M/s Paradise Stone Exporting Company Pvt. Ltd., Mangalore V. ACIT, Mangalore

ITA 822/BANG/2011

• Counselvise Citation: 82221114 RSA 2011
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SUNDAR RAJAN
• Assessee Lawyers: S VENKATESAN
• Keywords: Depreciation; Transfer pricing; Reasonable cause; Unabsorbed depreciation

Judgement Text

ITA.822/BANG/2011 P AGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI. N. V. VASUDEVAN, JUDICIAL MEMBER I.T.A NO.822/BANG/2011 (ASSESSMENT YEAR : 2007-08) M/S. PARADISE STONE EXPORTING CO. P. LTD., PLOT NO.120P & 121, BALKAMPADY INDUSTRIAL AREA, MANGALORE .. APPELLANT PAN : AABCP0693G V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE - 1(1), BANGALORE .. RESPONDENT APPELLANT BY : SHRI. S. VENKATESAN, CA RESPONDENT BY : SHRI. A. SUNDAR RAJAN, JCIT, DR DATE OF HEARING : 26.09.2012 DATE OF PRONOUNCEMENT : 05.10.2012 O R D E R PER N. BARATHVAJA SANKAR, VICE PRESIDENT : THIS IS AN APPEAL PREFERRED BY THE ASSESSEE, M/S. PARADISE STONE EXPORTING CO., P. LTD., BANGALORE, AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS), MYSORE, DATED .4.8.2010, FOR THE ASSESSMENT YEAR 2007-08. 02. THE ISSUES ON MERIT BROUGHT BEFORE US FOR ADJUD ICATION ARE THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN DISALLOW ING A SUM OF RS.2,44,244/- BEING THE DELAYED PAYMENT OF EMPLOYEE S CONTRIBUTION TO ITA.822/BANG/2011 P AGE - 2 PF AND ESI AND THERE WAS NO JUSTIFICATION IN MAKING ADDITION IN RESPECT OF ARMS LENGTH PRICE AMOUNTING TO RS.68,79, 837/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THAT APART, T HE ASSESSEE HAS BROUGHT BEFORE US ANOTHER GROUND WHEREIN IT IS CONT ENDED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIF IED IN REFUSING TO CONDONE THE DELAY IN FILING THE APPEAL UNDER THE FA CTS AND CIRCUMSTANCES OF THE ASSESSEE'S CASE. 03. NOW LET US TAKE UP THE GROUND RELATING TO NON-C ONDONATION OF THE DELAY IN FILING THE APPEAL BY THE COMMISSIONER OF INCOME-TAX (APPEALS). THERE WAS A DELAY OF 170 DAYS IN FILING THE APPEAL BY THE ASSESSEE. THE ASSESSEE FILED APPLICATION FOR CONDO NATION BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) IN WHICH IT WA S STATED AS UNDER : '1. THAT THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE ACT DATED.30/12/2009 BY THE LEARNED ASST.COMMISSIONER O F INCOME-TAX, CIRCLE -1(1), MANGALORE, WAS RECEIVED BY US ON 15.0 1.2010 AND THE APPEAL AGAINST THE SAID ORDER OUGHT TO HAVE BEEN FI LED ON OR BEFORE 14.02.2010. 2. THAT IT IS SUBMITTED THAT THE APPELLANT COMPANY WAS TAKEN OVER BY THE PRESENT MANAGEMENT IN THE MONTH OF NOVEMBER, 2008 AND THEREAFTER WE HAVE BEEN MANAGING THE AFFAIRS OF THE APPELLANT COMPANY. ITA.822/BANG/2011 P AGE - 3 3. THAT IT IS SUBMITTED THAT THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR THE ASSESSMENT YEAR 20 07-08 ON 30.12.2009, WHEREIN, THE INCOME ASSESSED WAS RS.NIL AFTER SETTING OFF THE EARLIER YEARS LOSS AND UNABSORBED DEPRECIATION AND THE TAX PAYABLE WAS ALSO DETERMINED AT RS.NIL. IT IS SUBMITTED THA T IN TERMS OF SECTION 79 OF THE IT ACT, THE APPELLANT COMPANY WAS NOT ELI GIBLE TO CARRY FORWARD OF THE LOSSES OF THE EARLIER YEARS TO THE S UBSEQUENT YEARS AND THEREFORE, WE WERE ADVISED THAT THERE WAS NO NEED T O FILE ANY APPEAL BEFORE THE HON'BLE COMMISSIONER OF INCOME-TAX (APPE ALS). 4. THAT AFTER THE COMPLETION OF THE ASSESSMENT PROC EEDINGS, THE LEARNED ASSESSING OFFICER LEVIED PENALTY U/S.271(1) (C) OF THE ACT. THEREAFTER, WE APPROACHED M/S. SHETTY & THOMAS, CAS , FOR ADVICE IN THE MATTER AND IT IS ONLY WHEN WE CAME TO UNDERSTAN D THAT WE OUGHT TO HAVE FILED THE APPEAL AGAINST THE ORDER OF ASSESSME NT PASSED U/S.143(3) OF THE ACT TO DEFEND THE PENAL ACTION EVEN THOUGH T HE INCOME ASSESSED WAS NIL AND THEY ADVISED US TO FILE AN APPEAL IMMED IATELY SEEKING CONDITION OF DELAY IN FILING THE APPEAL. 5. THAT WE THEREAFTER TOOK IMMEDIATE STEPS FOR PREP ARATION AND FILING OF THE APPEAL RESULTING IN 170 DAYS OF DELAY IN FILING THE APPEAL BEFORE THE HON'BLE COMMISSIONER. 6. THAT THE AFORESAID DELAY IN FILING THE APPEAL IS DUE TO REASONABLE CAUSE AND ON ACCOUNT OF CIRCUMSTANCES BEYOND OUR CO NTROL AS ITA.822/BANG/2011 P AGE - 4 MENTIONED ABOVE AND THE DELAY WAS NEITHER INTENTION AL, WILLFUL OR DELIBERATE.' 04. HOWEVER, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS OF THE VIEW THAT NO VALID REASON WAS GIVEN BY T HE ASSESSEE FOR THE DELAY OF 170 DAYS. HE WAS OF THE VIEW THAT THE ASS ESSEE WAS EARLIER ALSO ASSISTED BY CONSULTANTS AND THE ASSESSEE ALSO FILED A SEPARATE APPEAL AGAINST THE PENALTY U/S.271(1)(C), WHICH WAS CONSIDERED SEPARATELY WHEREIN SUBSTANTIAL ISSUES WERE ALSO RAI SED. HENCE, ACCORDING TO HIM THERE WAS NO VALID REASON IN THE C ONDONATION PETITION AND HENCE HE DISMISSED THE ASSESSEE'S APPEAL TREATI NG IT AS NON-EST. AGGRIEVED, THE ASSESSEE IS ON SECOND APPEAL BEFORE US WITH THE GROUNDS MENTIONED ELSEWHERE IN THIS ORDER. 05. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDE RED THE FACTS AND MATERIALS ON RECORD. WE HAVE PERUSED THE COPY OF THE CONDONATION PETITION FILED BY THE ASSESSEE BEFORE T HE COMMISSIONER OF INCOME-TAX (APPEALS). WE FIND FROM THE CONDONATION PETITION THAT THE ASSESSEE WAS DEPENDENT ON PROFESSIONAL ADVISE FOR F ILING THE APPEAL OR OTHERWISE AND ULTIMATELY WHEN THE ASSESSEE WAS ADVI SED TO FILE THE APPEAL HE HAS FILED THE APPEAL ON 4.8.2010. THUS, IN OUR CONSIDERED VIEW, RELYING ON THE PROFESSIONAL ADVISE IS A REASO NABLE CAUSE FOR THE DELAY IN FILING THE APPEAL. HENCE, WE DEEM IT FIT AND PROPER TO CONDONE THE DELAY AND RESTORE THE MATTER BACK TO TH E FILE OF THE ITA.822/BANG/2011 P AGE - 5 COMMISSIONER OF INCOME-TAX (APPEALS) WITH A DIRECTI ON TO DEAL WITH THE OTHER GROUNDS RAISED ON MERITS BEFORE HIM. 06. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED FOR STATISTICAL PURPOSE ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 05.10.2012. SD/- SD/- (N. V. VASUDEVAN) (N. BARATHVAJA SANKAR) JUDICIAL MEMBER VICE PRESIDENT