ACIT-13(1)(2), MUMBAI V. M/S PLAY GAMES 24X7 PVT LTD, MUMBAI

ITA 2962/MUM/2022

AI Insights

The case involves the Assistant Commissioner of Income Tax, Mumbai (Revenue) appealing against the order of the National Faceless Appeal Centre (NFAC) which had deleted certain disallowances made on account of non-compliance with TDS provisions and other related issues for the assessment year 2014-15 concerning M/s. Play Games 24X7 Pvt. Ltd. The Revenue challenged the deletions made by the CIT(A) regarding disallowances related to winnings paid to players, non-compliance on TDS for online promotional games, and advertisement expenses paid to Facebook Ireland. However, the Tribunal dismissed the appeal as the issues had been remitted back to the PCIT for fresh adjudication, rendering the subsequent assessments and appeals infructuous.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301156 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-01-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 20-11-2022
• Other Referred Cases: ITA No.3830/M/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 263; 143(3); 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “C”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.2962/M/2022 Assessment Year: 2014-15 Asst. Commissioner of Income Tax, Room No.218, 2 nd Floor, Aayakar Bhavan, M.K. Road, Mumbai - 400020 Vs. M/s. Play Games 24X7 Pvt. Ltd., 301, 3 rd Floor, Palm Spring Malad Link Road, Malad (W), Mumbai – 400 064 PAN: AADCP9139P (Appellant) (Respondent) Present for: Assessee by : Shri Jeet Kamdar, A.R. Revenue by : Shri K.C. Salvamani, D.R. Date of Hearing : 18 . 01 . 2023 Date of Pronouncement : 20 . 01 . 2023 O R D E R Per : Kuldip Singh, Judicial Member: At the very outside the appellant, Asst. Commissioner of Income Tax, Mumbai (hereinafter referred to as ‘the Revenue’) by moving an application sought to condone the delay of 10 days in filing the appeal on the ground that due to some official technicalities delay occurred which is neither intentional nor malafide. Keeping in view the settled principle of law that mere bonafide delay due to some official technicalities cannot be a ground for denying the opportunity to hear any party on merits, we ITA No.2962/M/2022 M/s. Play Games 24X7 Pvt. Ltd. 2 find sufficient ground to condone the delay. So delay is condoned and appeal is ordered to be registered and heard today by the Bench. 2. The Revenue by filing the present appeal, sought to set aside the impugned order dated 12.09.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2014-15 on the grounds inter-alia that :- “1. On the facts and in the circumstances of the case, the Ld. CIT (A) is erred in deleting the disallowance of Rs.186,24,21,180/- made on account of payments made towards winning to players without appreciating the fact that that the assessee do not demonstrate the accounting of compliance of TDS of the winning payments vis-à-vis section 194B compliance. 2. On the facts and in the circumstances of the case, the Ld. CIT (A) is erred in deleting the disallowance of Rs.1,52,06,437/- made on account of non compliance of TDS on online promotional games and Chapter XVIIB of the Act without appreciating the fact that that the assessee do not demonstrate the accounting of compliance of TDS on online promotional games vis-à-vis section 194B compliance. 3. On the facts and in the circumstances of the case, the La CIT (A) is erred in deleting the disallowance of Rs.5,57,68,688/- made on account of Advertisement Expenses paid to Facebook Ireland without appreciating the fact that the said expenditure was liable to be disallowed u/s 40(a) of the IT Act since the same falls under the definition of "Royalty" and subject to TDS u/s 195 and the assessee has not deducted TDS on the same as per Explanation 2 below clause (vi) of sub section (1) of section 9 of Income Tax Act, 1961. 4. The appellant prays that the order of the Ld.CIT(A) be set aside and the order of the AO be restored. 5. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary.” 3. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : original assessment by the assessee was processed under section 143 (3) of the Income Tax ITA No.2962/M/2022 M/s. Play Games 24X7 Pvt. Ltd. 3 Act, 1961 (for short 'the Act') at the total income of Rs.13,24,54,260/-. Subsequently Ld. PCIT by invoking the revisionary jurisdiction passed the order under section 263 of the Act holding assessment order passed by the Assessing Officer (AO) as erroneous in so far as prejudicial to the interest of the Revenue and thereby set aside the same. Pursuant to the order passed by the Ld. PCIT under section 263 of the Act assessment has been framed under section 143(3) of the Act. 4. The Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the appeal filed by the Assessee. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the Revenue has come up before the Tribunal by way of filing present appeal. 5. We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto. 6. At the very outside it is brought to the notice of the Bench by the Ld. A.R. for the assessee that since order passed by the Ld. PCIT under section 263 read with section 143(3) of the Act has been set aside and issues have been remitted back to the Ld. PCIT for fresh adjudication, assessment framed thereafter under section 143 (3) of the Act read with section 263 of the Act and subsequent appeal before the Ld. CIT(A) has become infructuous and placed on record copy of order passed by the coordinate Bench of the Tribunal in case of assessee in ITA No.3830/M/2019 for ITA No.2962/M/2022 M/s. Play Games 24X7 Pvt. Ltd. 4 A.Y. 2014-15 whereby order passed by Ld. PCIT under section 263 read with section 143(3) of the Act has been set aside by returning following findings: “8. We see no reasons to take any other view of the matter than the view so taken by the coordinate bench. Respectfully following the same, we remit these two issues to the file of the learned PCIT for fresh adjudication after giving a due and reasonable opportunity of hearing to the assessee. The matter thus stands restored to the file of the learned PCIT.” 7. In the backdrop of the aforesaid undisputed facts, we are of the considered view that when the order passed under section 263 by Ld. PCIT has since been set aside by the coordinate Bench of the Tribunal vide order (supra) subsequent assessment made under section 143(3) read with section 263 by the AO and further appeal against the same before the Ld. CIT(A) has become infructuous. So finding no scope for interference in the impugned order passed by the Ld. CIT(A) present appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 20.01.2023. Sd/- Sd/- (S. RIFAUR RAHMAN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 20.01.2023. * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// ITA No.2962/M/2022 M/s. Play Games 24X7 Pvt. Ltd. 5 By Order Dy/Asstt. Registrar, ITAT, Mumbai.