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Facts
The assessee company, part of Tyco Group, entered into service agreements with foreign entities for management services. The AO initiated proceedings under Sections 201(1) and 201(1A) for failure to deduct TDS, stating payments to these entities were for technical services. The assessee contended these payments did not qualify as fees for technical services under DTAAs.
Held
The Tribunal held that the CIT(A) dismissed the appeal solely on grounds of delay without deciding on merits. The Tribunal decided to remit the issue back to the CIT(A) to decide the appeal afresh after the assessee proves the service date of the assessment order and pays costs.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal on grounds of delay without deciding on merits? Whether the payments made to foreign group entities qualified as fees for technical services under relevant DTAAs?
Sections Cited
201(1), 201(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
Assessment year : 2014-15 The Deputy Commissioner Tyco Fire & Security India of Income Tax, Private Ltd., International Taxation, D-601, Campus 6th Floor, Circle 2(2), RMZ Centennial, Kundanahalli, Vs. Bangalore. Main road, Mahadevapura S.O., Bengaluru North. PAN: AABCT 0087C APPELLANT RESPONDENT Appellant by : Shri Ninad Patade, AR Respondent by : Dr. Divya K.J., CIT(DR)(ITAT), Bengaluru. Date of hearing : 08.07.2025 Date of Pronouncement : 20.08.2025 O R D E R
Per Soundararajan K, Judicial Member
This appeal filed by the assessee is challenging the order of the ld. CIT(Appeals), National Faceless Appeal Centre, Delhi (NFAC) dated 20.12.2024 in respect of assessment year 2014-15.
The brief facts of the case are that the assessee is a company and a part of Tyco Group which is a leader in global fire safety and security solutions having more than 1,000 locations all over the world. During the assessment year, the assessee had entered into service agreements with Tyco Fire & Security Asia, Singapore and Tyco International Management Company LLC to receive certain management services. The assessee remunerates such entities. Based on the information, the AO proceeded to pass an order u/s. 201(1) & 201(1A) of the Income Tax Act, 1961 [the Act] considering the assessee in default for the reason that the assessee had not deducted TDS while making payments to the said concerns. The assessee contended that remuneration given to the said entities would not qualify as fees for technical services / fees for included services under the India-Singapore and India-US DTAAs and therefore there is no default on the part of the assessee in not deducting TDS. The AO has not accepted the said claim and therefore the assessee had challenged the said order before the ld. CIT(Appeals).
The ld. CIT(A) based on Form 35 filed by the assessee had come to the conclusion that the AO had passed the order on 31.3.2021 whereas the appeal was filed on 01.10.2022 and therefore there is a delay in filing the appeal for which the assessee has not filed any application for condonation of such delay and therefore communicated the assessee that necessary application has to be filed for the said delay. The assessee had not responded to the said notices, but only sent a communication requesting for adjournment till 15.1.2025 for filing written submissions. Therefore the ld. CIT(A) was of the view that the assessee had not explained the reasons for such delay and also not filed any application to condone the said delay, therefore the ld. CIT(A) has rejected the request for time to file the written submissions and dismissed the appeal on the ground of delay and also on the ground of filing incorrect particulars in col. 14 of Form 35. As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the ld. AR submitted that even though the AO had passed the order on 31.03.2021, the said order was communicated to the assessee on 02.09.2022 and the appeal was filed on 01.10.2022 within 30 days from the date of service of the order and therefore there was no delay in filing the appeal before the ld. CIT(A). The ld. AR further submitted that the assessee is having a good case on merits, if the DTAA of Singapore & USA was considered by the authorities. The ld. AR finally prayed an opportunity to appear before the ld. CIT(A).
The ld. DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both the parties and perused the material available on record. We have gone through Form 35 filed by the assessee in which in col. 14 assessee has mentioned that there was no delay on the ground that the order of the AO was served on 02.09.2022, even though the order was dated 31.3.2021. Inspite of several notices pointing out the said defect by the ld. CIT(A). the assessee has not explained the facts before the ld. CIT(A), but sought an adjournment for filing the written submissions. The ld. CIT(A) at the first instance has to decide the admissibility of the appeal since the order under appeal is dated 31.03.2021 whereas the appeal was filed on 01.10.2022 and after satisfying himself that the order was served on 02.09.2022, the ld. CIT(A) could have admitted the appeal and granted time for filing the written submissions. Even though the said defect was communicated to the assessee, the assessee has not filed any application to condone the said delay or not filed any Affidavit showing that the order was served on 02.09.2022. In such circumstances, the ld. CIT(A) has no other way, except to reject the appeal filed by the assessee.
Before us, the ld. AR submitted that the order was served on the assessee on 02.09.2022 and the assessee is having evidence to show that the same was served on the above mentioned date. No doubt the assessee has not submitted any details before the ld. CIT(A), except Form 35 filed by the assessee in which the assessee has stated that there was no delay in filing the appeal. This fact should be ascertained by producing the relevant material and thereafter only the merits of the issue can be decided by the ld. CIT(A).
Considering the facts and circumstances of the case and also the fact that the appeal was not decided on merits, we deem it fit to remit this issue to the file of the ld. CIT(Appeals) with a direction to the assessee to place all the material before the ld. CIT(A) and prove that the assessment order was served on 02.09.2022. Thereafter, if necessary, the assessee can also file an application to admit the appeal or to condone the delay, if any, and the ld. CIT(A) would decide the issue afresh on merits, after hearing the assessee. We are giving this concession to the assessee on the condition that assessee should pay a sum of Rs.20,000/- (Rupees Twenty Thousand Only) to the Income Tax department towards costs and produce the receipt for payment of said costs to the ld. CIT(A) at the time of adjudicating the appeal.
In the result, the appeal of the assessee is allowed for statistical purposes. Pronounced in the open court on this 20th day of August, 2025.