M/s. Nanocast R & D (India) Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(1), Ahmedabad

ITA 947/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1823 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: T H VASA
• Keywords: Principle of natural justice
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHM EDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !' # , ! $% ) ITA NO. 947/AHD/2012 (ASSESSM ENT YEAR: 2008-09) M/S. NANOCAST R&D (INDIA) PVT. LTD., 102, SHILL MAYUR COLONY NEXT TO TEXTILE TRADERS BANK, MITHAKALI, AHMEDABAD - 380009 VS. INCOME TAX OFFICER, WARD-5(1), AHMEDABAD PAN NO. AACCN2350H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T. H. VASA, A.R. RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. DATE OF HEARING : 21-03 -2016 DATE OF PRONOUNCEMENT : 06-04-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT(A)-XI, SURAT, DATED 19.03.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS OF DEVELOPMENT OF SOFTWARE TOOLS. THE ASSESSEE ELECTR ONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 24.09.2008 DECLARING TOT AL INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) VIDE ORDER DATED 20.10.2010 AND THE TOTAL INCOME WAS DET ERMINED AT RS.16,87,570/-. ITA NO.947/AHD/12 A.Y. 2008-09 (M/S NANOCAST R&D ( INDIA) PVT. LTD. VS. ITO) 2 AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 19.03.2012 DISMISSE D THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS N OW IN THE APPEAL BEFORE US AND HAS RAISED THE GROUNDS WHICH WERE LATER ON CONCISED AND THE CONCISE GROUNDS READ AS UNDER: [1] THAT THE ORDER OF LD. COMMISSIONER OF INCO ME TAX (APPEALS) - XI, AHMEDABAD CONFIRMING THE ADDITION OF RS. 16, 87, 570/- TO THE RETURNED INCOME OF RS. NIL IS AGAINST LAW, FACTS AND EVIDENCE ON RECORD. [2] THE APPELLANT CONTENDS THAT THE ORDER OF LD. CIT(A) IS WITHOUT ANY REASONABLE OPPORTUNITY, BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 20 TH FEBRUARY, 2012 WAS A CLOSED HOLIDAY AND THE APPELLA NT DID NOT RECEIVE NOTICE OF HEARING DATED 05/03/2012, FOR HEARING ON 15/03/2012 . [3] THAT THE LD. CIT(A) AND LD. A.O. BOTH ERRED I N CONFIRMING ADDITION OF RS.16,87,570/-OUT OF THE FOLLOWING COMMUNICATION EX PENSES ARE TO BE DISALLOWED DUE TO NON-DEDUCTION OF TDS, APPLYING PROVISIONS OF SECTION 40(A)(IA) R.W.S. 1961 OF THE ACT: S.NO. NAME OF PARTY TO WHOM PAYMENT MADE PAID RS. 1 AIRTEL BLACKBERRY 71,074 2 BROADBAND CHARGE DISHNET WIRELESS 1,14,855 3 INTERNET - TATA 57,640 4 RELIANCE INTERNET 2,50,000 5 RELIANCE TELEPHONE 1,15,344 6 STPI DATA COM CHARGES 10,78,570 TOTAL::: 16,87,570 [4] THAT THE LD. CIT (A) AND LD. A.O. - BOTH HAVE N OT SPECIFIED ANY SECTION UNDER WHICH TDS WAS REQUIRED TO BE MADE AND THE APPELLANT CONTENDS THAT NO TDS IS REQUIRED TO BE MADE FROM ABOVE PAYMENTS. THE APPELLANT CONTENDS THAT THERE IS NO OBLIGATION TO DEDUCT TDS FROM THE PAYMENTS TO THE PARTIES AS ABOVE AND THAT PAYMENT T O SOFTWARE TECHNOLOGY PARKS OF INDIA FOR DATA.COM CHARGES WAS PAYMENT TO THE PE RSONS MENTIONED IN SECTION 1961 OF THE ACT AND SINCE WAS NOT LIABLE TO DEDUCT TDS. THE ADDITION U/S. 40(A)(IA) IS NOT JUSTIFIED. [5] THE LD. A.O. ERRED IN NOT CONSIDERING THAT THE ADDITION OF RS. 16,87,570/- INCREASED THE BUSINESS PROFITS OF THE APPELLANT AND RS. 16,87,570/- BEING BUSINESS PROFITS, EXEMPTION U/S. 10A WAS ENTITLED ON THE PRO FITS INCLUDING THE ADDITION. ITA NO.947/AHD/12 A.Y. 2008-09 (M/S NANOCAST R&D ( INDIA) PVT. LTD. VS. ITO) 3 [6] THAT THE APPELLANT HAS FURNISHED ALL THE D ETAILS AND FACTS TO THE LEARNED A.O. HENCE THE LD. INCOME-TAX OFFICER HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S.271(L)(C) OF THE ACT. [7] THAT THE INTEREST U/S.234B OF RS. 1,42,352/- HAS BEEN WRONGLY CHARGED, AS THE APPELLANT DID NOT HAVE ANY TAXABLE INCOME AND OBLIG ATION TO PAY ADVANCE TAX SO THE SAME MAY PLEASED TO BE CANCELLED. [8] IN VIEW OF THE ABOVE AND THAT MAY BE URGE D AT THE TIME OF HEARING, IT IS PRAYED THAT: (I) THE ADDITIONS /DISALLOWANCES MADE TO THE INC OME OF THE APPELLANT COMPANY MAY PLEASE BE DELETED AND DEDUCTIONS, EXEMPTIONS AND RE LIEFS CLAIMED MAY PLEASE BE ALLOWED, (II) THAT THE INTEREST CHARGED U/S. 234B OF THE A CT OF RS.1,42,352/- MAY BE CANCELLED/REDUCED, (III) PENALTY PROCEEDINGS INITIATED U/S. 271(L)(C) MAY PLEASE BE CANCELLED AND NOTICE BE VACATED, (IV) SUCH OTHER RELIEF OR REDUCTION AS THE FACTS AN D CIRCUMSTANCES OF THE CASE SO REQUIRE BE GRANTED. 4. BEFORE US, LD. A.R. SUBMITTED THAT LD. CIT(A) HA S PASSED AN EX PARTE AND A CRYPTIC ORDER BY UPHOLDING THE FINDINGS OF A.O. AND THAT LD. CIT(A) HAS NOT GIVEN ANY INDEPENDENT FINDING ON THE ISSUES. THE REASON FOR NON APPEARANCE BEFORE LD. CIT(A) BY THE ASSESSEE WAS NOT ON ACCOUNT OF ANY MA LAFIDE INTENTION ON THE PART OF THE ASSESSEE BUT IT WAS ON ACCOUNT OF PREOCCUPATION OF THE A.R. WITH TIME BARRING INCOME TAX MATTERS. HE THEREFORE SUBMITTED THAT IN THE INTEREST OF JUSTICE, ASSESSEE BE GRANTED ONE MORE OPPORTUNITY TO PRESENT ITS CASE BEFORE LD. CIT(A) AND FURTHER ASSURED THAT ASSESSEE WILL CO-OPERATE BY ATTENDING TO THE HEARINGS BEFORE THE LD. CIT(A). ON THE OTHER HAND, LD. D.R. SUPPORTED THE ORDERS OF A.O. AND LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE ORDER OF LD. CIT(A), WE FIND THAT LD. CIT(A) BY A CRYPTIC ORDER HAS DECIDED THE ISSUE IN FAVOUR OF REVENUE BY UPHOLDING THE ADDITION MADE BY THE A.O. IT IS A SETTLED LAW THAT THE LD. CIT(A) MUST PASS A REASONED ORDER WHICH SHOULD REFLECT APPLICATION OF MIND ON THE ISSUES/POINTS RA ISED BEFORE HIM. THE HONBLE ITA NO.947/AHD/12 A.Y. 2008-09 (M/S NANOCAST R&D ( INDIA) PVT. LTD. VS. ITO) 4 DELHI HIGH COURT IN THE CASE OF VODAFONE ESSAR LTD VS. DRP, REPORTED IN (2011) 196 TAXMAN 0423, HAS HELD THAT WHEN A QUASI JUDICIA L AUTHORITY DEALS WITH A LIS, IT IS OBLIGATORY ON ITS PART TO ASCRIBE COGENT AND GERMAN E REASONS AS THE SAME IS THE HEART AND SOUL OF THE MATTER AND FURTHER THE SAME ALSO FA CILITATES APPRECIATION WHEN THE ORDER IS CALLED IN QUESTION BEFORE THE SUPERIOR FOR UM. IN THE PRESENT CASE, WE ARE OF THE VIEW THAT THE IMPUGNED ORDER SUFFERS FROM LACK OF REASONING AND IS NOT A SPEAKING ORDER. WE, THEREFORE, CONSIDER IT APPROPR IATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BEFORE LD. CIT(A) FOR DECIDING THE ISSUES AFRESH IN ACCORDANCE WITH LAW AND AFTER ALLOWING SUFFICIENT O PPORTUNITY OF HEARING TO BOTH THE PARTIES. NEEDLESS TO STATE THAT WHILE DECIDING THE APPEAL, THE LD. CIT(A) SHALL PASS A SPEAKING ORDER AS MANDATED BY PROVISIONS OF SECTION 250(6) OF THE ACT. ASSESSEE IS ALSO DIRECTED TO CO-OPERATE BY PROMPTLY FURNISHING ALL THE REQUIRED DETAILS CALLED FOR BY THE AUTHORITIES. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 06 - 04 - 201 6. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 06/04/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD