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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI RAM LAL NEGI
PER SHAMIM YAYHA, AM
This is an appeal by the assessee directed against order of learned Commissioner of Income Tax (in short ‘the Commissioner’) under Section 263 of the Income Tax Act, 1961 (in short ‘the Act’), by the order dated 31.03.2019 and pertains to Assessment Year 2015-16.
The grounds raised by assessee in its appeal read as under :-
Ground 1 - Erred in concluding that inadequate inquiries were made by the learned AO on payments made to players on winnings from lotteries/crossword puzzles and taxes to be withheld thereon
2 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited i. On the facts and in the circumstances of the case the learned Pr. CIT has legally erred passing the order under Section 263 of the Act in respect of the matter which were not put on notice either in writing or verbally during the revision proceedings which is in contravention of the mandate laid down by the Act rendering the issue of the impugned order under Section 263 of the Act invalid.
ii. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in passing the order under Section 263 of the Act, without providing the Appellant with sufficient and adequate opportunity of being heard and in breach of the principles of natural justice as held by the Apex court.
iii. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally and factually erred placing reliance on the decision Hon'ble Supreme Court of India in the case of Amitabh Bachchan (69 Taxmann.com 170) without considering that the facts in the case therein and case of the Appellant is factually different. In the aforementioned case, the learned AO had granted the Assessee an opportunity of being heard as required by the provisions of the Act, whereas in the instant case, the Appellant was not granted with any opportunity of being heard or argue before the Pr. CIT during the course of revision proceedings.
iv. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in assuming jurisdiction under section 263 of the Act to re-examine the issue and grossly failed to appreciate that it is not permissible to initiate the proceedings under section 263 of the Act on mere fact that in view of Pr. CIT inquiries and verifications which should have been made before allowing the claim of Appellant were not made.
v. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in stating that the order passed by the learned AO is erroneous and prejudicial to the interest of revenue as the learned AO failed to conduct inquiries, without appreciating the fact that appropriate inquiries and verifications with respect to withholding of taxes on payments made towards winnings were made by the learned AO during the course of assessment proceedings.
vi. On the facts and circumstances of the case and in law, the learned Pr. CIT has factually erred in holding that taxes were not withheld on entire amount of payment made towards winning, without appreciating the fact that the Appellant has appropriately withheld taxes on payment made towards winnings where the amount
3 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited payable (net of participation fees) exceeds the threshold of INR 10,000 in case of each game for each player.
vii. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in directing the learned AO to examine whether any payments have been made towards winnings of lotteries or Crosswords Puzzles and to examine the applicability of provisions of Chapter XVII B of the Act without himself examining the matter and recording reasons thereof to conclude that order passed by the learned AO is erroneous and prejudicial to the interest of revenue.
Ground 2 - Erred in directing the learned AO to examine whether any payments were made towards Online Promotional Expenses and applicability of provisions of Chapter XVII B of the Act on said payments if any.
i. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in directing the learned AO to examine whether any payments were made towards Online Promotional Expenses and the applicability of provisions of Chapter XVII B of the Act. Accordingly, the learned Pr. CIT, vide order under Section 263 of the Act, has directed the learned AO in examining the said matter which does not form a part of the show-cause notice. Also, no inquiries were made in respect to said issue during the revision proceedings, and the order under Section 263 of the Act was passed without providing the Appellant with sufficient and adequate opportunity of being heard, thereby breaching the principles of natural justice as held by the Apex court. Accordingly, directions given by learned Pr. CIT to examine the said issue vide order under Section 263 of the Act is invalid and bad in law.
ii. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in directing the learned AO to examine whether any payments were made toward Online Promotional Expenses and applicability of provisions of Chapter XVII B of the Act, without himself examining the matter and recording reasons thereof to conclude that order passed by the learned AO is erroneous and prejudicial to the interest of revenue.
iii. On the facts and circumstances of the case and in law, the learned Pr. CIT has legally erred in directing the learned AO to examine whether any payments were made toward Online Promotional Expenses and the applicability of provisions of Chapter XVII B of the Act without appreciating the fact that there were inquiries made on the matter during the course of assessment proceedings and the Pr. CIT has
4 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited not recorded any finding to conclude that the order/inquiry to that effect made is erroneous.
The brief facts of the case are that in the order passed under Section 263 of the Act, learned Commissioner noted that the assessee company had made the payment of Rs.10,46,35,355/- to Facebook Ireland Ltd. on which TDS was not deducted. Therefore, he was of the opinion that the expenditure was required to be disallowed under Section 40(a)(i) of the Act. However, the Assessing Officer has disallowed the same under Section 40(a)(ia) of the Act. After some discussion on the issue and noting the assessee’s response, the learned Commissioner observed that the revision proceedings under Section 263 of the Act is hereby dropped on this issue. Thereafter, learned Commissioner observed that the assessee company has paid Rs.9,11,45,13,136/- towards winning from lottery or crossword puzzle. This payment was not routed through Profit & Loss Account. The assessee was required to deduct tax @ 30% on the full amount of winnings from lottery which works out to Rs.2,73,43,53,943/-. However, TDS has been deducted at Rs.1,59,40,036/-. (i) the Assessing Officer failed to conduct enquiries and verification why these payments made for winning from lotteries/crossword puzzles were not routed through Profit & Loss Account, (ii) The Assessing Officer also failed to verify why TDS was not deducted on the full amount of payment made and why the deduction should not be disallowed.
The learned Commissioner further observed that the failure by the Assessing Officer to conduct inquiries on the above issue has rendered the order erroneous as well as prejudicial to the interest of revenue. Thereafter, he referred to the following case laws :-
5 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited i) Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC); ii) Bismillah Trading Co. v. Intelligence Officer [2001] 248 ITR 292 (Ker.); iii) Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 (Mad.); iv) Thalibai F. Jain v. Income Tax Officer [1975] 101 ITR 1 (Kar.); v) CIT v. Pushpa Devi [1987] 164 ITR 639 (Pat.); and, vi) Rajmandir Estates Private Limited v. Pr. CIT, 386 ITR 162 (Cal.)
He further observed that it has been held in CIT (Mum) vs. Amitabh Bachchan [2016] 69 Taxmann.com 170 (SC) that “Section 263 does not require any specific show cause notice detailing specific grounds on which revision of assessment order is tentatively being proposed affecting initiation of exercise in absence thereof or to require Commissioner to confine himself to terms of notice and foreclosing consideration of any other issue or question of fact; Commissioner is free to exercise his jurisdiction on consideration of all relevant facts, provided an opportunity of hearing is afforded to assessee to contest facts on basis of which he had exercised revisional jurisdiction.” Thereafter, he concluded as under :-
“8.1 It is therefore, to be examined whether the assessment made by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. Explanation 2 below sub-section (1) of the Section 263 states that :
For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, -
(a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or
6 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.
In view of the above, the order passed by the AO u/s 143(3) dated 15.12.2016 is erroneous as well as prejudicial to the interest of the Revenue and is liable to be set aside.
8.2 In the circumstances, I am satisfied that the Assessing Officer failed to examine why the payments made for winning from lotteries/cross word puzzles were not routed through P & L A/c. and why TDS was not deducted on the full amount of payment made and to this extent, the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of revenue on the issues discussed in the preceding paras.
8.3 In view of the facts, the assessment order passed by the Assessing Officer is hereby set aside on the above issue with the direction to the Assessing Officer to allow an opportunity of being heard to the assessee and pass the order in accordance with law after considering the reply of the assessee. The Assessing Officer is directed to give effect to this order under the guidance/supervision of the Addl. CIT, Range 13(1), Mumbai preferably within a period of three months in accordance with law.
8.4 The Assessing Officer is further directed to examine whether the assessee has made any payment towards winning of lotteries or Crossword Puzzles and on account of Online Promotional Games during the year. If so, the Assessing Officer is then directed to verify whether the assessee has complied with the provisions of Chapter XVII B of the Act. The Assessing Officer is directed to give effect to this order under guidance/supervision of the Addl. CIT, Range-13(1), Mumbai, preferably within a period of 3 months in accordance with law.”
Against this order, assessee is in appeal before us.
We have heard both the parties and perused the records. The learned senior counsel of the assessee, Shri Percy Pardiwala submitted that learned
7 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited Commissioner has erred in invoking the provision of Section 263 of the Act on a different ground and thereafter passing an order of revision in an altogether different issue. He submitted that the case law from the Hon'ble Supreme Court in the case of Amitabh Bachhan (supra), which the learned Commissioner has referred had held that other matters can be examined by Commissioner other than those for which Section 263 notice was issued, provided opportunity is given to the assessee. The learned senior counsel submitted that there has been a serious violation of mandatory requirement, hence the order of Commissioner deserves to be quashed.
Furthermore, learned senior counsel submitted that the issue has been a subject matter of Assessing Officer’s examination. He referred to various pages of the paper book submitted for the proposition that the issue was explained in detail before the Assessing Officer. Learned senior counsel further referred to the concluding portion of the order of Commissioner and observed that the order is completely erroneous and non-sustainable. He submitted that the learned Commissioner has not pointed any error on the part of Assessing Officer or the revenue loss to the Department. The learned senior counsel further relied upon several case laws in support of his propositions.
Per contra, learned Departmental Representative submitted that only the case records can prove whether the assessee’s plea of lack of opportunity on the issue is sustainable or not. He wondered whether various documents which assessee is claiming to have submitted before the Assessing Officer were subject matter of any inquiry by the Assessing Officer. He submitted that the amount involved is huge and it was not reflected in assessee’s financials. That
8 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited the assessee cannot hide behind technicalities. He submitted that there will be no prejudice caused to the assessee if the issue is examined by the Assessing Officer as per the direction of the learned Commissioner. He submitted that merely filing certain documents before the Assessing Officer will not lead to a presumption that it was a requirement of Assessing Officer and he has examined and applied his mind. The learned Departmental Representative further relied upon various case laws in support of his propositions.
The assessee has also filed a written submission. In the written submission, it has been submitted that the principle of natural justice should be followed and assessee must be given an opportunity of being heard. In this regard, following case laws have been referred :-
i) CIT v. Amitabh Bachchan (2016) 384 ITR 200 (SC); ii) CIT v. Electro House (1971) 82 ITR 824 (SC); iii) CIT v. Ashish Rajpal (2010) 320 ITR 674 (Del.); iv) G.K. Kabra (211 ITR 336) (AP); v) Chandan Wood Products (217 ITR 834) (MP); and, vi) A. Kannan v. State of Tamil Nadu (201 ITR 205) (Mad.)
Furthermore, it has been pleaded that when the learned Commissioner revises the order on an entirely different ground, which has not been disclosed to the assessee, proper opportunity to the assessee is a must. In this regard, following case laws have been referred :-
i) Bagsu Devi Bafna v. CIT (62 ITR 506) (Cal.); ii) G.K. Kabra (211 ITR 336) (AP); iii) CIT v. Ashish Rajpal (320 ITR 674) (Del.); iv) CIT v. General Trade Agencies (1973) TaxLR 1383 (Cal.); v) Colonisers v. ACIT (1992) 41 ITD 57 (Hyd. SB); and,
9 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited vi) Union of India v. Tulsiram Patel and Ors. (AIR 1985 SC 1416) (SC)
Further, following case laws have also been referred :-
i) R.B. Shreeram Durga Prasad & Fatechand Nursing Das v. Settlement Commission (176 ITR 169) (SC); ii) Ponkunnam Traders v. Addl. Income Tax Officer (83 ITR 508) (Ker.); iii) Addl. Income Tax Officer v. Ponkunnam Traders (102 ITR 366) (Ker.); iv) Colonisers v. ACIT (41 ITD 57) (Hyd. SB); and, v) Union of India v. Tulsiram Patel and Ors. (AIR 1985 SC 1416)
Thereafter, learned counsel of the assessee has distinguished the following decisions :-
i) Rajmandir Estates (P.) Ltd. (386 ITR 162) (Cal.); ii) Kapurchand Shrimal v. CIT (131 ITR 451) (SC); and, iii) State of U.P. v. Sudhir Kumar Singh (Civil Appeal No. 3498 of 2020)
The learned senior counsel further referred to following case laws :-
i) Ambuja Cement Limited v. CIT (ITA No. 3563/Mum/2016); ii) Damodar Valley Corporation v. DCIT (160 ITD 78) (Kol Trib.); iii) Smt. Shardaben B. Patel v. PCIT (180 ITD 328) (Ahm. Trib.); and, iv) H.M. Mehta v. ACIT (387 ITR 561) (Bom.)
On the merits of the issue of payments towards winning from lottery or crossword puzzles, it has been submitted that learned Commissioner has proceeded on a factually incorrect premise that the Assessing Officer has failed to make necessary inquiries. It has been submitted that the assessee submitted the copy of form 3CD of the Tax Audit report with the Assessing Officer where details pertaining to tax deduction at source as per the provisions of Chapter XVII-B were furnished. The details pertaining to tax
10 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited deduction at source under Section 194B on winning from lottery or crossword puzzles was stated in the table along with the details of amount of payment and tax deduction at source. It is further submitted that Assessing Officer has raised pointed queries and examined the issue and accepted the assessee’s position. It has further been submitted that sufficient detail has been given and due to huge volume of data, same was submitted on sample basis in soft copy in a pen drive to the Assessing Officer. Thereafter, in the written submission various propositions have been given in support of the merits of the issue and following case laws submitted in support of the assessee’s action:-
i) CIT v. Health India TPA Services Pvt. Ltd. (ITA No. 1797 of 2013) (Bom HC); ii) CIT v. M/s. Dedicated Healthcare Services (TPA) India Pvt. Ltd. (ITA No. 1315 of 2015) (Bom HC); iii) M/s. Paramount Health Services (TPA) Pvt. Ltd. (ITA No. 138 of 2016) (Bom HC); iv) Royal Calcutta Turf Club v. DCIT (76 ITD 237) (Cal.); v) Delhi Race Club (1940) Ltd. v. DCIT (108 TTJ 297) (Del.); and, vi) CIT v. Delhi Race Club Limited (ITA No. 128 of 2008) (Del.)
Thereafter, it is submitted that the learned Commissioner allegedly also directed the Assessing Officer to examine whether assessee has made any payment towards winning of lotteries or crossword puzzles during the year inspite of the Assessing Officer having examined the same during the course of regular assessment proceedings. Thereafter, in the written submission, the issue of payment of online promotional games has been dealt with. It has been submitted that the learned Commissioner, in his order, has not pointed out any error in the discharge of withholding obligation; that the issue has been examined in detail by the Assessing Officer; and, that the learned
11 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited Commissioner cannot simply set aside the matter to the Assessing Officer to carry out fresh enquiry/further enquiry.
Thereafter, various case laws have been submitted for the proposition that when proper enquiry has been done by the Assessing Officer, the assessment cannot be termed erroneous and prejudicial under Section 263 for the reason that the learned Commissioner is of the opinion that inquiries carried out were inadequate. In this regard, following case laws have been referred :-
i) CIT v. Gabriel India (1993) 203 ITR 108 (Bom); ii) CIT v. Nirav Modi (2016) 390 ITR 292 (Bom); iii) CIT v. Vikas Polymers (2012) 341 ITR 537 (Del); iv) CIT v. Gabriel India (1993) 203 ITR 108 (Bom); v) DIT v. Jyoti Foundation (2013) 357 ITR 388 (Del); and, vi) Globus Infocom Ltd. v. CIT (2014) 369 ITR 14 (Del)
Furthermore, following case laws have been referred :-
i) Malabar Industries Co. Ltd. v. CIT (2000) 243 ITR 83 (SC); ii) CIT v. Max India (2007) 295 ITR 282 (SC); iii) CIT v. Reliance Communication Ltd., 396 ITR 217 (Bom); and, iv) Spectra Shares & Scrips (P.) Ltd. v. CIT, 354 ITR 35 (AP)
Lastly, it has been submitted that insertion of Explanation 2 by the Finance Act 2015 has not diluted the basic requirement of the section which still needs to be satisfied before invoking the revision jurisdiction. In this regard, following case laws have been relied :-
i) Anil L. Todarwal v. PCIT (ITA No. 3498/Mum/2017) (2018) (Mum); ii) Narayan Tatu Rane v. Income Tax Officer (70 taxman 227) (2016) (Mum); and,
12 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited iii) Torrent Pharmaceuticals Ltd. (173 ITD 130) (Ahm. Trib.)
We have carefully considered the detailed submissions and perused the records. The first challenge before us is that the learned Commissioner had started the revision proceedings on a different ground and has finally passed a revision order on a different ground for which no opportunity was given to the assessee.
It has been settled by the judgment of Hon'ble Supreme Court in the case of Amitabh Bachhan (supra) that such an action is permissible to the Commissioner provided sufficient opportunity is given to the assessee. From the records available before us and the order of learned Commissioner, it is not discernable whether proper opportunity in this regard was given to the assessee. Now, the issue is whether this is fatal to the order of revision ? Another concomitant issue is when the learned Commissioner has not given the opportunity to the assessee and has consequently not examined the assessee’s response, should the Tribunal fill-in the gap and give a finding that the Assessing Officer has duly examined the issue on the basis of document said to have been filed before Assessing Officer.
We find that these issues were examined by Hon'ble Madhya Pradesh High Court in the case of CIT vs. Prem Syndicate, 141 ITR 290 (MP). In this decision, the Hon'ble High Court has duly taken note of Hon'ble Supreme Court decision in the case of CIT vs. Electro House, 82 ITR 824 (SC) and CIT vs National Taj Traders, 121 ITR 535 (SC). We may gainfully refer to paragraph 3 and 4 of the said order as under :-
“3. We have already held relying on the decision of the Supreme Court in CIT v. Electro House [1971] 82 ITR 824, that the question of giving an
13 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited adequate opportunity to the assessee has no impact on the question of jurisdiction of the Commissioner to pass an order under Section. 263(1) of the Act. The question of adequate opportunity will affect only the question of legality of the order of the Commissioner. In such a case, the Tribunal undoubtedly had jurisdiction to remand the matter to the Commissioner and to direct him to dispose of the proceedings under Section 263(1) of the Act, afresh, after giving due opportunity to the assessee. This question came up for consideration before the Supreme Court in CIT v. National Taj Traders [1980] 121 ITR 535. The Tribunal in that case had held that the Commissioner had not conformed to the requirements of natural justice by putting it to the assessee what case it had to meet and by giving due opportunity for explaining the same and the Tribunal, therefore, vacated the order of the Commissioner and remanded the case to him with the observation to dispose it of afresh after giving due opportunity to the assessee. On a reference being made, the High Court held that the Tribunal did not act properly in directing the Commissioner to dispose of the case afresh. On appeal, the Supreme Court held that the order of the Tribunal was proper. It is thus clear that in a case, when the order of the Commissioner under Section 263(1) of the Act is set aside by the Tribunal on the ground that there was no adequate opportunity to the assessee, the Tribunal has jurisdiction to remand the case to the Commissioner for deciding the case afresh in accordance with law.
Learned counsel for the assessee contended that in the instant case, in view of the fact that there was a flagrant violation of the principles of natural justice, the Tribunal did not deem it proper to remand the case to the Commissioner for fresh disposal. This contention is not founded on facts. The decision of the Tribunal flows from the finding of the Tribunal that the order of the Commissioner was void ab initio. That is the only reason given by the Tribunal for not remanding the case to the Commissioner. As the finding of the Tribunal about the jurisdiction of the Commissioner was not justified, it must be held that the Tribunal was not justified in refusing to direct the Commissioner to pass an order under Section 263(1) of the Act, afresh, after giving due opportunity to the assessee. Our answer to question No. (4) referred to us is, therefore, in the negative and against the assessee.”
In this regard the decision of Hon'ble Delhi High Court in the case of CIT vs. DLF Power Ltd in ITA No. 973/2011, order dated 29/11/2011 is also relevant :-
14 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited “11. In the present case, the tribunal has disagreed with the CIT and felt that the Assessing Officer had examined the question and formed an opinion. The finding of the CIT that there was lack of enquiry was incorrect. Thereafter, the tribunal went into the bifurcation of interest income submitted by the assessee and examined it on merits and decided whether or not a particular income qualifies for deduction under Section 80IA. In the said exercise, the tribunal has relied upon submissions made by the assessee and accepted, the bifurcation and nature and character of interest income and then decided whether it qualifies for deduction or not. We do not know on what basis the said bifurcation in respect of the two units and the nature and character of income were accepted. This aspect had not been examined by the CIT, who had given only a tentative opinion that some element of interest income may be eligible. The right and proper course in the present case was to ask the CIT to examine the said factual aspect rather than the tribunal giving their own factual finding without there being factual examination and verification or full and proper rebuttal. Without anything more, the mere submission of a letter to the Assessing Officer giving bifurcation does not necessarily mean that proper verification and investigation was done and accepted. Averments made in the letter have to be verified and then accepted or rejected. If the Assessing Officer keeps a letter on record and does not carry out necessary investigations which are per se required to verify correctness of the averments, there is an error in the sense that he has failed to carry out the requisite enquiry which can be rectified in a revision. It is a different matter if the course adopted by the Assessing officer is permissible, as then there is no error.
In view of the aforesaid, we answer the question of law framed above in negative i.e. in favour of the Revenue and against the assessee. The CIT will pass a fresh order under Section 263 of the Act after hearing the assessee. The contentions and issues raised by the assessee will be dealt with by the CIT. He shall also examine whether the issue in question was raised before the Assessing Officer and considered and verified or the course adopted is permissible. If this is correct, then his jurisdiction will be ascribed and limited to the extent of deciding whether the finding is erroneous i.e. contrary to law etc. In the facts of the case, there will be no order as to costs. Appeal is disposed of.”
15 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited 15. In the background of aforesaid discussion and precedents, including that from the Hon'ble Supreme Court, we find that the plea of the learned counsel of the assessee that the revision order deserves to be quashed for lack of opportunity to the assessee is not sustainable. Furthermore, it is also arising out of the ratio of the aforesaid precedents that when the CIT has not examined the issue, the Tribunal should not jump ahead and examine the issue merely on the basis of document said to have been filed before the Assessing Officer without any indication as to whether the Assessing Officer has verified the correctness of the averments. That merely keeping the document on record, without carrying out necessary investigation which are per se required to verify correctness of the averment would lead to an error, in the sense that he has failed to carry out the requisite inquiry which can be rectified in revision.
Accordingly, in the interest of justice and following the precedent as above, we are of the opinion that this order of the learned Commissioner is liable to be set aside to his file for fresh consideration. The learned Commissioner is directed to examine the issue afresh after giving the assessee proper opportunity of being heard. In giving the above said direction we draw support from the decision of Hon'ble Supreme Court in the case of Kapurchand Shrimal (supra) for the proposition that it is the duty of the appellate authority to correct the errors in the orders of the authorities below and/or remit the matter for reconsideration unless prohibited by law. In this regard, we note that there is no provision in law prohibiting us to remit the matter back to the learned Commissioner on the facts and circumstances of the case. Learned counsel of the assessee has tried to distinguish this decision of the Hon'ble Supreme Court which was put to him during the course of hearing via
16 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited submission that it was in a different context and it has further been submitted that in the present case it is not a case where it is necessary to issue such a direction as an officer of the rank of a Commissioner who must be presumed to know the law and the manner in which he has to exercise his powers and if he acts in flagrant violation of the law he should not be given a second opportunity.
In our considered opinion, the above submission of the assessee’s counsel is not sustainable. We do not find that the aforesaid decision of Hon'ble Supreme Court, by any stretch of imagination, proposes that matters cannot be remanded by the ITAT to the level of Commissioner of income tax. Hence, this limb of argument of the learned counsel of the assessee is rejected. Accordingly, following the aforesaid precedents, including that from the Hon'ble Supreme Court in the case of Kapurchand Shrimal (supra), we set aside this order passed under Section 263 of the Act to the file of the learned Commissioner. The learned Commissioner shall decide the issue afresh giving the assessee proper opportunity of being heard.
In the result, this appeal by the assessee stands allowed for statistical purposes.
Order pronounced under Rule 34(4) of ITAT Rules on 5th January, 2021.
Sd/- Sd/- (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Date : 5th January, 2021 *SSL*
17 ITA No. 3910/Mum/2019 Play Games 24x7 Private Limited
Copy to : 1) The Appellant 2) The Respondent 3) The CIT(A) concerned 4) The CIT concerned 5) The D.R, “C” Bench, Mumbai 6) Guard file By Order
Dy./Asstt. Registrar I.T.A.T, Mumbai