M/S.GEMINI FILM CIRCUIT , CHENNAI V. ITO,NCW10(6), CHENNAI

MA 44/CHNY/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5886 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-10-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; TDS
• Section: 143(3); 40(a)(ia); 194J

Judgement Text

आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी मंजुनाथा, जी., लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri Manjunatha, G., Accountant Member M.P. No. 44/Chny/2023 [In I.T.A. No.794/Chny/2020] िनधाŊरण वषŊ/Assessment Year: 2008-09 M/s. Gemini Film Circuit, No. 28, New Bangaru Colony, West K.K. Nagar, Chennai 600 078. [PAN:AAFFG4152N] Vs. The Income Tax Officer, Non Corporate Ward 10(6), Chennai – 34. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri N. Arjunraj, CA ŮȑथŎ की ओर से/Respondent by : Shri ARV Sreenivasan, Addl. CIT सुनवाई की तारीख/ Date of hearing : 20.10.2023 घोषणा की तारीख /Date of Pronouncement : 31.10.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: By means of present Miscellaneous Petition, the assessee seeks to recall the order passed by the Tribunal in I.T.A. No. 794/Chny/2020 dated 21.12.2022 relevant to the assessment year 2008-09. 2. By referring to the petition, the ld. Counsel for the assessee has submitted that the respondent assessee has not received any of the hearing notice and thereby there was no scope for giving effective M.P. No.44/Chny/23 2 instructions to the counsel on record to make appearance before the Bench to defend their case. It was further submission that the mistake of non-appearance before the Bench may be condoned and the respondent/ assessee may be given a meaningful opportunity to defend/substantiate their case in the interest of justice. 3. On the other hand, the ld. DR has submitted that ample opportunities were afforded to the respondent assessee during the course of appeal hearing. It was further submission that there is no mistake apparent on record in the appeal order passed by the Tribunal. 4. We have heard both the sides, perused the order passed by the Tribunal dated 21.12.2022. During the course of appeal proceedings, neither the assessee put its appearance nor furnished any written submissions despite various opportunities afforded to defend the assessment order passed under section 143(3) r.w.s. 254 of the Act or to substantiate its case before the Tribunal. After considering the orders of authorities below, the Tribunal has observed and held as under: 7. We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. In the second round of litigation, pursuant to the directions of the ITAT, after considering the submissions of the assessee, the Assessing Officer passed the impugned order under section 143(3) r.w.s. 254 of the Act, wherein the Assessing Officer has once again confirmed the addition of ₹.15,46,88,000/- under section 40(a)(ia) of the Act. On appeal, the ld. CIT(A) deleted the addition as under: M.P. No.44/Chny/23 3 “9.17 Having held that cost of remake rights written off by the appellant firm is an allowable business deduction, the question to be answered is whether the disallowance made by the AO U/s.40(a)(ia) of the Act is warranted or not. In the instant case, the appellant firm had acquired the remake rights from one of its partners i.e., M/s. Gemini Industries & Imaging Limited on 01.04.2006, on which date the capital account of the partner has been credited with the value of remake rights. On 01.04.2006, there is no provision to deduct tax at source on royalty U/s.194J of the Act since TDS on royalty was introduced only with effect from 13.07.2006. Therefore, prima facie, the appellant firm is not liable to deduct tax at source on the sum of Rs.15,46,88,000/- credited to its partner's capital account on 01.04.2006. Thus, the appellant firm has not violated the provisions of Section 194J of the Act and accordingly disallowance U/s.40(a)(ia) of the Act is not warranted. Hence, I am of the considered view that the disallowance of Rs.15,46,88,000/- made by the AO U/s.40(a)(ia) of the Act is erroneous and accordingly direct the AO to delete the same. Therefore, the grounds of the appellant firm are allowed.” 8. We have gone through the above order passed by the ld. CIT(A). Without considering the issue properly, the ld. CIT(A) has deleted the addition made by the Assessing Officer. Thus, the order passed by the ld. CIT(A) has to be reversed. Accordingly, we reverse the order passed by the ld. CIT(A) and allow the appeal filed by the Revenue. On perusal of the above decision of the Tribunal, we find that the Tribunal has decided the matter after considering the materials available on record by reversing the order passed by the ld. CIT(A). However, considering the prayer of the ld. Counsel, to meet the ends of natural justice, we are of the considered opinion that the assessee may be given an opportunity to substantiate its case before the Tribunal. Accordingly, the exparte order passed by the Tribunal dated 21.12.2022 is recalled and restored for fresh adjudication. The Registry is directed to post the appeal for hearing on regular course. M.P. No.44/Chny/23 4 5. In the result, the MP filed by the petitioner is allowed. Order pronounced on 31 st October, 2023 at Chennai. Sd/- Sd/- (MANJUNATHA, G.) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 31.10.2023 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF.