Dynatrace India Software Operations Pvt Ltd, Bangalore V. Income Tax Officer, Ward-2(1)(3), Bangalore

ITA 1779/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4607 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Initiation of penalty proceedings; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1779 / BANG/201 7 ASSESSMENT YEAR : 20 1 4 - 1 5 M/S. DYNATRACE INDIA SOFTWARE OPERATIONS PVT. LTD., C/O. ZIONRAY CONSULTING PVT. LTD., NO. 39, 2 ND FLOOR, 21 ST MAIN ROAD, NEAR BSK BDA COMPLEX, BANASHANKARI 2 ND STAGE, BANGALORE 560 070. PAN: AACCC7817J VS. THE INCOME TAX OFFICER, WARD 2 (1) (3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 0 7 .0 6 .2018 DATE OF PRONOUNCEMENT : 15 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT (A) 2, BANGALORE DATED 02.06.2017 FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. THE APPELLANT SUBMITS AS UNDER: 1. ORDER BAD IN LAW AND ON FACTS THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) - 2, BENGALURU ['CIT(A)'], UNDER SECTION 250 OF THE INCO ME-TAX ACT, 1961 ['THE ACT'] IS BAD IN LAW AND ON FACTS. 2. ERRONEOUS DISALLOWANCE OF RS. 4,412,760 UNDER SE CTION 40(A)(IA) OF THE ACT 2.1 THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE A O'S ORDER THAT: THE RESELLER'S FINDERS' FEES OF RS. 4,412,760 PAID TO THE RESELLERS ARE IN THE NATURE OF 'COMMISSION' AND LIA BLE FOR TAX DEDUCTION AT SOURCE UNDER SECTION 194H OF THE ACT; AND ITA NO.1779/BANG/2017 PAGE 2 OF 3 SUCH FEES OF RS. 4,412,760 ARE TO BE DISALLOWED UND ER SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF ALLEGED NON-DEDU CTION OF TAX AT SOURCE UNDER SECTION 194H OF THE ACT. 2.2 THE CIT(A) HAS FAILED TO APPRECIATE THAT THE TR ANSACTION BETWEEN THE APPELLANT AND THE RESELLER IS ESSENTIALLY THAT OF A TRANSACTION OF SALE ON A 'PRINCIPAL TO PRINCIPAL' BASIS AND THAT T HERE IS NO PRINCIPAL- AGENCY RELATIONSHIP BETWEEN THE APPELLANT AND THE R ESELLER. 2.3 THE CIT(A) OUGHT TO HAVE HELD THAT THE RESELLER 'S FINDERS' FEES PAID TO THE RESELLERS IS IN THE NATURE OF TRADE DISCOUNT AND NOT 'COMMISSION' AS DEFINED UNDER SECTION 194H OF THE ACT. 2.4 THE CIT(A) HAS ERRED IN NOT FOLLOWING THE VARIO US JUDICIAL DECISIONS WHICH WERE CITED BY THE APPELLANT WHEREIN IT WAS, INTER ALIO, HELD THAT THE TERM 'COMMISSION' WOULD NOT INCLUDE A NY DISCOUNTS PROVIDED BY A TRADER IN THE COURSE OF A SALE TRANSA CTION WITHIN ITS AMBIT FOR IT TO BE MADE LIABLE TO TDS UNDER SECTION 194H OF THE ACT. 3. INITIATION OF PENALTY PROCEEDINGS THE AO ERRED IN INITIATING PROCEEDINGS AGAINST THE APPELLANT UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE ACT. 4. RELIEF 4.1 THE APPELLANT PRAYS THAT DIRECTIONS BE GIVEN TO GRANT ALL SUCH RELIEF ARISING FROM THE ABOVE GROUNDS AND ALSO ALL RELIEF CONSEQUENTIAL THERETO. 4.2 THE APPELLANT DESIRES LEAVE TO ADD TO OR ALTER, BY DELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF THE ABOVE GROUNDS, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. THE APPELLANT CRAVES LEAVE TO ADD TO OR ALTER, BY D ELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF THE ABOVE GROUNDS OF AP PEAL, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. THE APPELLANT SUBMITS THAT THE ABOVE GROUNDS ARE IN DEPENDENT OF, AND WITHOUT PREJUDICE, TO ONE ANOTHER. 3. THIS APPEAL WAS FIXED FOR HEARING FOR THE FIRST TIME ON 21.02.2018. ON THIS DATE, THE LD. AR OF ASSESSEE SOUGHT ADJOURNMENT AND ON HI S REQUEST, HEARING WAS ADJOURNED TO 07.06.2018. ON THIS DATE I.E. 07.06.2 018, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THERE IS NO REQUEST FOR ADJOURNMENT AND HENCE, THE APPEAL OF THE ASSESSEE WAS HEARD EX-PARTE QUA THE A SSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). ITA NO.1779/BANG/2017 PAGE 3 OF 3 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR OF THE REVENUE AND GONE THROUGH THE MATERIAL ON RECORD. WE FIND THAT THE APPEAL OF THE ASSESSEE IS FILED AFTER A DELAY OF TWO DAYS AND THERE IS NO REQUEST OF THE ASSESSEE FOR CONDONATION OF THIS DELAY. ALONG WITH THE NOTICE I SSUED BY THE TRIBUNAL FOR HEARING FIXED ON 21.02.2018, THIS WAS INTIMATED TO THE ASSESSEE THAT THE APPEAL IS TIME BARRED BY TWO DAYS AND ALTHOUGH THE LD. AR OF ASSESSEE APPEARED ON 21.02.2018 AND SOUGHT ADJOURNMENT, BUT NO REQUEST W AS MADE FOR CONDONATION OF DELAY TILL DATE. IN THE ABSENCE OF ANY REQUEST FOR CONDONATION OF DELAY, THE DELAY CANNOT BE CONDONED AND THEREFORE, THE APPEAL OF THE ASSESSEE IS NOT ADMISSIBLE AND IS LIABLE TO BE REJECTED AS UNADMITT ED. WE ORDER ACCORDINGLY AND DISMISS THE APPEAL OF THE ASSESSEE AS UNADMITTE D. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 15 TH JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.