ASAP Infosystems Pvt Ltd., CHENNAI V. DCIT, CHENNAI

ITA 2960/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8786 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 08-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S SRIDHAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! ' . # , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.2960/MDS/2014 ( / ASSESSMENT YEAR: 2007-08) M/S. ASAP INFOSYSTEMS PVT.LTD. 416-D, MALAR COLONY, ANNA NAGAR, CHENNAI-600 040. VS THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1), CHENNAI. PAN: AADCA8240N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. SHIVA SRINIVAS, JCIT /DATE OF HEARING : 12 TH JULY, 2016 /DATE OF PRONOUNCEMENT : 15 TH JULY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVE D BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS (CENTRAL)-I, CHENNAI DATED 31.03.2014 IN IT A NO.244/2013-14 PASSED UNDER SECTION 143(3) R.W.S. 1 47 & 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF ` 63,28,613/- MADE BY THE LEARNED ASSESSING OFFICER B Y 2 ITA NO.2960 /MDS/2014 INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS ON THE PAYMENT OF PROFESSIONA L & TECHNICAL CHARGES. (II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF ` 7,98,916/- MADE BY THE LEARNED ASSESSING OFFICER B Y INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS ON THE PAYMENTS MADE UNDER VARIOUS HEADS. 3. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY L IMITATION OF 172 DAYS AND THE COUNSEL FOR THE ASSESSEE HAS F ILED A PETITION AND ALSO AFFIDAVIT OF THE ASSESSEE EXPLAI NING THE REASON FOR THE DELAY IN FILING THE APPEAL STATING T HAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS MISPLACED BY THE STAFF OF CHARTERED ACCOUNTANT. IT WAS FURTHER SUBMITTED THAT THE DELAY IN FILING THE APPE AL WAS NEITHER WANTON NOR WILLFUL AND THEREFORE PRAYED FOR CONDONATION OF DELAY. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WE ARE SATISFIED THAT THERE WAS REASONABL E CAUSE FOR THE DELAY IN FILING THE APPEAL. HENCE IN THE IN TEREST OF JUSTICE, WE HEREBY CONDONE THE DELAY IN FILING THIS APPEAL AND ADMIT THE SAME FOR ADJUDICATION. 3 ITA NO.2960 /MDS/2014 4. THE ASSESSEE HAS ALSO RAISED A GROUND WITH REGAR D TO JURISDICTION, HOWEVER, HE DID NOT PRESS THE SAME AN D ACCORDINGLY THE GROUND WITH RESPECT TO JURISDICTION STANDS DISMISSED. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2007-08 ON 29.10.2007 ADMITTING INCOME OF RS.25,14, 350/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LE ARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD MA DE PAYMENT TO ITS TRAINEES AGGREGATE OF WHICH AMOUNTIN G TO RS.63,28,613/- WITHOUT DEDUCTING TAX AT SOURCE. F URTHER, THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAD MADE THE FOLLOWING PAYMENTS WITHOUT DEDUCTING TAX A T SOURCE:- NATURE OF PAYMENTS AMT. PAID RS. AUDIT FEES 50,000 BUSINESS PROMOTION 1,18,563 RENT 1,39,500 RECRUITMENT EXPENSES 2,98,286 SECURITY GUARD CHARGES 1,92,567 TOTAL 7,98,916 THEREFORE, HE INVOKED THE PROVISIONS OF SECTION 40( A)(IA) OF THE ACT AND MADE DISALLOWANCE OF THE SAME. 4 ITA NO.2960 /MDS/2014 6. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER AGREEING WITH THE VIEW OF THE LEARNED ASSES SING OFFICER. 7. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE PAYMENTS MADE TO THE TRAINEES WERE MEAGER AND T HEY WERE BELOW TAXABLE LIMIT AND HENCE THE PROVISIONS R ELATING TO TDS IS NOT APPLICABLE. HE FURTHER SUBMITTED THAT WI TH RESPECT TO THE OTHER PAYMENTS ALSO HE WILL BE ABLE TO PRODU CE SUFFICIENT MATERIALS TO ESTABLISH THAT THE PROVISIO NS OF TDS WILL NOT BE APPLICABLE SUBSTANTIALLY. HENCE, IT WAS PLE ADED THAT THE MATTER MAY BE REMITTED BACK TO THE LEARNED ASSE SSING OFFICER FOR DENOVO CONSIDERATION. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OBJECTED TO THE SUBMISSIONS OF THE LEARNED AUTHORIZ ED REPRESENTATIVE. HE ARGUED BY STATING THAT THE ASSES SEE WAS NOT AT ALL CO-OPERATING DURING THE ASSESSMENT PROCE EDINGS EVEN THOUGH SUFFICIENT OPPORTUNITIES WERE PROVIDED. HENCE IT 5 ITA NO.2960 /MDS/2014 WAS SUBMITTED THAT THE ORDERS OF THE REVENUE MAY BE CONFIRMED. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. ON PERU SING THE ORDERS OF THE LEARNED ASSESSING OFFICER AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WE FIND THAT T HE ASSESSEE WAS PROVIDED WITH SUFFICIENT OPPORTUNITY O F BEING HEARD INSPITE OF THAT HE HAD REFRAINED FROM PRODUCI NG THE RELEVANT DOCUMENTS TO ESTABLISH HIS CLAIM. THIS LE THARGIC ATTITUDE OF THE ASSESSEE IS NOT APPRECIABLE. HOWEVE R, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BAC K TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR FRESH CONSIDER ATION. WE ALSO DIRECT THE LEARNED ASSESSING OFFICER TO ADMIT ANY FRESH EVIDENCE PRODUCED BY THE ASSESSEE AND THEREAFTER DE CIDE THE MATTER AS PER LAW & MERITS. AT THE SAME TIME, W E ALSO CAUTION THE ASSESSEE TO CO-OPERATE WITH THE PROCEED INGS BEFORE THE REVENUE FAILING WHICH THE REVENUE SHALL BE AT LIBERTY TO PROCEED WITH THE MATTER AS PER LAW. 6 ITA NO.2960 /MDS/2014 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15 TH JULY, 2016 SD/- SD/- ( ! ' . # ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 15 TH JULY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF