AWP ASSISTANCE (INDIA) PVT. LTD., GURGAON V. DCIT, CIRCLE- 1(1), GURGAON

ITA 5128/DEL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9087 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 27-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR; MANAGEMENT FINANCE TEAM
• Keywords: Opportunity of being heard; TDS; Set aside
• Section: 143(1); 201; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI FRIDAY BENCH A : NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI G.S. PANNU , VICE PRESIDENT AND SHRI K.N ARASIMHA CHARY , JUDICIAL MEMBER ITA NO. 5128 / DEL/20 18 ASSESSMENT YEAR : 201 6 - 1 7 AWP ASSISTANCE (I NDI A) PVT. LTD., GURGAON 1 ST FLOOR, DLF SQUARE, M - BLOCK, JACARANDA MARG, DLF CITY, PHASE - II, GURGAON 122002 (P AN: AAFCM1460J) VS. DCIT, CIRCLE 1(1), GURGAON (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S ALIL KAPOOR, ADV. RESPONDENT BY : SH. SARAS KUMAR, SR. DR. DATE OF HEARING : 07 .0 8 .2020 DATE OF PRONOUNCEMENT : 07 .0 8 .2020 ORDER PER K.N ARASIMHA CHARY, JM : AGGRIEVED BY THE ORDER DATED 28 / 5 /20 1 8 IN APPEAL NO. 434/17 - 18 (AY 2016 - 17) PASSED BY THE LD . CO MMISSIONER OF INCOME TAX (APPEALS) - 1 , GURGAON [ LD. CIT(A) ] FOR THE ASSESSMENT YEAR 201 6 - 1 7 IN THE CASE OF M /S AWP ASSISTANCE (INDIA) PVT. LTD. (THE ASSESSEE ), THIS APPEAL IS PREFERRED BY THE ASSESSEE. 2. BRIEF LY STATED FACTS OF THE CASE ARE THAT IN THE BUSINESS OF THE ASSESSEE CERTA IN PAYMENT S FOR A SERVICE ARE RECEIVED IN ADVANCE FOR THE TOTAL SERVICE PERIOD . ONLY SUCH PORTION OF INCOME WHICH PERTAINS TO A ITA NO. 5128/ DEL/20 18 2 PARTICULAR YEAR IS RECOGNIZED ALONG WITH CORRESPONDING TD S; AND THAT THE BALANCE AMOUNT IS SHO WN AS D EFERRED R EVENUE ON THE LIABILITY SIDE OF THE BALANCE SHEET. FOR THE ASSESSMENT YEAR 2015 - 16 THE APPELLANT HAD CARRIED FORWARD THE AMOUNT OF RS. 1, 56,74,596/ - OF TDS WHICH PERTAIN ED TO SUBSEQUENT YEARS AND THE TDS FOR THE ASSESSMEN T YEAR 201 5 - 16 WAS NOT ALLOWED. ASSESSE E THEREFORE FILED AN APPEAL BEFORE THE LD. CIT(A), SINCE THE TDS WAS NOT ALLOWED AS BROUGHT FORWARD IN THE INCOME TAX RETURN OF AY 2016 - 17. ON RECEIPT OF INTIMATION UNDER SECTION 143 (1) OF THE I.T. ACT FOR THE ASSE SSMENT YEA R 20 16 - 17, THE ASSESSEE DID NOT REALIZE THE FACT THAT THE CORRESPONDING TDS BROUGHT FORWARD FROM ASSESSMENT YEAR 2015 - 16 TO THE INCOME OF ASSESSMENT YEAR 2016 - 17 WAS REJECTED BY THE REVENUE AUTHORITIES. BUT UPON INTERNAL REVENUE BY M ANAGEMENT / FINANCE TE AM , IT WAS REALIZED THAT AN APPEAL SHOULD ALSO HAVE BEEN FILED FOR THE ASSESSMENT YEAR 2016 - 17 AND THEREFORE, SUCH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WITH DELAY. 3. LD. CIT(A), HOWEVER, DID NOT IMPRESS WITH THE PLEA TAKEN BY THE AS SESSEE THAT IT IS ONL Y ON SUBSEQUENT REALIZATION OF THE FACT THAT THE REVENUE REJECTED THE CORRESPONDING TDS BROUGHT FORWARD FROM THE ASSESSMENT YEAR 2015 - 16 TO THE INCOME OF ASSESSMENT YEAR 2016 - 17, THE APPEAL WAS FILED WITH DELAY AND ACCORDING TO THE LD. CIT(A) SUCH CAUS E DO ES NOT CONSTITUTE SUFFICIENT CAUSE TO CONDONE THE DELAY. 4. SUBMISSIONS OF LD. AR BEFORE US ARE TWOFOLD. FIRSTLY , HE SUBMITTED THAT THE LEARNED CIT(A) FAILED TO APPRECIATE THE REASONS GIVEN BY THE ASSESSEE TO FILE OF THE APPEAL WITH THE DELAY IN THEI R PR OPER PERSPECTIVE AND IT RESULTED IN MISCARRIAGE OF JUSTICE IN THE FORM OF DISMISSAL OF THE APPEAL BY THE LEARNED CIT(A). SECONDLY, HE SUBMITTED THAT WHEN THE ITA NO. 5128/ DEL/20 18 3 ASSESSEE HAD ALREADY OFFERED THE CORRESPONDING INCOME TO TAX, THE DISALLOWANCE OF THE CREDIT OF T AX DEDUCTED SOURCE (TDS) TO THE TUNE OF 94, 64, 792/ - IS NOT IN CONSONANCE WITH THE LAW UNDER SECTION 199 OF THE INCOME TAX ACT, 1961 ( THE ACT ) READ WITH RULE 37 BA OF THE INCOME TAX RULES, 1962 ( THE RULES) . HOWEVER, NO REASONS ARE INCORPORATED IN THE INTIMATION ISSUED UNDER SECTION 143(1) OF THE ACT AND THE ASSESSEE NEVER KNEW THE REASONS WHY SUCH A DISALLOWANCE OF THE TDS HAD TAKEN PLACE. LD. AR SUBMITTED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE EITHER BEFORE OR AFTER THE PROCESS OF THE MATT ER U NDER SECTION 143(1) OF THE ACT AND EQUALLY THE ASSESSEE HAD NO CHANCE OF AGITATING THE MERITS OF THE CASE BEFORE THE LD. CIT(A) BECAUSE OF THE REFUSAL OF THE LD. CIT(A) TO CONDONE THE DELAY. IN THE CIRCUMSTANCES, LD. AR SUBMITTED THAT IF THE IMPUGNED ORDE RS ARE NOT QUASHED, THE ASSESSEE WOULD GO WITHOUT ANY REMEDY AND A MERITORIOUS CASE BE THROWN OUT WITHOUT AFFORDING AN OPPORTUNITY TO THE PARTY WHO SUFFERS. 5. LD. DR SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(A) BY ADVERTING TO THE REASONS RECORDED B Y HI M TO REFUSE TO CONDONE THE DELAY. HE SUBMITTED THAT THE PROCESS AT THE STAGE OF INTIMATION AND SECTION 143(1 ) OF THE ACT IS DONE BY AUTOMATIC PROCESS BY THE CENTRALIZED PROCESSING CENTRE , BANGALORE AND IS OPEN FOR THE ASSESSEE TO VENTILATE THE GRIEVAN CE B Y WAY OF PROP ERLY CONSTITUTED PROCEEDINGS EITHER BEFORE THE LEARNED ASSESSING OFFICER OR BEFORE THE LD. CIT(A) AND BY PREFERRING THE APPEAL WITH THE DELAY, THE ASSESSEE HAS TO OWN UP THE RESPONSIBILITY AND FOR THAT THE ASSESSEE CANNOT BLAME THE AU THORITIES WHO A RE BOUND TO FOLLOW THE LAW. 6. WE HAVE GONE THROUGH THE RECORD, IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. INSOFAR AS THE ASPECT OF DELAY IN PR EFERRING THE ITA NO. 5128/ DEL/20 18 4 APPEAL BEFORE THE LD. CIT(A) IS CONCERNED, LD. CIT(A) RECORDED A FINDING THAT THE D ELAY IN REALIZATION OF THE NEED OF APPEAL BY THE ASSESSEE, BY ITSELF, DOES NOT CONSTITUTE SUFFICIENT CAUSE AND IT CLEARLY SHOWS THE WANT OF DUE CARE AND CAUTION ON THE PART OF THE ASSESSEE. HE, THEREFORE, DECL INED TO CONDONE THE DELAY. HOWEVER, THE SAME T IME, I T IS NOT A CASE OF THE REVENUE THAT THERE ARE ANY MALA FIDE S ON THE PART OF THE ASSESSEE IN PREFERRING THE APPEAL WITH ANY DELAY. OBVIOUSLY, ASSESSEE DOES NOT STAND TO GAIN BY PREFERRING THE APPEAL WITH DELAY. WHEN THE TECHNICALITIES ARE PITTED AG AINST THE SUBSTANTIAL JUSTICE, THE FORMER MUST GIVE WAY TO THE LATTER. THERE IS NO REASON NOT TO ACCEPT THE EXPL ANATION OFFERED BY THE ASSESSEE THAT IT IS ONLY DUE TO BONA FIDE MISTAKEN IMPRESSION THE DELAY OCCURRED IN PREFERRING THE APPEAL. REVENUE DOES NOT PLEAD ANY RIGHTS TO HAVE BEEN CRYSTALLIZED DUE TO EFFLUX OF TIME. BY CONDONING THE DELAY, THE HIGHEST THAT WOULD HAPPEN IS THAT A CAUSE COULD BE DECIDED ON MERITS, WHICH WOULD GO IN THE INTEREST OF JUSTICE. WITH THIS VIEW OF THE MATTER, WE ARE OF TH E CONSIDERED OPINION THAT THE DELAY IN PREFERRING THE APPEAL COULD HAVE BEEN CONDONE D . WE , THEREFORE, FIND IT DIFFICULT TO SUSTAIN TH E I MPUG NED ORDER OF THE LD. CIT(A) . 7. INSOFAR AS THE GRIEVANCE OF THE ASSESSEE , BASING ON THE FACT THAT NO REASONS ARE AS SIGNED FOR A DISALLOWANCE OF THE TDS IS CONCERNED, HAVING GONE THROUGH THE INTIMATION UNDER SECTION 143(1) OF THE ACT, WE FIND THAT SUCH AN INTIMATION DOES NOT CONTAIN ANY REASONS FOR DISALLOWI NG THE CREDIT OF TDS . AS A MATTER OF FACT, SUCH INTIMATION IS O NLY A MATTER OF INFORMATION GENERATED IN A PRO FORMA BY THE CENTRALIZED PROCESSING CENTRE , BANGALORE. THIS INTIMATION , N OT ONLY DOES NOT SPEAK OF THE REASONS FOR THE IMPUGNED DISALLOWANCE, IT ALSO DOES NOT APPEAR TO BE THE RESULT OF ANY DUE EXAMINATION OF THE ISSUE BY THE LEARNED ASSESSING OFFICER. FOR WANT OF ITA NO. 5128/ DEL/20 18 5 REASONS BY WAY OF SPEAKING ORDER, NOT ONLY THE ASSESSEE DOES NOT KNOW THE REASO N FOR DISALLOWANCE , BUT AT THE SAME TIME WE A RE ALSO UNABLE TO APPRECIATE THE LEGALITY OTHERWISE OF SUCH AN ACT OF DISA LLOWANCE. IT IS ONLY REASONS THAT INFUSE LIFE IN TO THE ACTION OF ANY PUBLIC AUTHORITY , AND SUCH RE ASONS ALLOW THE HIGHER FORUMS TO APPRE CIATE THE LEGAL SUSTAINABILITY OF SUCH AN ACTION, WITHOUT WHICH NOT ONLY THE PARTY AFFECTED BY SUCH AN ACTION SUFFERS, BUT THE HIGHER FORUMS WOULD BE HANDICAPPED EITHER TO CONFIRM OR TO SET IT ASIDE. IT IS, THE REFORE, CLEAR THAT THE IMPUGNED ACTION OF DIS ALLOWANCE OF THE CREDIT OF TDS IS UNSUSTAINABLE , I N THE MANNER IT IS PRESENT LY MANIFESTED IN THE IMPUGNED ORDER. 8 . IN VIEW OF OUR FINDING THAT THE IMPUGNED DISALLOWANCE OF CREDIT OF TDS UNDER INTIMATION UNDER SECTION 143(1) OF THE ACT SUFFERS LEGAL IRREGULARITY AND CANNOT BE SUSTAINED AS IT IS, IT GOES WITHOUT SAYING THAT THE MATTER REQUIRES RECONSIDERATION BY THE LEARNED ASSESSING OFFICER TO PASS A SPEAKING ORDER WITH THE REASONS. U NDER THE CI RCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDERS AND REMAND THE ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DISPOSAL, ACCORDING TO LAW BY WAY OF SPEAKING ORDER, AFTER AFFORD ING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9 . IN THE R ESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. A BOVE D ECISION WAS PRONO UNCED ON 7 TH DAY OF AUGUST , 2020 . SD/ - SD/ - ( G.S. PANNU) ( K.N ARASIMHA CHARY ) VICE PRESIDENT JUDICIAL MEMBER 07/08/2020 /SRB ITA NO. 5128/ DEL/20 18 6 COPY FORWARDED TO: - 1. APPELLANT 2 . RESPONDENT : 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR ORDER DICTATED ON : 7. 8. 2020 D ATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7. 8. 2020 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 7.8 .20 DATE ON WHICH FAIR ORDER SENT TO MEMBER FOR SIGNATURE 7.8.20 DATE ON WHICH THE FAIR ORDER COMES BACK AFTER PRONOUNC EMENT TO THE SR. PS/PS. DATE OF UPLOADING ORDER .. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DESPATCH OF THE ORDER ..