M/s Operators Communication Network Private Limited, Mangalore V. ACIT, Mangalore

ITA 943/BANG/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7403 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO
• Assessee Lawyers: V SRINIVASAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI N BARATHVAJA SANKAR, VICE RESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO .943/BANG/2010 (ASST. YEAR - 2007-08) M/S OPERATORS COMMUNICATION NETWORK PVT. LTD., 14-1-81, TOP FLOOR, TRADE CENTRE, BUNTS HOSTEL ROAD, MANGALURU. . APPELLANT PAN NO.AAACO6462H. VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), MANGALURU. . RESPONDENT APPELLANT BY : SHRI V SRINIVASAN RESPONDENT BY : SHRI G.V GOPALA RAO DATE OF HEARING : 11-01-2012 DATE OF PRONOUNCEMENT : 11-01-2012 O R D E R PER P MADHAVI DEVI, JUDICIAL MEMBER : THE APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AT ITA NO.943/B/10 2 MANGALURE DATED 26.06.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED VARIOU S GROUNDS OF APPEAL CHALLENGING THE ORDER OF THE CIT(A) IN UPHOLDING TH E DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT IN RESPECT OF AMOUNTS PAID ON ACCOUNT OF SUBSCRIPTION TO PAY CHANNELS AMOUNTING TO RS.1,06, 97,058/- WITHOUT DEDUCTING TAX AT SOURCE U/S 195 OF THE ACT. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GRO UND OF APPEAL TO THE EFFECT THAT THE DISALLOWANCE U/S 40(A)(IA) OF T HE ACT HAS NO APPLICATION TO THE FACTS OF THE ASSESSEES CASE, AS THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO PAY CHANNELS, AS THE SAID PAYMENT IS NOT LIABLE FOR ANY DEDUCTION OF TAX AT SOURCE. IT WAS SUBMITTED THAT THIS GROUND OF APPEAL WAS NOT RA ISED EITHER BEFORE THE AO OR BEFORE THE CIT(A). THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS GROUND GOES TO THE ROOT OF THE MATER AND BEING LEGAL GROUND CAN BE RAISED AT ANY STAGE OF PROCEEDI NGS AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CORPORATION VS. CIT REPORTED IN 229 ITR 383. HE TH US, PRAYED THAT ITA NO.943/B/10 3 THE ADDITIONAL GROUND OF APPEAL MAY BE ADMITTED AND ADJUDICATED UPON. 4. THE LEARNED DR SHRI G.V GOPALA RAO HOWEVER, STR ONGLY OPPOSED THE ADMISSION OF ADDITIONAL GROUND OF APPEA L ON THE GROUND THAT THE ASSESSEE HAS NOT RAISED THIS GROUND EITHER BEFORE THE AO OR BEFORE THE CIT(A) AND IT IS NOT MERE LEGAL QUESTION BUT ALSO INVOLVES THE APPRECIATION OF FACTS. 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THA T THE QUESTION RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND OF APPEAL HAD NOT BEEN RAISED BEFORE THE AUTHORITIES BELOW BUT IT GOES TO THE VERY ROOT OF THE MATTER, AS IT IS TO BE FIRST DECIDED WHETHER THE AM OUNT IS LIABLE TO BE TAXED UNDER INCOME-TAX ACT AND IF IT IS FOUND TO BE SO, ONLY THEN CAN THE TAX BE DEDUCTED AT SOURCE AND FAILURE TO DEDUC T SUCH TAX AT SOURCE WOULD ATTRACT THE PROVISION OF SEC. 40(A)(IA) OF TH E ACT. IT THUS, INVOLVES APPRECIATION OF BOTH LEGAL AS WELL AS FACT UAL ASPECTS OF THE CASE. AS THE ISSUE GOES TO THE VERY ROOT OF THE M ATTER, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AND REMIT THE ISSUE B ACK TO THE FILE OF THE ITA NO.943/B/10 4 AO FOR DEALING WITH THE ISSUE IN ACCORDANCE WITH LA W. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPP ORTUNITY OF HEARING. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JAN, 2012. SD/- SD/- (N BARATHVAJA SANKAR) (P MADHAVI DEVI) VICE PRESIDENT JUDICIAL MEMBER VMS. BANGALORE DATED : 11/01/2012 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.