INFOVISION LABS INDIA PRIVATE LIMITED,PUNE vs. DY. CIT, CIRCLE 1(1), PUNE

There is a delay of 340 days in filing of the appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.1,20,44,307/- made by the Assessing Officer u/s 194J of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) in respect of payments for professional / technical services.

Facts of the case, in brief, are that the assessee is a private limited company which is a fully owned subsidiary of InfoVision Inc., USA and having primary focus on enterprise applications and technology solutions. It also prvides consultancy for Designing, Development and Testing Services for Digital platforms and Mobile Web-based software developments. For assessment year 2021-22 the assessee filed its return of income on 15.03.2022 declaring total income of Rs.8,46,29,670/-. The case of the assessee was selected for complete scrutiny under CASS for the reason that “Large payments made under section 194J to persons who have not filed return of income in comparison to total payments on TAN corresponding to PAN in Form 26Q for section code 194J”. Statutory notices u/s 143(2) and 142(1) of the Act along with a questionnaire were issued and served upon the assessee in response to which the assessee filed certain details before the Assessing Officer but failed to provide documentary evidences like bank statement, ledger, confirmations, invoices etc in support of the genuineness of the impugned transactions pertaining to the payment of fees for professional / technical services u/s 194J of the Act amounting to Rs.4,48,67,665/-. Since the assessee failed to provide confirmation of accounts in respect of four parties who have received large payments from the assessee but were non-filers and lack of non-

Before the Ld. CIT(A) / NFAC there was non-compliance to the notices of hearing and the Ld. CIT(A) / NFAC dismissed the appeal of the assessee for non- prosecution.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee submitted that non-compliance before the Ld. CIT(A) / NFAC was not intentional but occurred due to unavoidable circumstances. He submitted that the financial controller of the assessee company had resigned during the relevant time and no one was looking after the tax matters. He submitted that the assessee has a strong case on merits and humbly prayed that in the interest of justice, the matter may be restored to the file of the Ld. CIT(A) / NFAC.

The Ld. DR on the other hand supported the order of the Ld. CIT(A) / NFAC and submitted that despite several opportunities granted by the Ld. CIT(A) / NFAC, the assessee failed to appear. Therefore, the Ld. CIT(A) / NFAC was justified in dismissing the appeal.

We have heard the representatives of the parties, perused the material available on record and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find that due to lack of documentary evidence filed by the assessee in support of its claim, the Assessing Officer completed the assessment by making addition of Rs.1,20,44,307/- vide order dated 29.12.2022. The Ld. CIT(A) / NFAC has passed the impugned order ex-parte qua the assessee due to non-compliance to the various notices of hearing issued by him to the assessee. Before us the Ld. Counsel for the assessee has submitted that non-compliance before the Ld. CIT(A) / NFAC was not intentional but resulted on account of reason cited above. A perusal of the order of the Ld. CIT(A) / NFAC reveals that the Ld. CIT(A) / NFAC has applied the decision of Hon’ble Supreme Court in the case of CIT vs. Hon’ble Bombay High Court in the case of Bhattacharjee & Another reported in 118 ITR 461 (SC) and various other decisions and dismissed the appeal of the assessee for non-prosecution. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details / documents. It is also his submission that the Ld. CIT(A) / NFAC has not decided the issue on merit and dismissed the same for want of prosecution.

A perusal of the order of the Ld. CIT(A) / NFAC shows that the Ld. CIT(A)/ NFAC has not decided the appeal on merit but has simply dismissed the same for want of prosecution. The provisions of section 250(6) of the Act read as under: “250(1). … (6) The order of the [Joint Commissioner (Appeals) or the] Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.”

Since it is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant a reasonable opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law by passing a speaking order. The assessee is also hereby directed to submit the requisite details before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.