KOLORS HEALTHCARE INDIA PRIVATE LIMITED.,HYDERABAD V. ACIT, CENTRAL CIRCLE-3(4), HYDERABAD

SA 24/HYD/2024

AI Insights

Kolors Healthcare India Private Limited filed stay applications against the recovery of an outstanding tax demand which arose from additions sustained by the CIT (A) at 15% of unaccounted or non-reconciled gross receipts for various assessment years. The Tribunal noted the absence of any representative from the Department during the hearing, despite multiple adjournments and the availability of several Departmental Representatives. The assessee argued that the CIT (A)'s application of a 15% net profit rate was arbitrary, contrasting it with the average net profit of 7.5% declared by the assessee and 6% prevailing in the industry. The Tribunal also observed discrepancies in the tax credit calculations by the Assessing Officer, particularly the non-inclusion of a Rs. 20 lakh self-assessment tax credit. After considering these factors, the Tribunal decided to stay the recovery of the outstanding demand, emphasizing the need for the Department to take the proceedings seriously and adhere to procedural norms.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 40053 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Others
• Pronouncement Date: 22-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 22-11-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 25-09-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: TDS; Application of stay
• Section: 22; 27

Judgement Text

" SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member S.A.Nos.22 to 27/Hyd/2024 आ.अपी.सं /ITA Nos.930 to 934 & 936/Hyd/2024 (िनधाŊरण वषŊ/Assessment Years: 2013-14 to 2017-18 & 2019-20) Kolors Healthcare India Private Limited, Hyderabad PAN:AADCK8392B Vs. A.C.I.T. Central Circle 3(4) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri P. Murali Mohan Rao, CA राज̾ व Ȫारा/Revenue by:: N O N E सुनवाई की तारीख/Date of hearing: 22/11/2024 घोषणा की तारीख/Pronouncement: 22/11/2024 आदेश/ORDER Per Vijay Pal Rao, Vice President By way of these stay applications, the assessee is seeking stay against the recovery of outstanding demand arising from the additions sustained by the learned CIT (A) @15% of unaccounted/non-reconciled gross receipts. 2. None appeared on behalf of the Department when these stay petitions were called upon for hearing on today i.e. SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 2 of 6 22/11/2024. It transpires from the record that, on the last date of hearing i.e. on 8/11/2024, the hearing of the stay petitions were adjourned at the joint request of the parties i.e. learned AR and the learned DR. Even on the earlier dates of hearing, all these stay petitions were adjourned at the request of the assessee. The learned DR has sent an application for adjournment of hearing, on the ground that, she is suffering from low BP with nausea. However, nobody has appeared on behalf of the Department despite the fact that, there are 4 Departmental Representatives deputed for representing the Department before the Tribunal. Even in case of absence of a particular Departmental Representative due to health issue, the Department ought to have assigned the duties to the other Officer to appear before the Bench and participate in the proceedings. The non-appearance on behalf of the Department at the time of hearing of the stay petitions clearly manifest the casual approach of the Department towards the proceedings of the Tribunal. Even otherwise, the Department is not to take repeated adjournment of hearing as clarified by the CBDT in the instructions issued from time to time. This Bench takes a serious view of the non-appearance of the Department not only in one case but on all cases fixed for hearing for 22/11/2024 which shows that the Department is not taking hearing of stay matters as well as miscellaneous applications before the Tribunal seriously. We accordingly propose to hear and dispose of these stay petitions ex-parte. SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 3 of 6 3. The learned AR of the assessee has submitted that the assessee has prima facie good case on merit of the appeals as the learned CIT (A) has confirmed the additions made by the Assessing Officer by taking net profit @ 15% of the unaccounted receipts which is not based on any proper or reasonable criteria or prevailing net profit in the industry. The learned AR has further submitted that the assessee has declared average net profit @ 7.5% for these six A.Ys and the profit rate prevailing in the industry is only 6% against which the learned CIT (A) has applied net profit at 15% which is highly arbitrary and unjustified. Thus, the learned AR has contended that the additions confirmed by the learned CIT (A) is not sustainable in view of the facts that the rate applied by the learned CIT (A) is exorbitant and arbitrary. He has further pointed out that the assessee has already deposited/paid the tax to the tune of Rs.79,92,464/- against the demand of Rs.5,20,40,914/-. He has pointed out that the Assessing Officer while calculating the outstanding demand has not given the credit of Rs.20 lakhs for self-assessment tax which is duly reflected in 26AS placed at page 25 of the synopsis and submitted that the Assessing Officer while calculating the tax demand for the A.Y 2016-17 after giving effect to the order of the learned CIT (A) has raised a demand or Rs.1,17,12,617/- after considering the TDS, TCS and advance tax paid of Rs.55,38,496/- whereas as per 26AS, the total amount of tax already paid comes to Rs.75,38,496/- which shows that the Assessing Officer has not given the credit of Rs.20 lakhs being self-assessment tax paid by the assessee. Thus, the learned AR has submitted that there is a SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 4 of 6 deficiency of Rs.25.00 lakhs to make up the payment equivalent to 20% of the total demand arising from the consequential order of giving effect, passed by the Assessing Officer. He has stated at Bar that the assessee is ready to pay a further amount of Rs.25.00 lakhs on or before 4/12/2024 and pleaded that the balance outstanding demand may be stayed till the disposal of the appeal of the assessee. 4. Since none appeared on behalf of the Revenue at the time of hearing of these stay petitions, therefore, we do not have the privilege of hearing the arguments of the Department. 5. We have considered the submissions of the learned AR and carefully perused the impugned order passed by the Assessing Officer as well as by the learned CIT (A). We have also gone through the details of the payment of tax made by the assessee as per 26AS placed at page No.25 of the synopsis, particularly for the A.Y 2016-17. Thus, prima facie, we find that the Assessing Officer while calculating the outstanding demand has not considered the sum of Rs.20 lakhs paid by the assessee being self-assessment tax duly reflected in 26AS and therefore, after giving adjustment of Rs.20 lakhs, the total outstanding demand of tax for all these A.Ys comes to Rs.5,20,40,914/-. The payment of 20% of the outstanding demand comes to Rs.1,04,08,195/- against which the assessee has paid till date Rs.79,92,464/-. Therefore, there is a deficiency of Rs.25.00 lakhs in making up the payment equivalent to 20% of the demand SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 5 of 6 raised by the Assessing Officer after giving effect to the order of the learned CIT (A). 6. The Revenue has not challenged the impugned orders of the learned CIT (A). The assessee has made out a prima facie case on merits, particularly, on the point that the learned CIT (A) has applied net profit @ 15% without any basis and without considering the fact that that the average net profit declared by the assessee is 7.5% and the average net profit prevailing in the industry is about 6%. Accordingly, in the facts and circumstances as discussed above, we are inclined to stay the recovery of outstanding demand of tax for a period of 180 days or till the disposal of the appeals, whichever is earlier, subject to further payment of Rs.25.00 lakhs as agreed by the learned AR of the assessee on or before 4/12/2024. Accordingly, parties are directed not to take any adjournment of hearing of these appeals and also file paper books, if any, well in advance. 7. In the result, stay petitions filed by the assessee are allowed. Order pronounced in the Open Court on the conclusion of hearing on 22nd November, 2024. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 22nd November, 2024 Vinodan/sps SA Nos 22 to 27 of 2024 Kolors Healthcare India Private Limited Page 6 of 6 Copy to: S.No Addresses 1 Kolors Health Care India P Ltd c/o P Murali & Co. CAs, 6-3-655/2/3 Somajiguda, Hyderabad 500082 2 ACIT Central Circle 3(4) Hyderabad 3 Pr. CIT – Central, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "