M/S GAS JEANS PRIVATE LIMITED, MUMBAI V. ASSTT. COMMISSIONER OF INCOME TAX-CIRCLE-9(3)(2), MUMBAI

ITA 1975/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0847 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 09-10-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 09-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; Principle of natural justice; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 1975/MUM/2022 Assessment Year: 2013-14 M/s Gas Jeans Pvt. Ltd., A-Wing, 410,4 th floor, Express Zone, Western Express Highway, Diagonally, Opp. Oberoi Mall, Goregaon-East, Mumbai-400063. Vs. Asst. CIT Circle-9(3)(2), Room No. 418, 4 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AADCG 6602 J Appellant Respondent Assessee by : Mr. Satyaprakash Singh, AR Revenue by : Mr. Sanyam Suresh Joshi, DR Date of Hearing : 10/10/2022 Date of pronouncement : 14/10/2022 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against the order dated 24.06.2022 passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter shall be referred as ‘First Appellate Authority or FAA’) for assessment year 2013-14, raising following grounds : 1. The order dated 24/06/2022 bearing No. ITBA/NFAC/S/250/2022 NATIONAL FACELESS APPEAL CENTRE, DELHI is arbitrary, against natural justice, unlawful, against the provisions of Income Tax Act, 1961, invalid and therefore liable to be quashed. 2. 2. On facts and circumstan C.I.T.(A) has erred in confirming the transfer pricing adjustment of Rs.61,13,689/ Promotion Expenses incurred by the Appellant using profit spilt method by considering AMP E 2. At the outset, the Ld. Counsel of the assessee submitted that this appeal has been decided by the Ld. First Appellate Authority without taking into consideration any reply of the assessee and without adjudication on merit. The Ld. Counsel of the assessee submitted that the appeal was filed by the assessee physically. However, appeal has been decided in faceless manner where notices were issued to the assessee through E environment being new to the assessee, the assessee was not in habit of regularly looking into its E responsed to the various notices issued by the Ld. FAA. Before us, The order dated 24/06/2022 bearing No. A/NFAC/S/250/2022-23/1043565004[1] by the CIT[A], NATIONAL FACELESS APPEAL CENTRE, DELHI is arbitrary, against natural justice, unlawful, against the provisions of Income Tax Act, 1961, invalid and therefore liable to be quashed. 2. On facts and circumstances of the case and in law, the Hon'ble C.I.T.(A) has erred in confirming the transfer pricing adjustment of Rs.61,13,689/- on account of Advertising, Marketing and Promotion Expenses incurred by the Appellant using profit spilt method by considering AMP Expenses incurred by the Appellant. At the outset, the Ld. Counsel of the assessee submitted that this appeal has been decided by the Ld. First Appellate Authority without taking into consideration any reply of the assessee and without adjudication on merit. The Ld. Counsel of the assessee ubmitted that the appeal was filed by the assessee physically. However, appeal has been decided in faceless manner where notices were issued to the assessee through E-mail. The faceless being new to the assessee, the assessee was not in f regularly looking into its E-mail and therefore, could not to the various notices issued by the Ld. FAA. Before us, M/s Gas Jeans Pvt. Ltd. ITA No. 1975/M/2022 2 The order dated 24/06/2022 bearing No. 23/1043565004[1] by the CIT[A], NATIONAL FACELESS APPEAL CENTRE, DELHI is arbitrary, against natural justice, unlawful, against the provisions of Income Tax Act, 1961, invalid and therefore liable to be quashed. ces of the case and in law, the Hon'ble C.I.T.(A) has erred in confirming the transfer pricing adjustment of on account of Advertising, Marketing and Promotion Expenses incurred by the Appellant using profit spilt xpenses incurred by the Appellant. At the outset, the Ld. Counsel of the assessee submitted that this appeal has been decided by the Ld. First Appellate Authority without taking into consideration any reply of the assessee and without adjudication on merit. The Ld. Counsel of the assessee ubmitted that the appeal was filed by the assessee physically. However, appeal has been decided in faceless manner where notices mail. The faceless being new to the assessee, the assessee was not in mail and therefore, could not to the various notices issued by the Ld. FAA. Before us, the Ld. Counsel of the assessee submitted that a fresh opportunity be provided as the assessee is in support of its contention on the various issues on which addition have been sustained. The Ld. Counsel of the assessee given an undertaking that notices issued by the Ld. FAA by him on behalf of the assessee and therefore, h matter may be restored back to the Ld. FAA for deciding afresh. 3. On the other hand, the Ld. Departmental Representative (DR) objected for restoring the matter to the Ld. FAA as already sufficient opportunity were provided to the assessee b 4. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. This is undisputed that this appeal has been adjudicated by the Ld. FAA in faceless manner wherein notices are issued in e and assessee was also required to reply the notices through E the Ld. Counsel of the assessee submitted that a fresh opportunity the assessee is willing to co-operate and file in support of its contention on the various issues on which addition have been sustained. The Ld. Counsel of the assessee given an undertaking that notices issued by the Ld. FAA, shall be responded by him on behalf of the assessee and therefore, h matter may be restored back to the Ld. FAA for deciding afresh. On the other hand, the Ld. Departmental Representative (DR) objected for restoring the matter to the Ld. FAA as already sufficient opportunity were provided to the assessee by the Ld. FAA. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. This is undisputed that this appeal has been adjudicated by the Ld. FAA in faceless manner wherein notices are issued in electronic manner also required to reply the notices through E M/s Gas Jeans Pvt. Ltd. ITA No. 1975/M/2022 3 the Ld. Counsel of the assessee submitted that a fresh opportunity operate and file replies in support of its contention on the various issues on which addition have been sustained. The Ld. Counsel of the assessee given an shall be responded by him on behalf of the assessee and therefore, he prayed that matter may be restored back to the Ld. FAA for deciding afresh. On the other hand, the Ld. Departmental Representative (DR) objected for restoring the matter to the Ld. FAA as already sufficient y the Ld. FAA. We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. This is undisputed that this appeal has been adjudicated by the Ld. FAA in lectronic manner also required to reply the notices through E-mail only. This being the phase of newly inserted scheme of faceless appeal, difficulty in replying by the assessee through E a reasonable cause for non In view of an undertaking given by the Ld. Counsel we feel it appropriate deciding afresh. The Ld. Counsel has provided current address and the current E-mail of provide his E-mal ID: FAA may issue notices on provided alongwith a copy to the Ld. Couns undertaking for complying notices. reasoned order on merit after considering the submission of the assessee. If no submissions are provided then even the Ld. CIT(A) should pass an order deciding the issue assessee are allowed for statistical purposes. only. This being the phase of newly inserted scheme of faceless difficulty in replying by the assessee through E a reasonable cause for non-complying the notices issued by the FAA. In view of an undertaking given by the Ld. Counsel for appropriate to restore the issue back to the Ld. FAA for deciding afresh. The Ld. Counsel has provided current address and mail of the assessee in form No. 36. He has also mal ID: [e-mail] alternatively. The FAA may issue notices on the current physical or E- alongwith a copy to the Ld. Counsel, who has given undertaking for complying notices. The Ld. FAA is directed to pass a reasoned order on merit after considering the submission of the assessee. If no submissions are provided then even the Ld. CIT(A) should pass an order deciding the issue on merit. The grounds of the assessee are allowed for statistical purposes. M/s Gas Jeans Pvt. Ltd. ITA No. 1975/M/2022 4 only. This being the phase of newly inserted scheme of faceless difficulty in replying by the assessee through E-mail could be the notices issued by the FAA. for the assessee, restore the issue back to the Ld. FAA for deciding afresh. The Ld. Counsel has provided current address and in form No. 36. He has also alternatively. The Ld. -mail address as el, who has given The Ld. FAA is directed to pass a reasoned order on merit after considering the submission of the assessee. If no submissions are provided then even the Ld. CIT(A) on merit. The grounds of the 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court in Sd/- (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 14/10/2022 Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// In the result, the appeal filed by the assessee is allowed for nounced in the open Court in 14/10/2022. Sd/- RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai M/s Gas Jeans Pvt. Ltd. ITA No. 1975/M/2022 5 In the result, the appeal filed by the assessee is allowed for /10/2022. - OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Sr. Private Secretary) ITAT, Mumbai