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Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD
PER A. MOHAN ALANKAMONY, A.M:
This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi in DIN No. ITBA/NFAC/S/250/2021-22/1034328026(1), dated 20/07/2021 passed U/s. 201(1A) r.w.s 250(6) of the Act for the A.Y. 2017-18.
The assessee has raised nine grounds in its appeal, and they are extracted herein below for reference:
“1. The order of the Ld. CIT(A) is erroneous both on facts and in law.
The Ld. CIT(A) erred in confirming the demand raised U/s. 201(1) of the IT Act. 3. The Ld. CIT(A) ought to have considered the fact that the recipients have filed the returns of income and paid the taxes and that, therefore, in respect of the amount of tax demanded U/s. 201(1), the appellant cannot be treated as an assessee in default. 4. The Ld. CIT(A) ought to have seen that the Assessing Officer himself vide rectification order U/s. 154 dated 3/5/2019 deleted the demand raised U/s. 201(1) of the IT Act and demanded only the interest charged U/s. 201(1A) of the Act. 5. The Ld. CIT(A) ought to have considered the fact that the appellant had rightly applied the provisions U/s. 194J of the Act and deducted tax at 10% of the commission paid to the Directors as the amount of commission does not form part of the salary. 6. The Ld. CIT(A) ought to have considered the fact that the provisions U/s. 194J(1)(ba) was introduced into the income tax by Finance Act, 2012 wherein it is mentioned clearly that the amount of remuneration and commission paid to the Directors by the company would be governed by the provisions U/s. 194J of the Act. 7. The Ld. CIT(A) erred in confirming the charging of interest U/s. 201(1A) of the Act. 8. The Ld. CIT(A) ought to have seen that the interest charted is reduced vide rectification order U/s. 154 of the Act dated 3/5/2019 and therefore, the issue of tax demanded U/s. 201(1) should have been held in favour of the appellant. 9. The Ld. CIT(A) erred in accepting the view taken by the Assessing Officer that the deduction of tax at source has to be made U/s. 192 of the Act without considering the fact that the deduction is either to be made U/s 194H or U/s. 194J which works out to 10% of the amount. 10. Any other ground or grounds that may be urged at the time of hearing.”
At the outset, the Ld. AR submitted before us that there is a delay of 66 days in filing the appeal before the Tribunal. In this regard, the Ld. AR stated that the appeal was filed beyond the prescribed time limit due to pandemic situation prevailed during the relevant period. Therefore, it was pleaded, that the delay of 66 days in filing the appeal before the Tribunal may be condoned.
On perusal of the submissions of the Ld. AR, We are of the view that the reason adduced by the Ld.AR appears to be genuine because during the relevant period the city was under the gloom of pandemic and therefore the assessee was prevented by a reasonable cause for filing the appeal within the stipulated time. Therefore, relying on the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. MST. Katiji & Ors (167 ITR 471) (SC), in the interest of justice, We hereby condone the delay of 66 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits.
The brief facts of the case are that the assessee is a company carrying on business of Software Application/Development. A survey action U/s. 133A(2A) was conducted in the assessee’s case on 27/11/2018. During the course of survey, the Ld. ACIT, TDS, Circle- 1(1), Hyderabad observed that the assessee had debited expenses in the form of ‘commission’ to its Directors and deducted TDS @ 10% under the provisions of section 194H of the Act. However, the Ld. A.O. opined that the payments made by the assessee should be treated as salary and therefore the provisions of section 192 of the Act will be attracted which calls for TDS at higher rate as against deduction of TDS @ 10% deducted by the assessee. Accordingly, the Ld. A.O. treated the assessee as ‘an assessee in default’ invoking the provisions of section 201(1) of
the Act and raised demand of Rs. 47,49,909/- U/s. 201(1) and Rs. 59,37,384/- U/s.201(1A) of the Act. Aggrieved, assessee filed an appeal before the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi. On appeal, the Ld. CIT(A) confirmed the order of the Ld. CIT(A). Aggrieved by the order of the Ld. CIT(A), NFAC, Delhi, the assessee is in appeal before the Tribunal.
Before us, the Ld. AR submitted that Ld. CIT(A) did not consider the written submissions filed by the assessee and therefore, the appeal may be remitted back to the file of the Ld. CIT(A) in order to provide one more opportunity to substantiate its case in an effective manner. On the other hand, the Ld. DR vehemently argued against the submissions of the Ld. AR and supported the orders of the Ld. Revenue Authorities.
We have heard the rival submissions and carefully perused the materials on record. On examining the order of the Ld. CIT(A), it appears that the Ld. CIT(A) did not consider the written submissions made by the assessee while dismissing the assessee’s appeal. It is also apparent that there is no discussion about the rectification order U/s. 154, dated 3/5/2019 issued by the ACIT, TDS, Circle-1(1), Hyderabad which implies that without considering the submissions of the assessee, the Ld. CIT(A) had disposed off the appeal. Therefore, considering the facts and circumstances of the case as well as the issues involved in the appeal, in the interest of justice, we hereby remit the matter back to the
matter to the file of Ld. CIT(A) in order to provide one more opportunity to the assessee of being heard. We also hereby direct the assessee to promptly cooperate before the Ld. CIT(A) failing which, the Ld. CIT(A) shall be at liberty to pass appropriate order in accordance with law and merit based on the materials available on record.
In the result, appeal of the assessee is allowed for statistical purposes as indicated herein above.
Pronounced in the open Court on 22nd February, 2022.
Sd/- Sd/- (DUVVURU RL REDDY) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated:22nd February, 2022. OKK Copy to:- 1) Appellant: iConcempt Software Services Private Limited, Cyber Gateway, Block-C, Level-1, Wing-1, Unit-A, L & T Infocity, Hitec City Madhapur, Hyderabad – 500 081. 2) Asst. Commissioner of Income Tax, TDS, Circle-1(1), IT Towers, AC Guards, Masab Tank, Hyderabad-500 004. 3) The CIT(A), National Faceless Appeal Centra (NFAC), Delhi. 4) The DR, ITAT, Hyderabad 5) Guard File 6)