MILLENNIUM TELECOM LTD., MUMBAI V. INCOME TAX OFFICER 5(2)(3),

ITA 5949/MUM/2008

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71198 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 30-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, A.M. AND SHRI AMIT SHUKL A, J.M. ./I.T.A. NO. 5949/MUM/2008 ( / ASSESSMENT YEAR: 2003-04) MILLENIUM TELECOM LTD. C/O. VED JAIN AND ASSOCIATES 33, 1 ST FLOOR, BABAR ROAD, NEAR BENGALI MARKET, NEW DELHI 110 001 / VS. CIT-V, MUMBAI ./ ! ./PAN/GIR NO. AADCM 3056D ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ' % / APPELLANT BY : SHRI VED JAIN #$ ' & % / RESPONDENT BY : SHRI PREETAM SINGH '( ) & * / DATE OF HEARING : 30.07.2013 +,- & * / DATE OF PRONOUNCEMENT : 18.09.2013 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX-5, MUMBAI (CIT(A) FOR SHORT) DATED 31.03.2008, FOR THE ASSESSMENT YEAR (A.Y.) 2003-04 PASSED U/S.263 OF THE INCOME TAX ACT , 1961 (THE ACT HEREINAFTER). 2 ITA NO.5949/MUM/2008 (A.Y. 2003-04) MILLENIUM TELECOM LTD. VS. CIT 2. AT THE VERY OUTSET, IT WAS OBSERVED THAT THE INS TANT APPEAL, FILED ON 30/09/2008, IS DELAYED BY A PERIOD OF 118 DAYS . THE SAME IS ACCOMPANIED BY AN AFFIDAVIT BY THE DI RECTOR OF THE ASSESSEE-COMPANY, ANITA SONI, DATED 19/11/20 12, AVERRING QUA THE REASON/S FOR THE SAID DELAY. THE SAME ALSO FIND MENTION IN THE CONDO NATION APPLICATION DATED 03/06/2011. HERE IT WOULD ALSO BE RELEVANT TO STATE THAT THE AS SESSEES APPEAL WAS DISMISSED IN LIMINE BY THE TRIBUNAL IN THE FIRST INSTANCE VIDE ORDER DA TED 07/09/2009 ON ACCOUNT OF NON- REPRESENTATION, AND STANDS RESTITUTED PER ORDER UND ER SECTION 254(2) IN RESPONSE TO THE ASSESSEES MISCELLANEOUS APPLICATION (IN M.A. NO. 5 96/MUM/2012). THE RECALL ORDER DATED 21/12/2012, HOWEVER, MAKES IT CLEAR THAT THE MATTER OF CONDONATION OF DELAY SHALL BE CONSIDERED BY THE BENCH HEARING THE APPEAL. THIS IS ONLY APPROPRIATE AS IT IS ONLY THE SAID BENCH WHICH IS COMPETENT TO DECIDE ON A MATTER THAT RELATES TO THE ADMISSION OF THE APPEAL. THE REASON STATED FOR THE DELAY OF NEARLY F OUR MONTHS IS THAT THE ASSESSEES OPERATING OFFICE AT MUMBAI, WHICH RECEIVED THE IMPU GNED ORDER ON 05/04/2009, DID NOT FORWARD THE SAME TO THE HEAD OFFICE (H.O.) AT NEW D ELHI, WHERE ITS TAXATION DEPARTMENT IS CENTRALIZED. THE ERROR WAS DISCOVERED ONLY SUBSE QUENTLY WHEN A TEAM OF OFFICIALS FROM THE H.O. VISITED THE MUMBAI OFFICE AND THE MATTER W AS THERE-AFTER DULY ACTED UPON. 3.1 EXPLAINING THE DELAY IN FILING THE APPEAL BY TH E ASSESSEE, A HUNDRED PERCENT SUBSIDIARY OF MAHANAGAR TELEPHONE NIGAM LIMITED (MT NL) AND, AS SUCH, A PUBLIC SECTOR UNDERTAKING (PSU), TO BE PURELY UNINTENTIONAL, IT W AS FURTHER SUBMITTED BY LD. AR, THE ASSESSEES COUNSEL, THAT THE ISSUE IN APPEAL, I.E., THE ELIGIBILITY OF THE SERVICES PROVIDED BY THE ASSESSEE-COMPANY UNDER SECTION 80IA(4)(II), IS A SUBSISTING ISSUE IN THE ASSESSEES CASE, I.E., ACROSS SEVERAL YEARS. FOR A.Y. 2004-05, THE APPEAL WAS DISMISSED BY THE TRIBUNAL (IN ITA NO. 5779/MUM/2010), THOUGH STANDS SINCE RESTORED BY IT VIDE ITS ORDER DATED 14/09/2012 (IN MA NO. 259/MUM/2012 / COPY ON RECORD). FOR A.Y. 2005-06, THE TRIBUNAL WAS PLEASED TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) TO DECIDE THE SAME AFRESH AFTER PROVIDING A REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE (IN ITA NO. 1120/MUM/2010 DATED 09/12/2011 / COPY ON RECORD). IT WOULD 3 ITA NO.5949/MUM/2008 (A.Y. 2003-04) MILLENIUM TELECOM LTD. VS. CIT THEREFORE BE IN THE INTEREST OF JUSTICE THAT THE MA TTER IS SIMILARLY SET ASIDE TO THE FILE OF THE ASSESSING AUTHORITY. 3.2 THE LD. DR, ON THE OTHER HAND, WOULD SUBMIT THA T NO CASE FOR THE CONDONATION OF NO SMALL DELAY OF ALMOST FOUR MONTHS HAS BEEN MADE OUT. THE APPEAL FOR A.Y. 2005-06 IS FOR QUANTUM PROCEEDINGS, WHILE THE PRESENT APPEAL I N THE RESPECT OF SECTION 263 PROCEEDINGS. THE LD.CIT HAS HIMSELF SET ASIDE THE M ATTER FOR BEING DECIDED AFRESH, SO THAT NO PREJUDICE IN ANY CASE STANDS CAUSED TO THE ASSES SEE. 4. WE HAVE HEARD THE PARTIES, AND PERUSED MATE RIAL ON RECORD. IN OUR VIEW, THE ASSESSEE, APART FROM STATING THE CAUSE OF THE DELAY ATTENDING THE FILING OF THE APPEAL, HAS NOT MADE OUT ANY CASE OF GOOD AND SUFFICIENT REASON/S FOR THE SAID DELAY. THE SERVICE OF THE IMPUGNED ORDER ON THE ASS ESSEE WAS AT THE LOCAL ADDRESS PROVIDED, AND COMPLETE IN ALL RESPECTS, SO THAT THE DELAY STANDS CAUSED ONLY DUE TO LACK OF PROPER COORDINATION AMONG THE DIFFERENT OFFICES OF THE ASSESSEE-COMPANY - A PURELY INTERNAL MATTER AND, FURTHER, WHICH CLEARLY SHOWS A N ABSENCE/LACK OF INSTALLATION OF PROPER PROCEDURES AND METHODS. IN FACT, WE OBSERVE SIMILAR LAPSES TO HAVE OCCURRED TIME AND AGAIN, LEADING TO THE DISMISSAL OF THE ASSESSEES M ISCELLANEOUS APPLICATION IN THE FIRST INSTANCE (IN MA NO. 320/MUM/2011 DATED 26/08/2011) AND, AGAIN, OF THE PETITION MOVED IN PURSUANCE THERETO (IN MA NO. 295/MUM/2012 DATED 21/12/2012), BESIDES OF COURSE THE APPEAL BEFORE THE TRIBUNAL FOR A.Y. 2004-05 (SUPRA) [THE ASSESSEE HAS SUBSEQUENTLY FILED A FRESH FORM-36, GIVING A DELHI ADDRESS FOR COMMUNICA TION]. AT THE SAME TIME, HOWEVER, WE FIND THAT THE ASSESSEES CASE ON MERITS; THE MATTER HAVING NOT BEING EXAMINED EVEN BY THE A.O., AND AGA IN THERE BEING NO COMPLIANCE IN THE SECTION 263, OR THE REVIEW PROCEEDINGS, HAS NOT BEE N HEARD AT ALL, I.E., AT ANY STAGE. THE TRIBUNAL, FOR A.Y. 2005-06 (COPY OF RECORD), FOUND THE MATTER TO BE OF TECHNICAL NATURE, AND WHICH BOTH THE A.O. AS WELL AS THE LD.CIT (A) H AD NO OPPORTUNITY TO CONSIDER. THE CAUSE OF SUBSTANTIAL JUSTICE WOULD THEREFORE IMPEL US TO ALLOW THE ASSESSEE AN OPPORTUNITY FOR BEING HEARD ON MERITS. THIS IS AS IN THE ABSENC E OF OUR INTERFERENCE, WHICH WOULD 4 ITA NO.5949/MUM/2008 (A.Y. 2003-04) MILLENIUM TELECOM LTD. VS. CIT RESULT ON NOT ADMITTING THE APPEAL, THE A.O. SHALL BE BOUND BY THE ORDER OF THE LD.CIT, WHO HAS PER THE IMPUGNED ORDER DIRECTED HIM TO REFR AME THE ASSESSMENT IN THE LIGHT OF THE OBSERVATIONS MADE BY HIM IN THE EARLIER PART OF THE IMPUGNED ORDER, AND WHICH CLEARLY STATE OF THE ASSESSEES SERVICES AS NOT FALLING WIT HIN THE SERVICES SPECIFIED UNDER CLAUSE (II) OF SUB-SECTION (4) OF SEC. 80-IA OF THE ACT. THIS M AY ALSO LEAD TO THE ASSESSEES ASSESSMENT FOR ONE YEAR BEING DECIDED AT VARIANCE W ITH THAT FOR THE OTHER, OR, RATHER, INCONSISTENT WITH THE FACTS OR NOT IN ACCORDANCE WI TH THE MERITS. WE, THEREFORE, CONSIDER IT TO BE FIT CASE FOR ADMISSION OF THE APPEAL. CONTINUING FURTHER, WE, HOWEVER, MAKE IT CLEAR THA T WE ARE NOT IN ANY MANNER MAKING ANY OBSERVATION TOWARD THE MERITS OF THE CAS E, WHICH THE A.O. SHALL BE AT FULL LIBERTY; RATHER, DUTY BOUND TO EXAMINE AND ADJUDICA TE IN THE SET ASIDE PROCEEDINGS. THAT IS, WE CONFIRM THE SET ASIDE OF THE ASSESSMENT UNDER RE FERENCE, AND ALSO VACATE THE OTHER DIRECTIONS BY THE LD. CIT TO ENABLE REFRAMING THE A SSESSMENT BY THE REVENUE WITH REGARD TO THE DEDUCTIBILITY IN LAW OF THE ASSESSEES CLAIM U/S. 80-IA(4)(II). THE MATTER WOULD THUS STAND TO BE DECIDED IN ACCORDANCE WITH LAW PER A SP EAKING ORDER AFTER HEARING THE ASSESSEE IN THE MATTER, DECIDING THE ISSUE UNDER REFERENCE, I.E., THE PROVISION OR OTHERWISE BY THE ASSESSEE OF THE TELECOMMUNICATION SERVICES, WHETHER BASIC OR CELLULAR, VIZ. RADIO PAGING, DOMESTIC SATELLITE SERVICES, NETWORK OF TRUNKING, B ROADBAND NETWORK AND INTERNET SERVICES, OVER THE SPECIFIED PERIOD. THE ASSESSEE HAS PROVIDE D AND, ACCORDINGLY, ITS REVENUE STREAM/S FOR THE YEAR IS FROM E-TENDERING, BESIDES CYBER CAFE SERVICES (IMPLYING ACCESS TO INTERNET FACILITY) AND SALE OF INTERNET PACKS. THE CONTROVERSY TO BE RESOLVED, AS WE SEE IT, IS THUS IF THE SAID SERVICES COULD BE SAID TO CONST ITUTE BASIC OR CELLULAR TELECOMMUNICATION SERVICES, OR DO ITS SERVICES CONSTITUTE AN APPLICA TION OF SUCH SERVICES. THE FOCUS THEREFORE AT ALL TIMES SHOULD BE ON THE SERVICES BEING PROVID ED BY THE ASSESSEE, I.E., AS DISTINCT AND IN CONTRADISTINCTION TO THE (INPUT) SERVICES UTILIZ ED BY IT IN PROVIDING ITS (OUTPUT) SERVICES. FURTHER, IF THE BASIC OR CELLULAR TELECOMMUNICATION SERVICES, EITHER AS SUCH OR IN ITS DIFFERENT FORMS, AS FOR EXAMPLE THOSE SPECIFIED IN THE PROVISION, ARE SUBJECT TO LICENSING OR OTHER REGULATORY PROCESSES, THE RELEVANT POLICY OF THE TELECOM SECTOR REGULATOR (DEPARTMENT OF TELECOMMUNICATIONS (DOT) OR THE TELE COM REGULATORY AUTHORITY 5 ITA NO.5949/MUM/2008 (A.Y. 2003-04) MILLENIUM TELECOM LTD. VS. CIT (TRAI)) COULD AGAIN BE A USEFUL GUIDE IN THE MATTER . THE ONUS TO ESTABLISH ITS CLAIM/S THOUGH SHALL BE ON THE ASSESSEE. WE DECIDE ACCORDIN GLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISPOSED OF IN THE AFORE-STATED TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 18, 2013 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER .) MUMBAI; /' DATED : 18.09.2013 ( . ' . ./ROSHANI , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 0(1 2 #'34 , * 34- , .) / DR, ITAT, MUMBAI 6. 2 56 7 ) / GUARD FILE ' / BY ORDER, ( / ') * (DY./ASSTT. REGISTRAR) , .) / ITAT, MUMBAI