MODEPRO INDIA P. LTD, MUMBAI V. DCIT 10(2), MUMBAI

ITA 6495/MUM/2011

• Counselvise Citation: 649519914 RSA 2011
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 29-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEERAJA PRADHAN
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Permanent establishment; Reasonable cause
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L BENCHE MUMBAI . . , , BEFORE S/SH. I.P.BANSAL, JUDICIAL MEMBER & RAJENDRA , ACCOUNTANT MEMBER /. ITA NO.6495/MUM/2011, / ASSESSMENT YEAR-2008-09 MODEPRO INDIA PVT. LTD. 409, BEZZOLA COMPLEX, SION-TROMBAY ROAD, CHEMBUR MUMBAI-400071 VS DCIT 10(2) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 PAN:AAACM5846P ( ! / APPELLANT) ( '# ! / RESPONDENT) $% & ' / ASSESSEE BY : SHRI SUBODH RATNAPARKHI & ' / REVENUE BY :SMT. NEERAJA PRADHAN & && & %) %) %) %) / DATE OF HEARING : 13-03-2014 *+ & %) / DATE OF PRONOUNCEMENT : 13-03-2014 , 1961 & && & 254 )1( %,% %,% %,% %,% - - - - ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DATED 04.07.2011 OF THE CIT(A )-22,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.THE LD.CIT (APPEALS) ERRED IN DECIDING THE APPEA L EX-PARTE WHEN THE COUNSEL FOR THE APPELLANT COULD NOT ATTEND THE APPEAL HEARING FIXED ON 30.06. 2011, DUE TO A REASONABLE CAUSE BEING HIS SUDDEN ILL HEALTH, THEREBY DENYING YOUR APPELLANT A NY FURTHER OPPORTUNITY TO ATTEND AND ARGUE THE APPEAL AND PRODUCE DOCUMENTS IN SUPPORT OF ITS CONT ENTIONS. 2.THE LD CIT (APPEALS) ERRED IN CONFIRMING THE ADDI TION OF RS. 12,67,194/- U/S 40(A)(I) OF THE I.T. ACT 1961 NOT APPRECIATING THE FACT THAT (I).THE AMOUNTS PAID TO NON-RESIDENTS WAS NOT CHAR GEABLE TO TAX IN INDIAAND ACCORDINGLY APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON SUCH PAYMENTS U/S XVII - B OF THE I.T.ACT 1961. (II).THAT A SUM OF RS. 1,64,474/- WAS EXPENDED TOWA RDS REIMBURSEMENT OF CLEARING AND FORWARDING CHARGES TO A NON-RESIDENT AND DID NOT AT TRACT THE PROVISIONS OF TAX DEDUCTION AT SOURCE AS PROVIDED U/C XVII - B OF THE I.T. ACT 196 1. (III).THAT THE CONCERNED PAYMENTS WERE MADE TO PERS ONS WHO WERE RESIDENTS OF REPUBLIC OF ITALY AND THE FEDERAL REPUBLIC OF GERMANY AND DID N OT HAVE ANY PERMANENT ESTABLISHMENTS IN INDIA AND ACCORDINGLY AS PER THE DOUBLE TAXATION AVOIDANCE AGREEMENTS WITH THOSE COUNTRIES, THE CONCERNED INCO ME OF THE NON-RESIDENTS WAS NOT CHARGEABLE TO TAX IN INDIA AND ACCORDINGLY THE DISA LLOWANCE U/S 40(A)(I) WAS NOT WARRANTED. 3.THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A ND/OR VARY ANY OF THE ABOVE GROUNDS OF APPEAL. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF MANUFAC TURING OF PHARMACEUTICAL PRODUCTS,FILED ITS RETURN OF INCOME ON 26.09.2008 DECLARING TOTAL INCOME OF RS.3.50 CRORES.ASSESSING OFFICER (AO),FINALISED THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT,ON 02.12.2010,DETERMINING THE INCOME 2 ITA NOS. 6495/MUM/2011 MODEPRO INDIA PVT. LTD. OF THE ASSESSEE AT RS.3.40CRORES.ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AS PER THE FAA THE MATTER WAS FIXED FOR HEARI NG ON SEVERAL OCCASIONS 14.02.2011, 28.02.2011, 22.03.2011, 11.04.2011, 25.05.2011, 02. 06.2011, 20.06.2011 AND 30.06.2011,THAT ON 30.06.2011 NOBODY APPEARED BEFORE HIM NOR ANY COMMU NICATION WAS SENT BY THE ASSESSEE TILL 4 TH JULY 2011.HE DECIDED THE APPEAL AGAINST THE ASSESSE E ON THE BASIS OF FACTS AND MATERIAL AVAILABLE BEFORE HIM. 3. DURING THE COURSE OF HEARING BEFORE US,AUTHORISED R EPRESENTATIVE(AR)SUBMITTED THAT CHARTERED ACCOUNTANT (CA) REPRESENTING THE ASSESSEE SUDDENLY FELL ILL ON 30.06.2011, THAT HE WAS RESIDENT OF THANE, THAT BECAUSE OF VIRAL FEVER HE COULD NOT TRA VEL TO MUMBAI TO ATTEND APPEAL HEARING BEFORE THE FAA, THAT HE COULD NOT INFORM THE ASSESSEE TO S EEK ADJOURNMENT.AR REFERRED TO THE AFFIDAVIT FILED BY THE BIKRAM V. BHATE, C.A. OF THE ASSESSEE AND THE MEDICAL CERTIFICATE ISSUED BY FAMILY PHYSICIAN OF THE C.A. HE FURTHER SUBMITTED THAT ISS UE WAS COVERED BY THE ORDERS OF THE TRIBUNAL, THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE FAA. DEPARTMENTAL REPRESENTATIVE(DR) SUBMITTED THAT ASSESSEE DID NOT APPEAR BEFORE THE,F AA THOUGH SO MANY ADJOURNMENTS WERE GRANTED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT FAA HAD ADJOURNED THE MATTER FROM FEBRUARY 2011 TO JUNE 201 1 AS PER REQUESTS MADE BY THE ASSESSEE. BUT ASSESSEE DID NOT APPEAR BEFORE HIM ON 30.06.2011 AN D NO INTIMATION WAS SENT TO HIS OFFICE TILL 4 TH JULY 2011.WE FURTHER FIND THAT IN THE AFFIDAVIT FIL ED BY THE C.A. OF THE ASSESSEE, IT HAS BEEN SUBMITTED THAT BECAUSE OF ILL HEALTH, HE COULD NOT ATTEND THE APPELLATE PROCEEDINGS. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE AR E OF THE OPINION THAT, IN THE INTEREST OF JUSTICE, MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE F AA FOR FRESH ADJUDICATION SUBJECT TO PAYMENT OF COST OF RS. 5,000/- BY THE ASSESSEE ON OR BEFORE 31 .03.2011.ASSESSEE IS DIRECTED TO APPEAR BEFORE THE FAA ON 13.05.2014 AND EXTEND FULL CO-OPERATION DURING THE HEARING BEFORE HIM. WITH THESE OBSERVATIONS GROUNDS OF APPEAL FILED BY THE ASSESSE E STAND ALLOWED FOR STATISTICAL PURPOSES. AS A RESULT,APPEAL FILED BY THE ASS ESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. .%/$% 0 1 2& 345 6% & % 78. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH,2014 . - & *+ : ; 13 EKPZ EKPZ EKPZ EKPZ , 201 4 + & , < SD/- SD/- ( . . / I.P.BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, ; /DATE:13.03.2014. SK - - - - & && & '%= '%= '%= '%= >=% >=% >=% >=% / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / ! 2. RESPONDENT / '# ! 3. THE CONCERNED CIT(A)/ ? @ , 4. THE CONCERNED CIT / ? @ 5. DR L BENCH, ITAT, MUMBAI / =A, '% ,Y ,Y,Y ,Y BC , . . . 6. GUARD FILE/ ,B . #=% #=% #=% #=% '% '%'% '% //TRUE COPY// - / BY ORDER, 3 / 7 DY./ASST. REGISTRAR , /ITAT, MUMBAI