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Income Tax Appellate Tribunal, BANGALORE BENCHES “ C ” BENCH: BANGALORE
Before: SHRI JASON P BOAZ & SHRI PAVAN KUMAR GADALE
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-7, Bangalore passed u/s. 143(3) r.w.s. 144C and u/s. 250 of the Income Tax Act, 1961 (the Act) and raised the following grounds of appeal :
The Brief facts of the case are that the assessee is engaged in Software Development and software products, sales and service and filed the Return of Income for the Asst. Year 2010-11 on 5.10.2010 disclosing NIL income after claiming deduction under Section 10AA of the Act and set off brought forward losses. Subsequently, the assessee filed a revised return on 31.3.2012 and the Return of Income was processed and the case was selected for scrutiny and Notice under Section 143(2) and 142(1) of the Act were issued. In response, the learned Authorised Representative of the assessee appeared from time to time and furnished the clarifications. Since the assessee has international transactions the ld. Assessing Officer with the prior approval of the CIT, Bangalore referred to Transfer Pricing Officer (TPO) and the TPO has passed the order under Section 92CA of the Act on 30.01.2014 with no adjustment in respect of international transactions entered with Associated Enterprises (AEs). The Assessing Officer on perusalof the financial statements found that the assessee has not deducted TDS required under Section 194J of the Act on Audit fee and made addition applying the provisions of Section 40a(ia) of the Act and with other adjustments determined the total income of Rs.NIL after adjusting the depreciation / loss and passed the order under Section 143(3) r.w.s. 144C of the Act dt.17.3.2014. Aggrieved by the CIT (Appeals) whereas the learned CIT (Appeals) concurred with the action of the Assessing Officer and dismissed the assessee's appeal. Aggrieved by the order of the learned CIT (Appeals), the assessee filed an appeal before the Tribunal. 3. At the time of hearing, the ld. AR submitted that the learned CIT (Appeals) has not adjudicated Grounds of appeal
No.1 & 3 in respect of proportionate disallowance of TDS credit and carry forward of losses because the assessee has submitted application for rectification before the Assessing Officer. Similarly CIT (Appeals) confirmed the disallowance of provision for audit fees for non- deduction of tax. The learned Authorised Representative emphasized that the assessee has not paid the amount and accounting entry was reversed in the subsequent assessment year and hence there is no requirement of deduction of TDS and prayed for allowing the appeal. Contra, the learned Departmental Representative supported the orders of CIT (Appeals).
4. We heard the rival submissions and perused the material on record. On the first ground of appeal, the ld. AR submitted that the learned CIT (Appeals) has not adjudicated Ground Nos.1 and 3. The assessee has filed an application for rectification before Assessing Officer and is of the opinion that the assessee intend to withdraw the appeal on above grounds of appeal whereas the learned Authorised Representative vehemently argued that there is no such mention of withdrawal and the assessee has prima facie good case and prayed for one more opportunity before the CIT (Appeals) to substantiate the facts with evidence. We considering the submissions and the findings of the CIT (Appeals), are inclined to provide one more opportunity to the assessee as the CIT (Appeals) has not adjudicated the grounds of appeal in respect of proportionate disallowance of TDS and carry forward of unabsorbed depreciation. Accordingly, we restore these