE MATTER AND THEREFORE, IT IS PRAYED THAT THE ADDITIONAL GROUNDS MAY BE ADMITTED FOR ADJUDICATION AND DISPOS ED OF ON MERITS FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE. RELIAN CE IS PLACED ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT , REPORTED IN 229 ITR 383 AND ON THE DECISION OF TH E KARNATAKA HIGH COURT IN THE CASE OF GUNDATHUR THIMMAPPA & SONS VS. CIT, REPORTED IN 70 ITR 70 . 5. THE LD. DR HAS NOT PUT ANY SERIOUS OBJECTION FOR ADMISSION OF THE ADDITIONAL GROUNDS. HOWEVER, HE HAS SUBMITTED THAT SINCE THE ASSESSEE HAS RAISED THESE ADDITIONAL GROUNDS FOR THE FIRST T IME BEFORE THE TRIBUNAL, IT MAY BE REMITTED TO THE CIT(APPEALS) FOR HIS CONSIDE RATION. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN OUR OPINION, THE ADDITIONAL GROUNDS RAISED BY TH E ASSESSEE DO NOT INVOLVE ANY INVESTIGATION OF FACTS, WHICH ARE ALREADY AVAIL ABLE ON RECORD AND ALSO THESE ARE PURE QUESTIONS OF LAW WHICH GOES INTO THE VERY ROOT OF THE MATTER. THEREFORE, BY PLACING RELIANCE ON THE JUDGMENT OF H ONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (SUPRA) AND THE HONBLE HIGH COURT OF KARNATAKA JUDGMENT IN THE CAS E OF GUNDATHUR THIMMAPPA & SONS VS. CIT, REPORTED IN 70 ITR 70 , WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUNDS AS THE PRAYER OF THE ASSESSE E IS BONA FIDE . ACCORDINGLY, WE ADMIT THE ADDITIONAL GROUNDS. HOWE VER, THE CIT(APPEALS) HAD NO OCCASION TO CONSIDER THESE ADDITIONAL GROUND S, THEREFORE IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FIL E OF CIT(APPEALS) FOR DECIDING ITA NO. 156 TO 159/BANG/2018 PAGE 4 OF 4 THE ISSUE AFTER CONSIDERATION OF THE SAME AND THERE AFTER DECIDE THE ISSUE ON MERITS, IF REQUIRED. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JANUARY, 2019. SD/- SD/- ( PAVAN KUMAR GADALE ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 10 TH JANUARY, 2019. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.