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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-1, Coimbatore in dated 31.03.2017.
:- 2 -: ITA No.1484/Mds/2017
M/s. Sporting Pastime India Limited, the assessee, is a domestic company. While completing the assessment for assessment year 2013-14, the AO disallowed interest at Rs. 7,66,43,136/- debited in the P&L account @ 15% on Rs. 25 crores from the period 21.01.2011 to 04.02.2013 stating that it is in the nature of penalty. On an appeal, the CIT(A)-1, Coimbatore dismissed the appeal. Aggrieved against that order, the assessee filed this appeal stating, inter alia; that the CIT(A) passed the order without giving adequate opportunity to the assessee, the CIT(A) went wrong in holding that the interest paid is penalty for violation of law, the CIT(A) failed to note that the order of the statutory authority could not be complied with because of the orders passed by the Income Tax Department attaching the fixed deposit made by the assessee with State Bank of India, the assessee paid the interest pursuant to the orders of the High Court on the amounts used for business and therefore it is clearly a business expenditure and the C'sIT(A) finding spring from an incorrect appreciation of facts etc.
The AR invited out attention to Para 39 of the order of the Company Law Board in C.P. No. 50/2005 dated 09.10.2006. The relevant portion is extracted as under:
“39. The aforesaid attachment orders and restrain order shall be withdrawn on deposit of Rs. 78,45,50,000/- with the Canara Bank in terms of the order dated 18th November, 2005. The said amount must be deposited immediately in terms of the said order and latest by or before 31st March, 2011. The attachment orders in respect of the bank
:- 3 -: ITA No.1484/Mds/2017 accounts and fixed deposits or other deposits will not come in the way of depositing payments. In case deposit is not made by 31st March, 2011, the parties concerned will be liable to pay interest @ 15% per annum with effect from the date of passing of this order. The question of payment of interest for past period is for the time being left open.”
The assessee submitted that in pursuance of the above direction only the assessee paid interest and hence, the interest is allowable. The AR sought our attention to Para 3 to 6 of the CIT(A) order which is extracted as under:
“3. In this case hearing notice was issued on 02.03.2017 posting the case for hearing on 22.03.2017. The assessee filed a letter dated 22.03.2017 requesting that the hearing may be postponed for 30 days due to non availability of their authorized representative. The case was then posted for 31.03.2017 vide this office letter dated 22.03.2017 clearing indicating therein that this is a high demand case with a total demand of Rs. 3,52,16,560/- which is a priority of CBDT, New Delhi for disposal. It was also clearly indicated in the letter that no further adjournment will be granted in the case.
4. The assessee filed a letter dated 31.03.2017 signed by a Authorized Signatory of the assessee Company who has not identified himself and who requested two more months time for representing the case 5. It is to be noticed that the assessment order has been passed on 30.03.2016 and the assessee filed appeal on 25.04.2016. Even after the expiry of nearly one year the assessee has not appointed an Auditor to represent their case 6. In view of lack of representation from the assessee, I am constrained to complete the appellate proceedings with the materials available on record.”
:- 4 -: and submitted that the CIT(A) has not given adequate opportunity. Per contra, the DR relied on the orders of the AO/CIT(A).
We have considered the rival submissions. We find that all the facts relating to the assessment is not emanating from the orders of the AO/CIT(A) and hence, these issues are restored to the AO for re-adjudication after giving adequate opportunity to the assessee. The AO shall pass a speaking order.
In the result, the assessee’s appeal is allowed for statistical purpose.
Order pronounced on Monday, the 19th day of June, 2017 at Chennai.