EPITOME RESEARCH SERVICES LLP ,MUMBAI vs. INCOME TAX OFFICER WARD 20(3)(1), MUMBAI

Assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case, and also in law, the Ld. FAA erred in confirming the AO's Order u/s.201(1) holding the appellant an assessee-in-default for not deducting tax at source u/s.195 of Rs. 10,43,449/- from the foreign remittance of Rs. 1,00,33,169/- made to Lucid Holding LLC, treating the said foreign remittance as chargeable to tax in India. Your appellant, therefore, prays that the demand of tax of Rs. 10,43,449/-raised u/s.201(1) be cancelled. 2. On the facts and in the circumstances of the case, and also in law, the learned FAA erred in confirming the levy of interest u/s.201(1A) of Rs.6,47,778/- consequent to confirming the AO's Order u/s.201(1) referred to in Ground No. 1 above. Your appellant, therefore, prays that the interest of Rs.6,47,778/- charged u/s.201(1A) be cancelled. 3. At the outset, we note that there is a delay of 60 days in filing the present appeal before the Tribunal for which petition of condonation of delay along with affidavit is placed on record. Explanation given by the assessee in the affidavit regarding the delay of 60 days is mainly on account of email ID used which belonged to its Accounts Manager. However, all the emails addressed to the said email account got delivered to spam folder including the order so issued which remained to come to the knowledge of the assessee. Subsequently, designated partner of the assessee received a notice for recovery of outstanding TDS demand on his personal mail ID because of which the portal of the Department was accessed. This event led to the assessee to know about the disposal of the first appeal which had been sent to the email ID of its Accounts Manager. Thereafter, appropriate actions were taken to file the appeal before the Tribunal and hence a delay of 60 days.

We have considered the submissions made in this regard and find it appropriate to condone the delay and take up the matter for adjudication. We also note that the first appellate order is an ex parte order wherein several opportunities were given to the assessee, fixing the dates for hearing but no compliance was made. This compelled the ld. CIT(A) to pass the ex parte order as sufficient opportunity have been provided who decided on the merits based on the documents available on record. He thus, sustained the stance taken by the ld. Assessing Officer and dismissed the appeal of the assessee.

We note that the impugned order against which the appellate proceedings have been taken by the assessee is passed u/s. 201(1)/201(1A) r.w.s. 195 alleging that assessee has made payments of Rs. 1,00,33,169/- to tax residents of USA in respect of R&D charges on which TDS has not been done. Even before the ld. Assessing Officer, assessee could not furnish the required documentary evidences to justify for not doing TDS compliance on the foreign remittance made by it.

Before us, ld. Counsel for the assessee gave an assurance of making all the necessary compliances before the ld. CIT(A) once an opportunity is given by remitting the matter back to the file of ld. CIT(A). Ld. Sr. DR candidly left the matter to the discretion of the Bench. Considering the submission made by the ld. Counsel, in the interest of justice and fair play, we find it appropriate to remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication.

Needless to say, assessee be given reasonable opportunity of being heard to make all relevant submissions as required, to substantiate the claim made by it. We also direct the assessee to be diligent in making all its submissions, so as to comply with the notices for hearing for effective and expeditious disposal of the proceedings. Adjournments should not be sought unless warranted by compelling and justifiable reason. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purpose.