Spectris Technologies Pvt. Ltd., Gurgaon V. DCIT, New Delhi

ITA 57/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3474 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: ANMOL SINGH
• Keywords: Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AN D SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.57/DEL./2017, A.Y. 2007-08 SPECTRIS TECHNOLOGIES PVT. LTD. VS. DCIT UNIT NO. P701-705, 7 TH FLOOR, CIRCLE-9(1) BLOCK C, JMD MEGAPOLIS, SOHNA ROAD, NEW DELHI SECTOR-48, GURGAON PAN : AAGCS6654R (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ANMOL SINGH, CA REVENUE BY : SHRI S.S.RANA, CIT(DR) DATE OF HEARING : 27.11.2019 DATE OF ORDER : 29 .11.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT SPECTRIS TECHNOLOGIES PVT. LTD ., GURGAON (HEREINAFTER REFERRED TO AS 'THE ASSESSEE) BY FILI NG THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 14/10/2016 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-3 8, NEW DELHI QUA THE ASSESSMENT YEAR 2007-08 ON THE GROU NDS INTER ALIA THAT : ITA NO. 57/DEL./2017 2 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-38 NEW DELHI (LD. CIT(A)) IS BAD IN LAW AND VOID AB INITIO. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN UPHOLDING THE LEVY OF PENALTY O F RS. 55,83,858 WITHOUT GRANTING ADEQUATE OPPORTUNITY OF BEING HEAR D. 3. THAT THE LD. CIT(A) FAILED TO ACKNOWLEDGE THAT THE APPELLANT HAD AVAILED OF THE SERVICES OF TAX-CONSULTANT (CON SULTANT) IN MAKING REPRESENTATION BEFORE THE LD. CIT(A). THE SAID CONS ULTANT APPEARED BEFORE THE LD. CIT(A) AND SOUGHT ADJOURNMENTS. THE APPELLANT WAS NOT EVEN AWARE THAT THE CONSULTANT HAD NOT APPEARED BEFORE THE LD. CIT(A) ON DUE DATE OF HEARING WHICH LEAD TO EX-PART E ADJUDICATION OF THE CASE. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN U PHOLDING THE LEVY OF PENALTY U/S 271(L)(C) OF THE ACT ON THE ADDITION OF RS. 1,80,70,738 ON ACCOUNT OF TRANSFER PRICING ADJUSTMENTS MADE IN THE ASSESSMENT ORDER U/S 143(3) DATED 03-02-2011 WITHOUT APPRECIAT ING THAT THE SAID ADDITION IS CONTRARY TO LAW AND FACTS. 5. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDI NG THE LEVY OF PENALTY WITHOUT APPRECIATING THAT THE INTER NATIONAL TRANSACTIONS IN RESPECT OF WHICH PENALTY HAS BEEN L EVIED ON THE APPELLANT WERE CARRIED OUT BY THE APPELLANT IN GOOD FAITH AND AFTER EXERCISING DUE DILIGENCE. THE ELEMENT OF MENS REA WHICH IS A SINE QUA NON FOR LEVYING PENALTY FOR CONCEALMENT OF INCOME IS A BSENCE IN THE PRESENT CASE. 6. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN U PHOLDING THE LEVY PENALTY OF RS. 55,83,858 WITHOUT APPRECIATING THAT THE ARMS LENGTH MARGIN OF THE SUBJECT INTERNATIONAL TRANSACTIONS WA S DETERMINED BY A QUALIFIED EXPERT AND THEREFORE THE ALLEGATION THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS IS NOT CORRECT AND HENCE NO PENALTY IS WARRANTED IN THE PRESENT CASE. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING L EVY OF PENALTY OF RS. 55,83,858 WITHOUT APPRECIATING THAT THE LD. ASS ESSING OFFICER HAD NOT RECORDED MANDATORY SATISFACTION 44 AS PER LAW. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE UPHOLDING OF LEVY OF PENALTY OF RS. 55,83,858 IS CO NTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DE LETE, RESCIND, FORGO OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEA L EITHER BEFORE OR DURING THE COURSE OF PROCEEDINGS IN THE INTEREST OF THE NATURAL JUSTICE. ITA NO. 57/DEL./2017 3 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE IS INTO THE BUSINESS OF MARKETING INSTALLATION AND AFTER SALES SUPPORT SERV ICES OF X-RAY ANALYTICAL EQUIPMENTS AND ACCESSORIES AND TRADING I N RELATED SPARE PARTS. ON THE BASIS OF ASSESSMENT FRAMED U/S 143(3) READ WITH SECTION 144(C) BY MAKING ADDITION OF RS. 1,80, 70,738/- ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT FOR INTERNAT IONAL TRANSACTIONS, PENALTY PROCEEDINGS HAVE BEEN INITIATED U/S 271(1)( C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ASSESS ING OFFICER LEVIED PENALTY TO THE TUNE OF RS. 55,83,858/- @ 100 % OF THE TAX EVADED FOR FURNISHING INACCURATE PARTICULARS OF INC OME EX PARTE. 3. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WH O HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEE LING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. DR, GONE THROUGH THE DOCUM ENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHOR ITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CAS E. 5. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY LD. CIT(A) GOES TO PROVE THAT APPEAL HAS BEEN DECIDED BY LD. C IT(A) EX PARTE ON FAILURE OF THE ASSESSEE TO APPEAR AFTER SEEKING ADJOURNMENT ON ITA NO. 57/DEL./2017 4 29.03.2016. HOWEVER, KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE PENALTY HAS BEEN LEVIED IN THI S CASE ON THE BASIS OF ADDITION MADE ON ACCOUNT OF TRANSFER PRICING ADJ USTMENT WHICH IS BASED UPON TRANSFER PRICING ANALYSIS OF THE TAXP AYER, WHICH MAY DIFFER FROM THE TRANSFER PRICING ANALYSIS OF TRANSF ER PRICING OFFICER, ASSESSEE IS ENTITLED FOR OPPORTUNITY OF BEARING HEA RD. BOTH THE AUTHORISED REPRESENTATIVE OF PARTIES TO THE APPEAL HAVE ALSO AGREED TO THE PROPOSITION THAT THE ISSUE BE SET ASIDE TO L D. CIT(A) TO DECIDE AFRESH IN THE INTEREST OF JUSTICE. 6. SINCE THE APPEAL HAS BEEN DECIDED BY LD. CIT(A) EX PARTE WITHOUT HEARING THE ASSESSEE, WE ARE OF THE CONSIDE RED VIEW THAT THE MATTER IS REQUIRED TO BE SET ASIDE, TO THE LD. CIT( A) TO DECIDE AFRESH AFTER PROVIDING OPPORTUNITY OF BEING HEARD T O THE ASSESSEE . CONSEQUENTLY, APPEAL FILED BY THE ASSESSEE IS HEREB Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH NOVEMBER, 2019. SD/- SD/- (R.K.PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER D ATED : 29/11/ 2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ITA NO. 57/DEL./2017 5 4. CIT(A)-38, NEW DELHI. 5. CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI DATE OF DICTATION 28.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 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 DISPATCH OF THE ORDER