THE COMMISSIONER OF INCOME TAX V. M/S WIFI NETWORKS PVT LTD

ITA/562/2013

AI Insights

The case involves multiple appeals by the Commissioner of Income-tax and the Deputy Commissioner of Income Tax against M/s. Wifi Networks Pvt. Ltd., concerning orders passed by the ITAT, Bangalore. The appeals were filed under Section 260-A of the Income Tax Act, 1961, challenging the ITAT's decisions for the assessment years 2006-2007 and 2007-2008. The primary legal issue was whether the payments in question attracted Section 194J of the Income Tax Act, which pertains to the deduction of tax at source on professional or technical services. The Tribunal had decided the appeals on a ground not previously considered by the parties, leading to the Revenue's challenge in the High Court.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 733405 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 14-11-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: CHYTHANYA
• Assessee Lawyers: K V ARAVIND
• Keywords: Appeal; Assessment Year; Income Tax; Natural Justice; Tribunal
• Section: 194J; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 14TH DAY OF NOVEMBER 2014 PRESENT THE HON'BLE MR. JUSTICE N. KUMAR AND THE HON’BLE MR. JUSTICE B. MANOHAR ITA NO.562 OF 2013 C/W ITA NOs.546, 560 & 545 OF 2013 IN ITA NO.562 OF 2013: BETWEEN; 1. The Commissioner of Income-tax, TDS, No.59, HMT Bhavan 4th Floor, Bellary Road Ganganagar, Bangalore 2. The Deputy Commissioner of Income Tax Circle-18(1), No.59, HMT Bhavan, 4th Floor, Bellary Road Ganganagar, Bangalore - 560 032 ...APPELLANTS (By Sri.K.V. Aravind, Advocate) 2 AND: M/s. Wifi Networks Pvt. Ltd., No.427, 80 Feet Circular Road, VI Block, Koramangala Bangalore - 560 095 ...RESPONDENT (By Sri.Chythanya K.K. Advocate) This appeal is filed under Section 260-Aof Income Tax Act 1961, arising out of order dated 21.06.2013 passed in ITA No.1626/Bang/2012, for the Assessment year 2007- 2008 praying to formulate the substantial questions of law stated above and to allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA No.1626/Bang/2012 dated 21.06.2013 and confirm the order of the Appellate Commissioner confirming the order passed by the Deputy Commissioner of Income tax, Circle – 18(1), Bangalore. IN ITA NO.546 OF 2013 BETWEEN; 1. The Commissioner of Income-tax, TDS, No.59, HMT Bhavan 4th Floor, Bellary Road Ganganagar, Bangalore 2. The Deputy Commissioner of Income Tax Circle-18(1), No.59, HMT Bhavan 4th Floor, Bellary Road Ganganagar, Bangalore - 560 032 ...APPELLANTS (By Sri.K.V. Aravind, Advocate) 3 AND: M/s. Wifi Networks Pvt. Ltd., No.427, 80 Feet Circular Road, VI Block, Koramangala Bangalore 560 095 ...RESPONDENT (By Sri.Chythanya K.K. Advocate) This appeal is filed under Section 260-Aof Income Tax Act 1961, arising out of order dated 21.06.2013 passed in ITA No.1624/Bang/2012, for the Assessment year 2006- 2007 praying to formulate the substantial questions of law stated above and to allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA No.1624/Bang/2012 dated 21.06.2013 and confirm the order of the Appellate Commissioner confirming the order passed by the Deputy Commissioner of Income tax, Circle – 18(1), Bangalore. IN ITA NO.560 OF 2013: BETWEEN; 1. The Commissioner of Income-tax, TDS, No.59, HMT Bhavan 4th Floor, Bellary Road Ganganagar, Bangalore. 2. The Deputy Commissioner of Income Tax Circle-18(1) No.59, HMT Bhavan, 4th Floor, Bellary Road Ganganagar, Bangalore - 560 032 ...APPELLANTS (By Sri.K.V. Aravind, Advocate) AND: M/s. Wifi Networks Pvt. Ltd., No.427, 80 Feet Circular Road, 4 VI Block, Koramangala Bangalore 560 095. ...RESPONDENT (By Sri.Chythanya K.K. Advocate) This appeal is filed under Section 260-Aof Income Tax Act 1961, arising out of order dated 21.06.2013 passed in ITA No.1627/Bang/2012, for the Assessment year 2007- 2008 praying to formulate the substantial questions of law stated above and to allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA No.1627/Bang/2012 dated 21.06.2013 and confirm the order of the Appellate Commissioner confirming the order passed by the Deputy Commissioner of Income tax, Circle – 18(1), Bangalore. IN ITA NO.545 OF 2013: BETWEEN; 1. The Commissioner of Income-tax, TDS, No.59, HMT Bhavan 4th Floor, Bellary Road Ganganagar, Bangalore 2. The Deputy Commissioner of Income Tax Circle-18(1), No.59, HMT Bhavan, 4th Floor, Bellary Road Ganganagar, Bangalore - 560 032 ...APPELLANTS (By Sri.K.V. Aravind, Advocate) AND: M/s. Wifi Networks Pvt. Ltd., No.427, 80 Feet Circular Road, 5 VI Block, Koramangala Bangalore 560 095. ...RESPONDENT (By Sri.Chythanya K.K. Advocate) -0-0-0-0-0- This appeal is filed under Section 260-Aof Income Tax Act 1961, arising out of order dated 21/06/2013 passed in ITA No.1625/Bang/2012, for the Assessment year 2006- 2007 praying to formulate the substantial questions of law stated above and to allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA No.1625/Bang/2012 dated 21.06.2013 and confirm the order of the Appellate Commissioner confirming the order passed by the Deputy Commissioner of Income tax, Circle – 18(1), Bangalore. These appeals coming on for Admission this day, N.KUMAR, J. delivered the following:- COMMON JUDGMENT The Revenue has preferred these appeals challenging the order passed by the Tribunal. 2. All these appeals arise out of a same common order involving the same assessee and therefore, they are taken up for consideration together and disposed of by this common order. 6 3. The common substantial question of law which is framed in this appeal is as under:- “ Whether on the facts and in the circumstance of the case, the Tribunal was justified in holding that, the payment in question does not attract section 194J as credit is given to the account of the payee by virtue of oral agreement dated 01.06.2006 without examining the existence such oral agreement and recorded a perverse finding?” 3. Learned counsel for the Revenue submitted that the ground on which the Tribunal has granted relief to the assessee was not a ground urged by the assessee in the lower forums as well as before the Tribunal also. But the Tribunal while writing the judgment without considering the ground urged by the assessee felt the issue in these appeals could be considered from a different prospective and decided the appeals on a ground which was not known to the parties, or which was made known to the parties at the time of hearing the appeal and therefore, he submits the impugned order is to be set aside and the matter has to be remanded 7 back to the Tribunal for giving an opportunity to the Revenue to have their say as far as the ground which is raised by the Tribunal while passing the impugned order. 4. The learned counsel for the assessee submits the ground urged by the assessee is not at all considered. Even if the court wants to decide the appeal on the different ground the finding has to be recorded on the ground which is urged based on the orders passed by the two lower authorities. Therefore the case has to be sent back to the Tribunal and the Tribunal may be directed to consider the appeals on the ground urged by the assessee. 5. In view of the aforesaid facts and submissions, we are of the view that the order passed by the Tribunal is not proper. It violates principles of natural justice. The Tribunal has a jurisdiction to decide the appeals on the ground which are not urged by both the parties. But the parties should be given an opportunity to have their say. 6. In that view of the matter, we deem it proper to set aside the order impugned herein and remand back the 8 matter to the Tribunal and Tribunal shall consider the appeals on the ground urged by the assessee as well as the additional ground the Tribunal found relevant to decide the appeals after recording the finding on both the grounds the appeal may be disposed of on merits in accordance with law. That would meet ends of justice. Ordered accordingly. Sd/- JUDGE. Sd/- JUDGE. Bsv "