M/s Neobyte Software Solutions Pvt Ltd , Bangalore V. Deputy Commissioner of Income Tax Circle-5(1)(1), Bangalore

ITA 3281/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8751 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V CHANDRASHEKAR SHRI PRIY
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO . 3281 /BANG/201 8 ASSESSMENT YEAR : 20 13 - 14 M/S. NEOBYTE SOFTWARE SOLUTIONS PVT. LTD., 2 ND FLOOR, BMTC COMPLEX, 80 FEET ROAD, KORAMANGALA, BANGALORE 560 078. PAN : AACCN 5027 F VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 5(1)(1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. CHANDRASHEKAR, ADVOCATE REVENUE BY : SHRI. PRIYADARSHINI MISHRA, JCIT DATE OF HEARING : 1 3 . 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 EX-PARTE ORDER OF CIT(A)-5, BANGALORE, DATED 13.03.2018 FOR ASSESSMENT YEAR 2013-14. 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 SERVICES, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 ON 30.11.2013 DECLARING A TOTAL INCOME OF RS.9,01,76,380/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT ITA NO. 3281/BANG/2018 PAGE 2 OF 8 WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 18.01.2016, WHEREIN THE ASSESSEES INCOME DETERMINED AT RS.9,24,02,180/- IN VIEW OF THE FOLLOWING ADDITIONS / DELETIONS:- (I) ADVANCES WRITTEN OFF - RS. 14,50,000/- (II) DISALLOWANCE UNDER SECTION 14A R.W.R.8D(2)(III) RS. 7,75,000/- 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 18.01.2016 FOR ASSESSMENT YEAR 2013-14, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-5, BANGALORE. THE CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 13.03.2018 FOR NON-PROSECUTION FOLLOWING THE DECISION OF THE ITAT, DELHI BENCH, IN THE CASE OF MULTIPLAN (INDIA) LTD., 38 ITD 320 (ITAT-DELHI). 3. THE ASSESSEE, BEING AGGRIEVED BY THE EX-PARTE ORDER OF THE CIT(A)-5, BANGALORE, DATED 13.03.2018 HAS PREFERRED THIS APPEAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS: ITA NO. 3281/BANG/2018 PAGE 3 OF 8 ITA NO. 3281/BANG/2018 PAGE 4 OF 8 ITA NO. 3281/BANG/2018 PAGE 5 OF 8 4. GROUND NOS. 1,2, 4 AND 5 4.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE CONTENDS THAT THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) DISMISSING THE ASSESSEES APPEAL, IN LIMINE, FOR NON-PROSECUTION WAS PASSED IN HASTE AND WITHOUT CONSIDERING THE ASSESSEES APPEAL ON MERITS. ACCORDING TO THE LEARNED AR, THE IMPUGNED ORDER OF CIT(A) INDICATES THAT HE AFFORDED ITA NO. 3281/BANG/2018 PAGE 6 OF 8 THE ASSESSEE ONLY ONE HEARING ON 12.03.2018 VIDE NOTICE DATED 19.02.2018 AND THE ASSESSEE CLAIMS THAT IT HAS NOT RECEIVED THE SAID NOTICE. IT IS SUBMITTED THAT IN THESE CIRCUMSTANCES, THE ASSESSEES NOT ATTENDING THE ONLY HEARING BEFORE THE CIT(A) ON 12.03.2018 DUE TO NON-RECEIPT OF NOTICE WAS DUE TO REASONS BEYOND ITS CONTROL; WHICH CONSTITUTED REASONABLE CAUSE FOR NON-APPEARANCE. IT IS FURTHER SUBMITTED THAT THE ULTIMATE OBJECT OF ASSESSMENT IS THAT THE CORRECT INCOME OF AN ASSESSEE IS BROUGHT TO TAX AND IN THIS CONTEXT, IT IS PRAYED BY THE ASSESSEE THAT THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) BE SET ASIDE AND THE MATTERS RESTORED TO THE FILE OF CIT(A) FOR HEARING AND ADJUDICATION OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS. 4.2 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4.3.1 I HAVE HEARD AND CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS PUT FORTH BY BOTH LEARNED DR FOR REVENUE AND THE LEARNED AR OF THE ASSESSEE. A PERUSAL OF THE IMPUGNED ORDER CONFIRMS THE FACT THAT THE CIT(A) DISMISSED THE ASSESSEES APPEAL EX-PARTE FOR NON-PROSECUTION FOLLOWING, INTER ALIA, THE DECISION OF THE DELHI BENCH OF ITAT IN THE CASE OF MULTIPLAN (INDIA) LTD., (38 ITD 320) (DEL.). IT IS SEEN FROM THE IMPUGNED ORDER THAT THE CIT(A) CLEARLY STATES THAT HE FIXED HEARING ONLY ON 12.03.2018; NOTICE FOR WHICH ACCORDING TO THE ASSESSEE WAS NOT RECEIVED. IT WAS PLEADED THAT THE NON-APPEARANCE BY ASSESSEE ON 12.03.2018 WAS NEITHER DELIBERATE NOR INTENTIONAL, BUT WAS FOR CAUSES BEYOND ITS CONTROL; I.E., NON-RECEIPT OF HEARING NOTICE DATED 19.02.2018 AND CONSTITUTED REASONABLE CAUSE. IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE INCLINED TO CONCUR WITH THIS PLEA OF ASSESSEE, AS IT IS HIGHLY UNLIKELY THAT THE ASSESSEE WOULD INTENTIONALLY OR DELIBERATELY NOT ATTEND THE HEARING ON 12.03.2018 BEFORE THE CIT(A); AS THIS WOULD CAUSE IMMENSE HARM TO ITS OWN INTERESTS. BEFORE US, REVENUE WAS NOT ABLE TO CONTROVERT THE ASSESSEES CONTENTION THAT THE NOTICE DATED 19.02.2018 FIXING THE HEARING ON 12.03.2018 WAS NOT RECEIVED BY THE ASSESSEE. ADMITTEDLY, THE ASSESSEES APPEAL HAS NOT BEEN DISPOSED OFF BY ADJUDICATION ITA NO. 3281/BANG/2018 PAGE 7 OF 8 ON MERITS OF THE ISSUES RAISED BEFORE THE CIT(A). SINCE THE ULTIMATE AIM OF THE ASSESSMENT IS THAT ONLY THE CORRECT TAXES DUE BY THE ASSESSEE BE COLLECTED BY REVENUE, IN MY VIEW, IT IS IMPERATIVE THAT THE ASSESSEES APPEAL BEFORE THE CIT(A) BE HEARD AND DISPOSED OFF ON MERITS. 4.3.2 IN THIS VIEW OF THE MATTER, I AM OF THE CONSIDERED OPINION THAT THE INTEREST OF SUBSTANTIAL JUSTICE WILL BE WELL SERVED IF THE IMPUGNED ORDER OF THE CIT(A) DATED 13.03.2018 FOR ASSESSMENT YEAR 2013-14 BE SET ASIDE. I, THEREFORE, SET ASIDE THE AFORESAID IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR FRESH HEARINGS, EXAMINATION AND ADJUDICATION OF THE ISSUES RAISED BY THE ASSESSEE IN THE APPEAL BEFORE HIM. NEEDLESS TO ADD, THE CIT(A) SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED, WHICH SHALL BE DULY CONSIDERED BEFORE DECIDING THE ISSUES. IT IS ACCORDINGLY ORDERED. 5. IN VIEW OF THE ABOVE, I REFRAIN FROM COMMENTING ON OR ADJUDICATING THE ISSUES RAISED ON TECHNICAL ISSUES/MERITS IN GROUNDS AT NOS. 3 AND 6 TO 21 OF THIS APPEAL. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF APRIL, 2019. SD/- SD / - SD/ - (N. V. VASUDEVAN) VICE PRESIDENT (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 3 RD APRIL, 2019. /NS/* ITA NO. 3281/BANG/2018 PAGE 8 OF 8 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.