GOPALAN ENTERPRISES ,BENGALURU vs. DCIT, TDS, 1(1), BENGALURU

The brief facts of the case are that the assessee is running the multiplexes cinemas. The assessee had entered into agreement with Bigtree Entertainment Pvt. Ltd. permitting them to access their website to book the tickets in the cinema hall through the portal of Bigtree Entertainment Pvt. Ltd. As per the said agreement, the assessee had received the ticket price as found in the website of the assessee and the Bigtree Entertainment Pvt. Ltd. can charge the extra convenience fees from the customers. The Bigtree Entertainment Pvt. Ltd. will pay the ticket cost to the assessee and the assessee also received a share in the convenience fee collected by the Bigtree Entertainment Pvt. Ltd. The AO had concluded that the convenience charges collected by the Bigtree Entertainment Pvt. Ltd. is the commission paid by the assessee to them and therefore the provisions of TDS u/s. 194H would attract and on that basis, a demand was made. The assessee filed an application u/s. 154 of the Act since the said demand raised by the AO is against the decision of the Hon’ble Jurisdictional Tribunal. The AO had not accepted the said application and thereafter the assessee filed an appeal before this Tribunal against the order made u/s. 201(1) and 201(1A) of the Act. Along with the appeal, the assessee also uploaded the condonation application to condone the delay of 608 days. In the said application, the assessee had explained reasons for the said delay and also relied on the rectification application filed before the AO and prayed to condone the said delay of 608 days. The Ld.CIT(A) had rejected the said delay condonation application and also dismissed the appeal on the ground that the assessee had not appeared before him.

As against the said order, the assessee is in appeal before this Tribunal.

At the time of hearing, the Ld.AR submitted that the assessee had filed the appeal only after exhausting the remedy of filing the rectification application and the said fact was also narrated in the delay condonation application but unfortunately, the Ld.CIT(A) had observed that the assessee had not attached the delay condonation application and on that ground, the rejection of the appeal is not in order. The Ld.AR also furnished a small synopsis and also enclosed the attachments attached along with the form 35 and therefore the finding of the Ld.CIT(A) that no delay condonation application has been filed is against the facts of the case. Further, the Ld.AR submitted that the notices referred by the Ld.CIT(A) were never received by the assessee and no notice has been received through their email or posted in the regular portal and therefore the dismissal of the appeal by the Ld.CIT(A) is against the principles of natural justice and requires reconsideration. The Ld.AR also relied on the order of the Coordinate Bench of this Tribunal in similar circumstances and prayed to allow the appeal.

The Ld.DR had submitted that the lower authorities had passed the orders in accordance with the provisions of the Act and therefore the same does not require any interference and prayed to dismiss the appeal.

We have heard the arguments of both sides and perused the materials available on record.

From the facts available before us, the assessee is running a multiplexes cinemas and they entered into an agreement with Bigtree Entertainment Pvt. Ltd. for online booking of the tickets and through the tickets booked by Bigtree Entertainment Pvt. Ltd., the assessee had received the ticket fare and also received a percentage in the convenience charges collected by the Bigtree Entertainment Pvt. Ltd. It is also a fact that the said Big Tree Entertainment Pvt. Ltd. had deducted the TDS while making the payment to the assessee in the convenience charges collected by them. The AO had not accepted the case of the assessee and was of the view that the assessee had paid the commission to Bigtree Entertainment Pvt. Ltd. and therefore necessarily TDS u/s. 194H of the Act should be deducted and remitted to the department, which the assessee failed to do so and therefore treated the assessee as assessee in default and proceedings were made. But the assessee had challenged the said order before the Ld.CIT(A), the same was filed with a delay of 608 days and also uploaded the condonation application along with form 35 as evidenced from the documents furnished before us. Unfortunately, the Ld.CIT(A) had observed that the assessee had not filed any such applications to condone such delay and therefore the delay in filing the appeal could not be condoned for want of sufficient cause. The Ld.CIT(A) further observed that the assessee had not appeared to the several notices issued to them and therefore decided the appeal ex-parte and dismissed the appeal. The assessee produced before us the screenshot of the Income Tax portal in which it was clearly mentioned that along with the form 35, the several attachments are uploaded and one of the attachment is the delay condonation application. In spite of the said fact, the Ld.CIT(A) had observed that no condonation application has been filed by the assessee. Further, it is the case of the assessee that they have not received the hearing notices in their email ID and also not available in the portal and therefore they were not able to attend the hearings. In respect of this allegation, no contra evidence was furnished by the other side and therefore in the interest of justice, we are deciding to remit this issue to the file of the Ld.CIT(A) for considering the appeal on merits, since we have satisfied ourselves that the delay has been properly explained. We are also giving liberty to the assessee to produce the evidences and documents to show that the assessee could not be treated as assessee in default under the provisions of the Act.

In the result, the appeal filed by the assessee is allowed for statistical purposes.