M/s Trigyn Technologies India Private Limited, Mumbai V. Assistant Commissioner of Income Tax Circle-12(1), Bangalore

ITA 1959/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8755 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD
• Assessee Lawyers: ANUJ KIPNADWALA
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Condonation of delay; Unabsorbed depreciation; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO . 1959 /BANG/201 8 ASSESSMENT YEAR : 20 0 7 - 0 8 M/S. TRIGYN TECHNOLOGIES (INDIA) PVT. LTD., 27, SDF/SEETZ, ANDHERI EAST, MUMBAI 400 096. PAN : AAACE 4656 K VS. ASSISTANT COMMISSIONER OF INCOME TAX, 12(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. ANUJ KIPNADWALA, ADVOCATE REVENUE BY : DR. SHANKAR PRASAD, ADDL. CIT DATE OF HEARING : 14 . 0 2 .201 9 DATE OF PRONOUNCEMENT : 03 . 0 4 .201 9 O R D E R PER SHRI JASON P BOAZ, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), MYSORE, DATED 29.12.2017 FOR ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE AS UNDER: 2.1 THE ASSESSEE, A COMPANY, ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND CONSULTANCY SERVICES, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 27.10.2007 DECLARING LOSS OF (-)RS.22,00,326/-. THE CASE WAS TAKEN UP FOR SCRUTINY ITA NO. 1959/BANG/2018 PAGE 2 OF 5 FOR THIS ASSESSMENT YEAR AND THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 20.10.2009, WHEREIN THE ASSESSEES TOTAL INCOME DETERMINED AT NIL AFTER SET OFF OF UNABSORBED BUSINESS LOSS OF RS.1,41,40,086/- AND UNABSORBED DEPRECIATION OF RS.74,88,739/-. IN THIS ORDER, THE ASSESSING OFFICER (AO) HAD MADE THE FOLLOWING ADDITIONS / DISALLOWANCES:- (I) ADDITION UNDER THE HEAD LOANS TO SUBSIDIARIES - RS. 3,54,767/- (II) ADDITION UNDER THE HEAD SUNDRY DEBTORS - RS.1,59,84,688/- (III) DISALLOWANCE OF FOREIGN EXCHANGE LOSS - RS. 1,000/- 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 31.10.2009 FOR ASSESSMENT YEAR 2007-08, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) UNDER THE JURISDICTION OF CCIT-1, BANGALORE / PR.CIT-7, BANGALORE. THE ASSESSEES APPEAL CAME TO BE DISMISSED EX-PARTE BY CIT(A), MYSORE VIDE IMPUGNED ORDER DATED 29.12.2017 BY NOT CONDONING THE DELAY OF 3 DAYS IN FILING THE APPEAL BEFORE THE CIT(A). 3. THE ASSESSEE, BEING AGGRIEVED BY THE IMPUGNED ORDER OF CIT(A), MYSORE DATED 29.12.2017 FOR ASSESSMENT YEAR 2007-08, HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL, WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS:- ITA NO. 1959/BANG/2018 PAGE 3 OF 5 4. GROUND NO.1 NON CONDONATION OF DELAY OF 3 DAYS IN FILING APPEAL BEFORE CIT(A) GROUND NO.2 DENIAL OF OPPORTUNITY OF HEARING TO THE ASSESSEE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE 4.1 IN THESE GROUNDS (SUPRA) AND THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE, THE SUM AND SUBSTANCE OF THE AVERMENTS ARE THAT THE CIT(A) HAD GRIEVOUSLY ERRED IN DISMISSING THE ASSESSEES APPEAL, IN LIMINE, BY NOT CONDONING THE DELAY OF 3 DAYS IN FILING THE APPEAL BEFORE THE CIT(A) WITH AFFORDING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER; THEREBY VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. ACCORDING TO THE LEARNED AR, THE ASSESSEE HAS NOT FILED THE APPEAL LATE INTENTIONALLY OR WILLFULLY AS THAT WOULD JEOPARDIZE ITS OWN CASE ESPECIALLY WHEN SUCH HUGE ADDITIONS / DISALLOWANCES HAD BEEN MADE BY THE AO IN THE ORDER OF ASSESSMENT WHICH WERE UNDER CHALLENGE BEFORE THE CIT(A). IT IS PRAYED THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I.E., SINCE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS HAS NOT BEEN CONSIDERED OR ADJUDICATED AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE DELAY OF 3 DAYS IN FILING THE APPEAL BEFORE THE CIT(A) BE CONDONED AND THE CIT(A) BE DIRECTED TO HEAR AND DISPOSE OFF THE ASSESSEES APPEAL ON THE MERITS OF THE GROUNDS RAISED THEREIN. IN THIS REGARD, THE LEARNED AR PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (1987) 167 ITR 471 (SC). 4.2 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE IMPUGNED ORDER OF THE CIT(A). 4.3.1 WE HAVE HEARD AND CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY THERE WAS A DELAY OF 3 DAYS ON THE PART OF THE ASSESSEE IN FILING THE APPEAL BEFORE THE CIT(A). WE ALSO OBSERVE THAT WHILE THE ASSESSEE FILED ITS APPEAL BEFORE CIT(A)-7, BANGALORE AS SEEN FROM THE ITA NO.36/CIT(A)- 7/CO.C/2014-15 RECORDED AT PAGE 1 OF THE IMPUGNED ORDER, THE APPEAL WAS DISPOSED ITA NO. 1959/BANG/2018 PAGE 4 OF 5 OFF BY CIT(A), MYSORE. WE ALSO OBSERVE THAT, ADMITTEDLY, ONLY ONE NOTICE FIXING THE HEARING OF THE APPEAL FOR 15.12.2017 WAS AFFORDED TO THE ASSESSEE BY THE CIT(A) AND THE ASSESSEES LETTER DATED 15.12.2017 SEEKING ADJOURNMENT TO FILE THE NECESSARY DETAILS WAS BRUSHED ASIDE SUMMARILY BY THE CIT(A); WHO DISMISSED THE ASSESSEES APPEAL IN LIMINE BY DECLARING TO CONDONE THE DELAY OF 3 DAYS IN FILING THE APPEAL. 4.3.2 THE HONBLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (SUPRA) LAID DOWN THE PRINCIPLES FOR EXAMINING PETITIONS FOR CONDONATION OF DELAY IN FILING APPEALS, I.E., THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS. IT IS SETTLED POSITION THAT WHILE CONSIDERING SUFFICIENT CAUSE, THE COURT SHOULD TAKE A LIBERAL VIEW IN THE INTEREST OF SUBSTANTIAL JUSTICE, ESPECIALLY WHERE IT IS FOUND THAT THE PARTIES HAVE NOT ACTED WITH MALAFIDE INTENTIONS AND THE EXPLANATIONS / REASONS PUT FORTH ARE SATISFACTORY. IN OUR VIEW, AFTER A CAREFUL PERUSAL OF THE OF THE EXPLANATIONS PUT FORTH FOR THE DELAY OF 3 DAYS IN FILING THE APPEAL, WE FIND THAT THE ASSESSEES DEFAULT IS NEITHER INTENTIONAL NOR MALAFIDE. IN THE FACTUAL AND LEGAL MATRIX OF THE CASE ON HAND, WE ARE OF THE CONSIDERED OPINION THAT THE EXPLANATIONS PUT FORTH BY LEARNED AR/ASSESSEE FOR DELAY OF 3 DAYS IN FILING THE APPEAL BEFORE CIT(A) ESTABLISH SUFFICIENT CAUSE IN THE MATTER. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (SUPRA), WE ARE OF THE OPINION THAT THIS IS A FIT CASE FOR CONDONATION OF DELAY IN FILING THE APPEAL FOR ASSESSMENT YEAR 2007-08 BEFORE THE CIT(A) AND DO SO. WE, ACCORDINGLY, SET ASIDE THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF CIT(A) FOR CONSIDERATION AND ADJUDICATION OF THE GROUNDS RAISED BY THE ASSESSEE ON MERITS OF THE VARIOUS ADDITIONS / DISALLOWANCES. NEEDLESS TO ADD, THE CIT(A) SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD ON ALL ISSUES RAISED BY THE ASSESSEE IN APPEAL AND TO FILE DETAILS / SUBMISSIONS REQUIRED, WHICH SHALL BE CONSIDERED WHILE DECIDING THE ISSUES BEFORE HIM IN ACCORDANCE WITH LAW. WE HOLD AND DIRECT ACCORDINGLY. ITA NO. 1959/BANG/2018 PAGE 5 OF 5 5. IN VIEW OF OUR ORDER SETTING ASIDE THE IMPUGNED ORDER OF CIT(A) DATED 29.12.2017 FOR ASSESSMENT YEAR 2007-08 AND RESTORING THE ISSUES / GROUNDS RAISED BEFORE HIM FOR ADJUDICATION ON MERITS, WE REFRAIN FROM ADJUDICATING THE GROUNDS RAISED BY THE ASSESSEE ON VARIOUS ISSUES ON MERITS. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF APRIL, 2019. SD/- SD/ - SD/ - (N. V. VASUDEVAN) VICE PRESIDENT (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 3 RD APRIL, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.