Infosys Limited, Bangalore V. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

ITA 69/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8588 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-07-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 19-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(2); 13

Judgement Text

SP NO.69/BANG/2021 M/S. BIESSE MANUFACTURING COMPANY PVT. LTD., BANGAL ORE IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER S.P. NO.69/BANG/2021 (ARISING OUT OF IT(TP)A NO.338/BANG/2021 ASSESSMENT YEAR: 2016-17 M/S. BIESSE MANUFACTURING COMPANY PVT. LTD. SURVEY NO.32, NO.469 SONDEKOPPA ROAD JAKKASANDRA VILLAGE NELAMANGALA TALUK BENGALURU 562 123 PAN NO : AACCB7928D VS. ACIT CIRCLE-1(1)(2) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI TATA KRISHNA, A.R. RESPONDENT BY : SHRI KANNAN NARAYANAN, D.R. DATE OF HEARING : 13.08.2021 DATE OF PRONOUNCEMENT : 13.08.2021 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: BY THIS STAY PETITION, THE ASSESSEE SEEKS STAY OF D ISPUTED DEMAND OF RS.10,82,37,560/-. IT WAS SUBMITTED BY L D. A.R. THAT THE ENTIRE ASSESSMENT PROCEEDINGS IS BAD AND VOID AB IN ITIO FOR NON ISSUANCE OF VALID NOTICE UNDER SECTION 143(2) OF TH E INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] AND WANT OF JURISDIC TION U/S 127(1) OF THE ACT AND THE ORDER PASSED BY THE TPO IS BAD AS T HE SAME DOES NOT BEAR THE DIN WHICH IS MANDATORY UNDER CIRCULAR NO.1 9/2019, DATED SP NO.69/BANG/2021 M/S. BIESSE MANUFACTURING COMPANY PVT. LTD., BANGAL ORE PAGE 2 OF 4 14.8.2019. IN THE ABSENCE OF DIN, TPOS ORDER IS N ON EST AND TP ADDITION IS BAD. THE APPELLANT CEASES TO BE ELIGIB LE ASSESSEE AND HENCE, IMPUGNED ASSESSMENT ORDER IS TIME BARRED. T HE T.P. ADJUSTMENT OF RS.16,14,17,954/- WITH RESPECT TO MAN UFACTURING SEGMENT IS UNWARRANTED AS THE SAME IS MADE BY (A) F OLLOWING INCONSISTENT APPROACH AS AGAINST APPROACH ADOPTED I N THE PAST YEARS (B) APPLYING ILLEGAL FILTER (C) WITHOUT NOTICE AND OPPORTUNITY OF BEING HEARD (D) CRYPTIC & PERVERSE FINDINGS OF LEARNED DR P (E) SELECTING NON-COMPARABLE COMPANIES. THE TP ADJUSTMENT OF RS. 22,80,138/- WITH RESPECT TO OUTSTANDING RECEIVABLES IS MADE NOT IONALLY IN THE ABSENCE OF ANY AGREEMENT, CONTRARY TO THE PROVISION S OF CHAPTER X OF THE I.T. ACT AND THE PETITIONER IS A DEBT FREE COMP ANY. THE DISALLOWANCE OF REIMBURSEMENT OF EXPATRIATE SALARY OF RS.1,39,07,427/- AND REIMBURSEMENT OF EXPENSES OF E XPATRIATES OF RS.55,33,442/- ARE NOT TENABLE AS THE EXPAT IS THE EMPLOYEE OF THE PETITIONER AND SAME DOES NOT FALL UNDER FEES FOR TE CHNICAL SERVICES AS DEFINED IN EXPLANATION 2 TO SECTION 9(1)(VII) OF IT ACT. THE REIMBURSEMENT OF EXPENSES OF EXPATRIATES OF RS.55,3 3,442/- DOES NOT CONSTITUTE INCOME. THE LEVY OF INTEREST OF RS.34,2 6,165/- UNDER SECTIONS 234A IS UNWARRANTED AS THE PETITIONER HAS FILED ITS RETURN WITH THE DUE DATE. FURTHER, LD. A.R. SUBMITTED THA T ASSESSEE IS READY TO COMPLY THE REQUIREMENT AS MENTIONED IN FIRST PRO VISO TO SECTION 254(2A) OF THE ACT BY FURNISHING THE SECURITY TO TH E REVENUE TO THE EXTENT OF 20% OF THE AMOUNT OF OUTSTANDING DEMAND O F TAX. IN OTHER WORDS, THE LD. A.R. PROPOSED TO GIVE BANK GUARANTEE TOWARDS 20% OF OUTSTANDING DISPUTED TAX AS PER FIRST PROVISO TO SE CTION 254(2A) WHICH READS AS UNDER: PROVIDED THAT THE APPELLATE TRIBUNAL MAY, AFTER CO NSIDERING THE MERITS OF THE APPLICATION MADE BY THE ASSESSEE, PAS S AN ORDER OF STAY IN ANY PROCEEDINGS RELATING TO AN APPEAL FILED UNDE R SUB-SECTION (1) OF SECTION 253, FOR A PERIOD NOT EXCEEDING ONE HUND RED AND EIGHTY DAYS FROM THE DATE OF SUCH ORDER [SUBJECT TO THE CO NDITION THAT THE ASSESSEE DEPOSITS NOT LESS THAN TWENTY PERCENT OF T HE AMOUNT OF TAX, SP NO.69/BANG/2021 M/S. BIESSE MANUFACTURING COMPANY PVT. LTD., BANGAL ORE PAGE 3 OF 4 INTEREST, FEE, PENALTY, OR ANY OTHER SUM PAYABLE UN DER THE PROVISIONS OF THIS ACT, OR FURNISHES SECURITY OF EQUAL AMOUNT IN RESPECT THEREOF AND THE APPELLATE TRIBUNAL SHALL DISPOSE OF THE APP EAL WITHIN THE SAID PERIOD OF STAY SPECIFIED IN THAT ORDER. 2. THE LD. D.R. OPPOSED GRANTING OF ANY STAY SINCE THE ASSESSEE HAS NOT MADE OUT A CASE THAT ASSESSEE IS HAVING ANY FINANCIAL HARDSHIP AND THE SAID PETITION TO BE DISMISSED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IN OUR OPINION, THERE IS A PRIMA FACIE CASE IN FAVO UR OF ASSESSEE. HENCE, WE ARE INCLINED TO GRANT CONDITIONAL STAY. ASSESSEE SHALL PAY 20% OF THE OUTSTANDING DISPUTED TAX ON OR BEFORE 12 .9.2021 AND THE BALANCE DEMAND OF TAX IS STAYED FOR THE PERIOD OF 1 80 DAYS FROM THE DATE OF THIS ORDER OR TILL DISPOSAL OF THE APPEAL, WHICHEVER IS EARLIER. ORDERED ACCORDINGLY. 4. IN THE RESULT, THE STAY PETITION FILED BY THE AS SESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH AUG, 2021. SD/- (N.V. VASUDEVAN ) VICE PRESIDENT SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER BANGALORE, DATED 13 TH AUG, 2021. VG/SPS SP NO.69/BANG/2021 M/S. BIESSE MANUFACTURING COMPANY PVT. LTD., BANGAL ORE PAGE 4 OF 4 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.