NECTA TECHNOLOGY PVT LTD, CHENNAI V. ACIT, CORP, CIRCLE-4(2), CHENNAI

ITA 3555/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5071 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA IRS JCIT
• Assessee Lawyers: NITHYA SANKARAN
• Keywords: Principle of natural justice; Reasonable cause; Difference of opinion; Change of opinion; TDS
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NO. 3555/CHNY/2018 #$% &$ / ASSESSMENT YEAR : 2009-2010. NECTA TECHNOLOGY PRIVATE LIMITED, NO.100,SATHYA NAGAR, PADI, CHENNAI 600 050. [PAN AACCN 1763C] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(2) CHENNAI. ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : MS. NITHYA SANKARAN, C.A. +,'( ) * /RESPONDENT BY : MS. C. YAMUNA, IRS, JCIT. # - ) . /DATE OF HEARING : 30-04-2019 /0&% ) . /DATE OF PRONOUNCEMENT : 17-05-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, CHEN NAI (CIT(A) FOR SHORT) DATED 15.10.2018 FOR THE ASSESSMENT YEAR (AY ) 2009-10. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCE OF THE CASE TO THE EXTENT ITA NO.3555/2018 :- 2 -: PREJUDICIAL TO THE INTERESTS OF THE APPELLANT AND! IS OPPOSED TO THE PRINCIPLES OF EQUITY, NATURAL JUSTICE AND FAIR PLAY . I 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFICER IS WITHOUT JURISDICTION. 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISPOSING OFF THE APPEAL EX-PARTE. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT THE APPELLANT COULD HAVE DERIVED NO BENEFIT BY NOT APPEARING BEFORE HIM FOR THE HEARING AND THAT THE S ME COULD NOT HAVE BEEN THE INTENTION OF THE APPELLANT. 5. FOR THAT THE APPELLANT HAD REASONABLE CAUSE FOR NOT APPEARING BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WHEN THE C ASE WAS POSTED FOR HEARING BEFORE HIM. 6. FOR THAT THE REASSESSMENT AS BAD IN LAW. 7. FOR THAT THE REASSESSMENT AS COMPLETED ON THE BA SIS OF A MERE CHANGE OF OPINION. 8. FOR THAT THERE IS NO FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETI NG ITS ASSESSMENT. 9. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN UPHOLDING THE DISALLOWANCE OF RS.97,51,821 /- U/S. 40(A)(IA)/ 40(A)(I). 10. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) F AILED TO APPRECIATE THAT THE APPELLANT IS NOT LIABLE TO DEDU CT TAX AT SOURCE ON PAYMENTS MADE TO M/S.SINGAPORE TELECOMMU- ICATIONS LIMITED , SINGAPORE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY NECTA TECHNOLOGY PRIVATE LIMI TED IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE CO MPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF PROVIDING BPO SERVICES TO DOMESTIC AS WELL AS OVERSEAS CUSTOMERS. THE RETURN OF INCOME FOR THE AY 2009-10 WAS FILED ON 29.09.2009 DISCLOSING TOT AL INCOME OF RS. 34,23,989/- AFTER CLAIMING EXEMPTION U/S.10A OF TH E INCOME TAX ACT, 1961 (IN SHORT THE ACT) TO THE TUNE OF RS.24,14 ,962/-. AGAINST THE ITA NO.3555/2018 :- 3 -: SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-4(2), CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 21.12.20 16 ACCEPTING RETURNED INCOME PASSED U/S. 143(3) R.W.S. 147 OF T HE ACT. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED BY ISSUI NG NOTICE U/S.148 OF THE ACT ON 01.01.2016. AFTER RECEIPT OF NOTICE, ASSESSEE SUBMITTED THAT ORIGINAL RETURN OF INCOME FILED MAY BE TREATE D IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. SUBSEQUENTLY, ASS ESSMENT WAS COMPLETED BY THE ASSESSING OFFICER BY DISALLOWING LEASED CIRCUIT AND VOICE DELIVERY CHARGES OF RS.97,51,821/- PAID TO M/S.SINGAPORE TELECOMMUNICATIONS LTD (SING TEL) SINGAPORE ON THE GROUND THAT TDS WAS NOT DEDUCTED AT SOURCE. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED THE ACT ION OF THE ASSESSING OFFICER (AO). 5. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. IT WAS CONTENDED THAT LD. COMMISS IONER OF INCOME TAX (APPEALS) PASSED EX-PARTE ORDER WITHOUT GIVING SUFFICIENT AND REASONABLE OPPORTUNITY TO REPRESENT THE MATTER AND THEREFORE THE MATTER MAY BE SENT BACK TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH ADJUDICATION. ITA NO.3555/2018 :- 4 -: 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE HAS NOT RAISED SERIOUS OBJECTION. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. FROM THE PERUSAL OF THE ORDER OF THE LD.CI T(A), IT IS APPARENT THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD G IVEN SUFFICIENT OPPORTUNITIES, DESPITE DUE SERVICE OF NOTICE, NOBOD Y HAS APPEARED. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) H AD NOT PASSED THE ORDER ON MERITS. THEREFORE WE REMIT BACK THI S MATTER TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER AFFORDING DUE OPPORTUN ITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 17TH DAY OF MAY, 2019, AT CHEN NAI. SD/- SD/- ( . ! ) (DUVVURU RL REDDY) ' # /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED: 17TH MAY, 2019. KV 3 ) +.4 5' !6 5&. / COPY TO: 1 . !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF