Euromonitor Research & Consulting India Private Limited , Bangalore V. The Assistant Commissioner of Income TAx Circle-2(1)(2), Bangalore

ITA 970/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5041 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N SIDDAPPAJI CIT HEARD ON PR
• Assessee Lawyers: RISHI HARLALKA

Judgement Text

ITA.970/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.970/BANG/2018 (ASSESSMENT YEAR : 2014-15) EUROMONITOR RESEARCH & CONSULTING (INDIA) P. LTD, UNIT N 1503, 15 TH FLOOR, WORLD TRADE CENTRE, BRIGADE GATEWAY CAMPUS, 26/1, DR. RAJKUMAR ROAD, BENGALURU 560055 .. APPE LLANT PAN : AACCE7021L V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1)(2), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. RISHI HARLALKA, CA REVENUE BY : SHRI. R. N. SIDDAPPAJI, ADDL. CIT HEARD ON : 05.02.2019 PRONOUNCED ON : 06.02.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT (A)-2, BENGALURU, DT.15.12.2017, FOR THE ASSESS MENT YEAR 2014-15. ITA.970/BANG/2018 PAGE - 2 02. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND, WHICH IS AS FOLLOWS : 03. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE EX-PARTE ORDER PASSED BY THE CIT (A). IN PARA 3 THE CIT (A) HAS O BSERVED AS UNDER: 3. THE CASE WAS POSTED FOR HEARING ON 11.9.2017. THE APPELLANT SOUGHT ADJOURNMENT VIDE LE TTER DATED 11.9.2017 ON THE PRETEXT THAT THE AR IS TRAVELLING. THE CASE WAS RE-POSTED FOR HEARING ON 20.9.2817. AGAIN, THE APPELLANT SOUGHT ADJOURNMENT ON THE PRETEXT THAT TH E AR ITA.970/BANG/2018 PAGE - 3 IS TRAVELLING. AT ITS REQUEST THE CASE WAS AGAIN POSTE D FOR HEARING ON 27,10,2017. IN RESPONSE TO THE SAID HEAR ING NOTICE, THE APPELLANT FILED E REQUEST LETTER FOR ADJOURNMEN T ON THE GROUND THAT REQUISITE DOCUMENTS WERE BEING COLLATED . AT ITS REQUEST THE CASE WAS ADJOURNED TO 22.11.2917. IN RE SPONSE THE APPELLANT FURTHER FILED REQUEST LETTER FOR ADJO URNMENT ON 21.11,2917 ON THE SAME PRETEXT THAT STILL IN THE PROCESS OF COLLATING THE REQUISITE DOCUMENTS. BASED ON THE SAID REQUEST THE CASE WAS POSTED FOR HEARING ON 11.12.2017 WHICH WAS CONVEYED TO THE APPELLANT AS A FINAL OPPORTUNITY. HOWEVER, THE APPELLANT HAS AGAIN FILED ANOTHER LETTER SEEKING ADJOURNMENT. FROM THE ABOVE, IT IS CLEAR THAT THE APPELLANT IS N OT KEEN TO PURSUE ITS APPEAL AND INDULGING IN DILATORY TACTICS WASTING THE PRECIOUS TIME AND RESOURCES OF THIS OFF ICE. CONSIDERING THE SAME, I PROCEED TO DISPOSE OF THE APPEAL WITHOUT GIVING ANY FURTHER OPPORTUNITY BASED ON THE MATERIALS AVAILABLE ON RECORD. 04. IT IS SUBMITTED BY THE LD. AR THAT THE ASSESSEE WAS COLLECTING THE RECORDS PERTAINING TO DISALLOWANCE MADE BY THE AO OF RS.3 LAKHS AND THEREFORE THE AUTHORISED REPRESENTATIVE W AS THAT ABLE TO APPEAR BEFORE THE COMMISSIONER. FURTHER ON INSTRUCT IONS IT WAS SUBMITTED THAT THE ASSESSEE IS NOT PRESSING THE GRO UND IN RESPECT OF DISALLOWANCE OF RS.3 LAKHS. FURTHER IT WAS SUBMITTED THAT THE CIT (A) HAS NOT DECIDED THE ISSUE WHICH WAS RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE CIT (A) IN RESPECT OF THE MANAGEMENT FEES AND THE COMMI SSIONER HAD DISMISSED THE GROUND OF THE ASSESSEE ON THE PREMISE THAT THE ASSESSEE HAS NOT RAISED THIS GROUND BEFORE THE AO. IT WAS SUBMITTED BY THE LD. AR THAT IT WAS INCUMBENT UPON THE CIT (A ) TO DECIDE THE ISSUE ON MERIT THE ISSUE OF TAXABILITY OF MANAGEMEN T FEES. THE LD. AR RELIED UPON THE FOLLOWING DECISIONS: ITA.970/BANG/2018 PAGE - 4 NATIONAL THERMAL POWER CO. LTD V. CIT [(1998) 229 I TR 383 (SC)] NATHPA JHAKRI JOINT VENTURE V. ACIT [(2010) 37 SOT 160-MUM] CIT V. JAI PARABOLIC SPRINGS LTD [(2008) 172 TAXMAN 258 (DEL)] IT WAS SUBMITTED THAT THE ASSESSEE HAS WRONGLY CLAI MED THE DEDUCTION BEFORE THE AO, IS NOT A GROUND TO DENY TH E ADJUDICATION OF THE GROUND BY THE FIRST APPELLATE AUTHORITY AS THE PROCEEDING BEFORE THE CIT (A) IS A CONTINUATION OF THE ASSESSMENT PRO CEEDINGS AND IT WAS THE DUTY OF THE CIT (A) TO ADJUDICATE THE GROUN DS RAISED BEFORE IT IN RESPECT OF THE TAXABILITY OR NON-TAXABILITY O F MANAGEMENT FEES. IT IS SUBMITTED THAT THE PURPOSE OF PROCEEDINGS BEF ORE THE AO / CIT (A) / ITAT IS TO DETERMINE THE TAXABLE INCOME AND T HERE IS NO ADVERSARY LITIGATION BETWEEN THE REVENUE AND THE AS SESSEE. 05. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THE ASSESSEE DESPITE GRANTING OF ADEQUATE OPPORTUNITY HAS NOT CO ME FORWARD TO MAKE THE SUBMISSION BEFORE THE CIT (A) AND IT WAS T HE FURTHER CASE OF THE LD. DR THAT ONCE THE ASSESSEE HAS ADMITTED A ND DISALLOWED THE CLAIM U/S.40(A)(I) OF THE ACT, BEFORE THE AO, I T IS NOT OPEN FOR THE ASSESSEE TO TAKE A CONTRARY STAND BEFORE THE CI T (A). 06. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. AT THIS JUNCTURE, WE MAY MENTION THAT WE ARE DISINC LINED TO SUSTAIN THE PRELIMINARY OBJECTION TAKEN BY THE LD. DR THAT THE ASSESSEE SHOULD BE PROHIBITED FROM 2 ND INNINGS BEFORE THE CIT(A). IT GOES WITHOUT SAYING THAT THE OBJECT OF ASSESSMENT IS TO DETERMINE THE INCOME IN RESPECT OF WHICH THE ASSESSEE IS RIGHTLY CHARGEABLE TO TAX. AS THE INCOME NOT ORIGINALLY OFFERED FOR TAXATION, IF OTHERWISE CHARGEABLE, IS REQUIRED TO BE INCLUDED IN THE TOTAL INCOME, IN THE ITA.970/BANG/2018 PAGE - 5 SAME BREATH, ANY INCOME WRONGLY INCLUDED IN THE TOT AL INCOME, WHICH IS OTHERWISE NOT CHARGEABLE, SHOULD BE EXCLUD ED. THERE CAN BE NO ESTOPPELS AGAINST THE PROVISIONS OF THE ACT. 07 PARA 3 OF THE CIT (A) REPRODUCED HEREINABOVE, SPEAKS VOLUMES ABOUT THE CONDUCT OF THE ASSESSEE, MORE PAR TICULARLY WHEN THE ASSESSEE IS REPRESENTED BY A BATTERY OF GOOD LA WYERS AND ALSO BY THE CHARTERED ACCOUNTANTS OF REPUTED CONSULTANCY FI RMS. WE FAIL TO UNDERSTAND UNDER WHAT CIRCUMSTANCES THE ASSESSEE WA S GIVEN TO UNDERSTAND THAT THE MANAGEMENT FEES ARE NOT TAXABLE BY THE ASSESSEE AND THE ASSESSEE HAS WRONGLY DISALLOWED THE SAME IN THE RETURN OF INCOME. WE ALSO FAIL TO APPRECIATE THAT A CONSULTA NCY FIRM WHICH IS REPRESENTING THE ASSESSEE, DESPITE KNOWING VERY WEL L ABOUT THE DATE OF HEARING FAILS TO APPEAR BEFORE THE CIT (A). FR OM A PERUSAL OF THE PARA 3 OF CIT (A), IT IS CLEAR THAT SUFFICIENT OPPO RTUNITIES WERE GRANTED TO THE ASSESSEE TO FILE ITS RESPONSE. HOWE VER WE ALSO FIND THAT THE ASSESSEE HAS CONTINUOUSLY SOUGHT TIME ON F OUR OCCASIONS WITHOUT ANY JUSTIFIABLE REASON. IN THE ABSENCE OF ADEQUATE COOPERATION BY THE ARS OF THE ASSESSEE, THE CIT (A) HAD NO OPTION BUT TO PROCEED ON THE BASIS OF THE MATERIALS AVAILA BLE ON RECORD. INVARIABLY, WE WOULD HAVE BEEN DISMISSING SUCH REQU ESTS FOR GRANTING ONE MORE OPPORTUNITY TO THE ASSESSEE FOR A PPEARANCE BEFORE THE CIT(A). HOWEVER CONSIDERING THE FACT THAT A LEG AL ISSUE ABOUT THE INTER GROUP MANAGEMENT SERVICES HAD NOT BEEN AD JUDICATED BY THE CIT (A), IN THE INTEREST OF JUSTICE AND CONSIDE RING THE TOTALITY OF FACTS, WE REMAND THE MATTER RELATING TO INTERGROUP MANAGEMENT SERVICES, BACK TO THE FILE OF THE CIT (A), SUBJECT TO THE PAYMENT OF ITA.970/BANG/2018 PAGE - 6 COST OF RS 2,00,000/- OR EQUIVALENT TO FEES PAID B Y THE ASSESSEE TO ITS CONSULTANCY FIRM FOR PURSUING THE APPELLATE PRO CEEDINGS BEFORE THE CIT(A), WHICHEVER IS LOWER. WE FURTHER DIRECT T HE ASSESSEE TO DEPOSIT THE SAME AMOUNT EQUIVALENT TO THE LEGAL FEE S INTO THE ACCOUNT OF THE CHIEF MINISTERS RELIEF FUND. 08 . WE MAY OBSERVE THAT WHENEVER THE ASSESSEE WIS HES TO RAISE ANY GROUND WHICH IS NOT EMANATING FROM THE ORDER PA SSED BY THE ASSESSING OFFICER, IN THAT EVENTUALITY, THE ASSESSE E SHOULD RAISE ADDITIONAL GROUNDS BEFORE THE COMMISSIONER. IN THE PRESENT CASE THE NEEDFUL HAD NOT BEEN DONE BY THE ASSESSEE THEREFORE THE COMMISSIONER WAS HAVING NO OPTION BUT TO DECIDE THE GROUND BASED ON THE MATERIAL AVAILABLE AND IN ACCORDANCE OF THE. SINCE NOW THE ASSESSEE HAS REQUESTED BEFORE US THAT THE GROUND RA ISED BY THE ASSESSEE BEFORE THE COMMISSIONER MAY BE TREATED AS AN ADDITIONAL GROUND, WE FIND NO REASON TO DECLINE THIS REQUEST, THEREFORE WE DIRECT THE COMMISSIONER TO ENTERTAIN GROUND AS AN A DDITIONAL GROUND AND PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW A S DEEM FIT. 09. IN THIS VIEW OF THE ABOVE WE REMAND THE MATTER TO THE FILE OF THE COMMISSIONER TO DECIDE THE ISSUE AFRESH AFTER H OLDING DENOVO APPELLATE PROCEEDINGS AND THE CIT (A) SHALL ADMIT T HE ADDITIONAL GROUND OF 40(A)(I) IN ACCORDANCE WITH LAW AND THE C IT (A) SHALL CONSIDER THE MATERIAL PRODUCED BEFORE HIM IN ACCOR DANCE OF LAW WITH LAW. NEEDLESS TO SAY THE ASSESSEE SHALL APPEAR ON EACH AND ITA.970/BANG/2018 PAGE - 7 EVERY DATE FIXED BY THE COMMISSIONER AND FILE THE D OCUMENTS / REPLY AS AND WHEN CALLED UPON BY THE COMMISSIONER. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DAY OF FEBRUARY, 2019. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED : 06.02.2019 MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE.