Walvoil Fluid Power India Private Limited, Bangalore V. Deputy Commissioner Of Income Tax, Transfer Pricing - 2(2)(2), Bangalore

ITA 1620/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3738 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-02-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: R E BALASUBRAMANYAM
• Keywords: Transfer pricing; Reasonable cause; TDS
• Section: 143(3); 142(1); 250; 144C; 143(2); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SRI PAVANKUMAR GADALE , JUDICIAL MEMBER IT (TP)A NO. 1620 /BANG/201 9 (ASSESSMENT YEAR: 2009 - 10 ) M/S. WALVOIL FLUID POWER INDIA PVT. LTD., NO.19, 2 ND CROSS, 2 ND MAIN, KIADB, ATTIBELE INDL. AREA, ATTIBELE, ANEKAL TALUK, BANGALORE - 562107 PAN: AAACW 5954E VS. DY. COMMISSIONER OF INCOME TAX , TRANSFER PRICING 2(2)(2), BANGALORE. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI R.E. BALASUBRAMANYAM, C.A. REVENUE BY: S MT. R. PREMI, JCIT (D.R) DATE OF HEARING : 26.02 .20 20 DATE OF PRONOUNCEMENT : 27 .02 .20 20 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 7, BANGALORE PASSED UNDER SECTION 154 AND 250 OF THE INCOME TAX ACT, 1961 ('THE ACT'). 2 ITA NO. 1620/BANG/2019 2. THE ASSESSEE HAS RAISED THE GROUNDS OF APPEAL THAT , THE CIT ( APPEALS) HAS NOT ADMITTED THE APPEAL BECAUSE OF DELAY IN FILING THE APPEAL AND THE DELAY IS NOT CONDONED . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OF CONTROL VALVES AND FILED THE RETURN OF INCOME ON 29.09 .2009 WITH TOTAL INCOME OF ( - ) RS.7,36,89,967. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS TRANSFER PRICIN G ADJUSTMENT S AND ALSO MADE DISALLOWANCE OF INTEREST ON DELAYED PAYMENT OF TDS /TCS UNDER THE HEA D MISC. EXPENSES, TOOLS WRITTEN OFF AND ASSESSED THE TOTAL INCOME OF ( - ) RS.3,83,70,245 AND PASSED THE ORDER UNDER SECTION 143(3) R.W.S. 144C (13) OF THE ACT. , SUBSEQUENTLY , THE MATTER TRAVELLED TO ITAT AND THE ASSESSING OFFICER HAS PASSED THE ORDER GIVING EFFECT DT.18.12.2017 GIVING EFFECT TO ITAT ORDER. WHEREAS ASSESSES FILED RECTIFICATION PETITION U/SEC154 OF THE ACT AGAINST THE SAID ORDER. SUBSEQUENTLY, TH E ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER UNDER SECTION 154 OF THE ACT DT.24.04.2018. THE CIT(APPEALS) FOUND THAT THE ORDER UNDER SECTION 154 OF THE ACT WAS RECEIVED BY THE ASSESSEE , AND THE APPEAL WAS FILED WITH D ELAY OF 272 DAYS ON 30.05.2018 . T HE ASSESSEE SUBMITTED THAT THE ORDER UNDER SECTION 154 WAS RECEIVED ONLY ON 2.5.2018 AND HENCE THE APPEAL WA S 3 ITA NO. 1620/BANG/2019 FILED WITHIN THE TIME LIMIT. WHEREAS THE CIT(APPEALS) DISCUSSED ON THE ISSUE OF RECEIP T OF ORDER OF TPO DISPATCHED ON 1.8.2017. SINCE THERE IS NO CLARITY OF THE FACT S AND THE DATE S , THE CIT(APPEALS) HAS DISMISSED THE APPEAL WITHOUT CONDONING THE DELAY, BECAUSE NO SUFFICIENT REASONS /CAUSE WAS EXPLAINED FOR DELAY IN FILING THE APPEAL. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASS ESSEE FIL ED AN APPEAL WITH THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ORDER UNDER SECTION 154 OF THE A CT WAS RECEIVED ON 2.5 . 2018 AND THE A PPEAL WAS FILED ON 30.05.2018. THE LD. AR FURTHER SUBMIT TED THAT THE CIT(APPEALS) MADE OBSERVAT IONS IN RESPECT OF DATES, AND FAILED TO CONS IDER THE EVIDENCE SUPPORTING THE SUFFICIENT CAUSE AND PRAYED FOR CONDONATION OF DELAY. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF CIT(APPEALS ). 5. WE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. THE LEARNED AUTHORIZED REPRE SENTATIVE MADE SUBMISSIONS ON CONDONATION OF DELAY. WE FOUND THE CIT(APPEALS) HAS NOT CONDONED THE DELAY AS NO S UFFICIENT CAUSE WAS EXPLAINED . WHEREAS THE LDAR SUBMITTED THE LETTER DT 1 - 7 - 2019 FROM TPO IN RESPECT OF DISPATCH OF ORDERS. WE ARE OF THE OPINION , THAT THE LITIGANT WILL NOT GAIN BY DELAYING THE PROCESS OF FILING OF APPEAL. WE FOUND THE CIT (APPEA LS ) HAS NOT CONDONED THE 4 ITA NO. 1620/BANG/2019 DELAY OF 272 D AYS IN FILLING THE APPEAL AS THERE IS NO SUFFICIENT AND REASONABLE CAUSE EXPLAINED BY THE ASSESS EE. WE RELY ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST KATIJI & OTHERS ( 167 ITR 471 ) (SC) AND OBSERVATIONS RE AD AS UNDER : THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING S. 5 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON 'MERITS'. THE EXPRESSION 'SUFFICIENT CAUSE' EMPLOYED BY THE L EGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. THE DOCTRINE OF EQUALITY BEFORE LAW DEMANDS THAT AL L LITIGANTS, INCLUDING THE STATE AS A LITIGANT, ARE ACCORDED THE SAME TREATMENT AND THE LAW IS ADMINISTERED IN AN EVEN - HANDED MANNER. THERE IS NO WARRANT FOR ACCORDING A STEP - MOTHERLY TREATMENT WHEN THE 'STATE' IS THE APPLICANT PRAYING FOR CONDONATION OF D ELAY. IN FACT, EXPERIENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINERY (NO ONE IN CHARGE OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGMENT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERENT BUREAUCRATIC METHODOLOGY IMBUED WITH THE NOTE - MAKING, FILE - PUSHING, AND PASSING - ON - THE - BUCK ETHOS, DELAY ON ITS PART IS LESS DIFFICULT TO UNDERSTAND THOUGH MORE DIFFICULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY DOES NOT DESERVE A LITIGANT NON GRATA STATUS. THE C OURTS, THEREFORE, HAVE TO BE INFORMED OF THE SPIRIT AND PHILOSOPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION OF THE EXPRESSION 'SUFFICIENT CAUSE'. SO ALSO THE SAME APPROACH HAS TO BE EVIDENCED IN ITS APPLICATION TO MATTERS AT HAND WITH THE END I N VIEW TO DO EVEN - HANDED JUSTICE ON MERITS IN PREFERENCE TO THE APPROACH WHICH SCUTTLES A DECISION ON MERITS. WE CONSIDERING THE OBSERVATIONS OF APEX COURT DECISION AND SUBMISSIONS OF THE ASSESSEE , CONDONE THE DELAY OF FILING THE APPEAL BEFORE THE CIT (A PPEALS) AND RESTORE THE ENTIRE DISPUTED ISSUES TO THE FILE OF CIT (APPEALS) TO ADMIT THE APPEAL AND ADJUDICATE ON MERITS AND PASS A SPEAKING ORDER. FURTHER PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSE SSEE, AND THE ASSESSEE SHALL CO - OPERATE IN SUBMIT TING THE INFORMATION FOR EARLY DISPOSAL OF THE APPEAL AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSE. 5 ITA NO. 1620/BANG/2019 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 .02. 2020 . S D / - S D / - (A.K.GARODIA ) ( PAVANKUMAR GADALE ) ACCOUNTANTMEMBER JUDICIAL MEMBER DATED: 2 7 .02.2020 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE