Ninestars Information Technologies Pvt Ltd. , CHENNAI V. DCIT International Tax 2(1), CHENNAI

ITA 2342/CHNY/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0343 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 13-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R VISWANATHAN
• Keywords: Double taxation relief; Opportunity of being heard; TDS
• Section: 201(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 2342/CHNY/2018 / ASSESSMENT YEAR :2010-11 M/S. NINE STARS INFORMATION TECHNOLOGY P. LTD., NO. 72, GREAMS ROAD, THOUSAND LIGHTS, CHENNAI 600 006. [PAN:AABCN0949B] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION 2(1), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI R. VISWANATHAN, C.A. / RESPONDENT BY : SHRI SURESH PERIASAMY, JCIT / DATE OF HEARING : 24.02.2021 /DATE OF PRONOUNCEMENT : 15.03.2021 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 16, CHENNAI, DATED 04.06.2018 RELEVANT TO THE ASSESSMENT YEAR 2010-11. THE GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE ARE THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF TAX AND INTEREST UNDER SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] TOWARDS NON-DEDUCTION OF TDS ON THE PAYMENT TOWARDS PURCHASE OF SOFTWARE. I.T.A. NO. 2342/CHNY/18 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN CONVERTING HISTORICAL NEWSPAPERS AND OTHER PRINTED DOCUMENTS INTO DIGITAL CONTENT. THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS REMITTED AN AMOUNT OF .13,07,000/- TOWARDS PURCHASE OF SOFTWARE AND DID NOT DEDUCT ANY TDS. THE ASSESSING OFFICER HAS OBSERVED THAT SINCE THE ASSESSEE MADE THE PAYMENTS TOWARDS PURCHASE OF LICENSE, THE ROYALTY IS TAXABLE AS PER SECTION 9(1)(VI) OF THE ACT R.W. ARTICLE 12(3) OF DTAA WITH USA. THUS, THE ASSESSEE WAS THEREFORE HELD AS ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE ACT AND LEVIED TAX OF .1,96,050/-. THE ASSESSING OFFICER ALSO LEVIED INTEREST UNDER SECTION 201(1A) OF THE ACT AT .1,84,156/-. ON APPEAL, SINCE THE ASSESSEE HAS NOT PRODUCE ANY EVIDENCE FOR DEDUCTION OF TDS, THE LD. CIT(A) CONFIRMED THE LEVY OF TAX UNDER SECTION 201(1) AND INTEREST UNDER SECTION 201(1A) OF THE ACT. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. BY FILING COPY OF THE TDS DEDUCTION, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS DULY DEDUCTED THE TDS ON THE PAYMENTS MADE TO SHRI JOSEPH P. REYNOLDS AND THE SAME WAS REFLECTED IN THE TDS RETURN. IT WAS FURTHER SUBMISSION THAT DUE TO PAUCITY OF TIME, THE ASSESSEE COULD NOT REPLY BEFORE I.T.A. NO. 2342/CHNY/18 3 THE AUTHORITIES BELOW IN TIME AND PRAYED FOR DELETING THE LEVY OF TAX AND INTEREST UNDER SECTION 201(1) AS WELL AS UNDER SECTION 201(1A) OF THE ACT RESPECTIVELY. IN VIEW OF THE ABOVE SUBMISSIONS, WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE TDS DEDUCTION OF THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE THE DETAILS BEFORE THE ASSESSING OFFICER FOR VERIFICATION. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 15 TH MARCH, 2021 IN CHENNAI. SD/ - SD/ - (S. JAYARAMAN) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 15.03.2021 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.