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Income Tax Appellate Tribunal, BENGALURU BENCH B, BENGALURU
Before: SHRI. A. K. GARODIA & SHRI. LALIET KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER (Assessment Year : 2014-15) Euromonitor Research & Consulting (India) P. Ltd, Unit N 1503, 15th floor, World Trade Centre, Brigade Gateway Campus, 26/1, Dr. Rajkumar Road, Bengaluru 560055 .. Appellant PAN : AACCE7021L v. Asst. Commissioner of Income-tax, Circle – 2(1)(2), Bengaluru .. Respondent Assessee by : Shri. Rishi Harlalka, CA Revenue by : Shri. R. N. Siddappaji, Addl. CIT Heard on : 05.02.2019 Pronounced on : 06.02.2019 O R D E R
PER LALIET KUMAR, JUDICIAL MEMBER :
This is an appeal filed by the assessee against the order of the CIT (A)-2, Bengaluru, dt.15.12.2017, for the assessment year 2014-15.
ITA.970/Bang/2018 Page - 2
The assessee has raised the following grounds of appeal :
The assessee has also raised an additional ground, which is as follows :
3. The assessee is in appeal before us against the ex-parte order passed by the CIT (A). In para 3 the CIT (A) has observed as under:
The case was posted for hearing on 11.9.2017. The appellant sought adjournment vide letter dated 11.9.2017 on the pretext that the AR is travelling. The case was re-posted for hearing on 20.9.2817. Again, the appellant sought adjournment on the pretext that the AR ITA.970/Bang/2018 Page - 3 is travelling. At its request the case was again posted for hearing on 27,10,2017. In response to the said hearing notice, the appellant filed e request letter for adjournment on the ground that requisite documents were being collated. At its request the case was adjourned to 22.11.2917. In response the appellant further filed request letter for adjournment on 21.11,2917 on the same pretext that still in the process of collating the requisite documents. Based on the said request the case was posted for hearing on 11.12.2017 which was conveyed to the appellant as a final opportunity. However, the appellant has again filed another letter seeking adjournment.
From the above, it is clear that the appellant is not keen to pursue its appeal and indulging in dilatory tactics wasting the precious time and resources of this office. Considering the same, I proceed to dispose of the appeal without giving any further opportunity based on the materials available on record.
It is submitted by the Ld. AR that the assessee was collecting the records pertaining to disallowance made by the AO of Rs.3 lakhs and therefore the authorised representative was that able to appear before the Commissioner. Further on instructions it was submitted that the assessee is not pressing the ground in respect of disallowance of Rs.3 lakhs.
Further it was submitted that the CIT (A) has not decided the issue which was raised by the assessee for the first time before the CIT (A) in respect of the Management Fees and the Commissioner had dismissed the ground of the assessee on the premise that the assessee has not raised this ground before the AO. It was submitted by the Ld. AR that it was incumbent upon the CIT (A) to decide the issue on merit the issue of taxability of Management Fees. The Ld. AR relied upon the following decisions:
ITA.970/Bang/2018 Page - 4 • National Thermal Power Co. Ltd v. CIT [(1998) 229 ITR 383 (SC)] • Nathpa Jhakri Joint Venture v. ACIT [(2010) 37 SOT 160-Mum] • CIT v. Jai Parabolic Springs Ltd [(2008) 172 taxman 258 (Del)] It was submitted that the assessee has wrongly claimed the deduction before the AO, is not a ground to deny the adjudication of the ground by the first appellate authority as the proceeding before the CIT (A) is a continuation of the assessment proceedings and it was the duty of the CIT (A) to adjudicate the grounds raised before it in respect of the taxability or non-taxability of Management Fees. It is submitted that the purpose of proceedings before the AO / CIT (A) / ITAT is to determine the taxable income and there is no adversary litigation between the Revenue and the assessee.
On the other hand the Ld. DR has submitted that the assessee despite granting of adequate opportunity has not come forward to make the submission before the CIT (A) and it was the further case of the Ld. DR that once the assessee has admitted and disallowed the claim u/s.40(a)(i) of the Act, before the AO, it is not open for the assessee to take a contrary stand before the CIT (A).
We have heard the rival submissions and perused the record. At this juncture, we may mention that we are disinclined to sustain the preliminary objection taken by the Ld. DR that the assessee should be prohibited from 2nd innings before the CIT(A). It goes without saying that the object of assessment is to determine the income in respect of which the assessee is rightly chargeable to tax. As the income not originally offered for taxation, if otherwise chargeable, is required to be included in the total income, in the ITA.970/Bang/2018 Page - 5 same breath, any income wrongly included in the total income, which is otherwise not chargeable, should be excluded. There can be no estoppels against the provisions of the Act.
07 Para 3 of the CIT (A) reproduced hereinabove, speaks volumes about the conduct of the assessee, more particularly when the assessee is represented by a battery of good lawyers and also by the chartered accountants of reputed consultancy firms. We fail to understand under what circumstances the assessee was given to understand that the management fees are not taxable by the assessee and the assessee has wrongly disallowed the same in the return of income. We also fail to appreciate that a consultancy firm which is representing the assessee, despite knowing very well about the date of hearing fails to appear before the CIT (A). From a perusal of the Para 3 of CIT (A), it is clear that sufficient opportunities were granted to the assessee to file its response. However we also find that the assessee has continuously sought time on four occasions without any justifiable reason. In the absence of adequate cooperation by the ARs of the assessee, the CIT (A) had no option but to proceed on the basis of the materials available on record. Invariably, we would have been dismissing such requests for granting one more opportunity to the assessee for appearance before the CIT(A). However considering the fact that a legal issue about the Inter group Management Services had not been adjudicated by the CIT (A), in the interest of justice and considering the totality of facts, we remand the matter relating to Intergroup Management Services, back to the file of the CIT (A), subject to the payment of ITA.970/Bang/2018 Page - 6 cost of Rs 2,00,000/- or equivalent to Fees paid by the assessee to its consultancy firm for pursuing the appellate proceedings before the CIT(A), whichever is lower. We further direct the assessee to deposit the same amount equivalent to the legal fees into the account of the Chief Minister’s Relief Fund.
08 . We may observe that whenever the assessee wishes to raise any ground which is not emanating from the order passed by the assessing officer, in that eventuality, the assessee should raise additional grounds before the Commissioner. In the present case the needful had not been done by the assessee therefore the Commissioner was having no option but to decide the ground based on the material available and in accordance of the. Since now the assessee has requested before us that the ground raised by the assessee before the Commissioner may be treated as an additional ground, we find no reason to decline this request, therefore we direct the Commissioner to entertain ground as an additional ground and pass appropriate order in accordance with law as deem fit.
In this view of the above we remand the matter to the file of the Commissioner to decide the issue afresh after holding denovo appellate proceedings and The CIT (A) shall admit the additional ground of 40(a)(i) in accordance with law and the CIT (A) shall consider the material produced before him in accordance of law with law. Needless to say the assessee shall appear on each and ITA.970/Bang/2018 Page - 7 every date fixed by the Commissioner and file the documents / reply as and when called upon by the Commissioner.
In the result, appeal of the assessee is allowed for statistical purposes.