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�नधा�रती क� ओर से/ Assessee by : Shri Rishabh Shah (AR) राज�व ओर से / Revenue by : Shri Vishwas Mundhe (DR) सुनवाई क� तार�ख / Date of Hearing : 03-01-2017 घोषणा क� तार�ख / Date of Pronouncement : 05-01-2017 आयकर अ�ध�नयम, 1961 क� धारा 254(1) के अ�तग�त आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) Per Pawan Singh, J.M. �या�यक सद�य iou iou iou �संह के अनुसार: iou 1. These two appeals are filed by assessee u/s. 253 of the Income-tax Act against the two separate order of ld. Commissioner of Income-tax (Appeals)-14, Mumbai (for short the CIT(A) dated 18.03.2014 for Assessment Year (AY) 2008-09 & 2009-10. In both the appeals, common grounds of appeal are raised, thus, both the appeal(s) were clubbed, heard together and are being decided by common order.
2. In the assessee has raised the following grounds of appeal: 1) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in passing the ex-parte order without providing the sufficient opportunity of being heard to the appellant. 2) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in passing the order u/s.201 (1)/201(1A) of the Income Tax Act, 1961 by raising a demand of Rs. 35,917/- on account of alleged non deduction of TDS on the Training Expense of Rs.2,42,000/-, without considering the facts and circumstances of the case. 3) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in not confirming the action of Learned Assessing Officer in treating the appellant in default for Non deduction of TDS on Training Charges of Rs.2,42,000/ - without 2 & 3560/M/2014 M/s SSJ Finance & Securities Pvt. Ltd. appreciating the fact that Hon'ble CIT(A) had already vide order dated 20.05.2011 granted the relief to the assessee that no TDS is required to deducted on the training charges of Rs.2,42,000/-.
In the assessee has raised the following grounds of appeal: 1) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in passing the ex-parte order without providing the sufficient opportunity of being heard to the appellant. 2) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in passing the order u/s.201(1) /201(1A) of the Income Tax Act,1961 by raising a demand of Rs.5,86,882/- on account of alleged Short Term payment of TDS without appreciating the fact that the TAN no MUMS45801A is not belonged to the appellant, (the appellants filed the TDS return under the TAN no MUMS27792C) which is bad in law and required to be quashed immediately. 3) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in treating the appellant in default for Short payment of TDS on transaction charges paid to NSE without appreciating the fact that the appellant had already deducted the TDS @10.3% i.e Rs.4,46,525/- on the payment of transaction charges of Rs.43,35,196/-. 4) On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in treating that the assessee is liable to deduct the TDS of Rs.16,69,196/- on payment on account of Transaction Charges, without considering the facts and circumstances of the case.
4. First we shall take up , ld. Authorized Representative (AR) of the assessee has argued that the CIT(A) passed the order ex-parte and no fair and proper opportunity was given and argued that similar order was passed in violation of principle of natural justice. The Ld. AR of assessee further argued that the case was fixed on 11.03.2014 before the ld. CIT(A) and the assessee filed an application for seeking adjournment. The assessee was informed in writing on the application that a fresh notice would be given to the assessee. However, no notice for fresh hearing was issued and the order was passed without giving any further notice. The Ld. AR of the assessee filed copy of the application, which filed before the ld. CIT(A) with a writing “fresh notice would be given”. Copy of which was shown to the ld DR. The ld AR prayed that the case may be restored to the file of CIT(A) for fresh finding on merit. On the other hand the ld. Departmental Representative (DR) for Revenue supported the order of authorities below.
We have considered the rival contention of the parties and seen the order of ld. CIT(A) and noticed that ld. CIT(A) has recorded that non-appeared on behalf of assessee. Considering the contention of ld. AR of the assessee that no fair and proper opportunity was given to the assessee. The assessee was not given further notice after 11.03.2014. Considering the Principle of Natural Justice, we deem it appropriate to restore all the grounds of appeal to the file of ld. CIT(A) to decide the case afresh. Needless to say that ld. CIT(A) shall grant 3 & 3560/M/2014 M/s SSJ Finance & Securities Pvt. Ltd. adequate and sufficient opportunity before passing the order and further allowed to file further information or document, if required by assessee.
6. With these observations, appeal of the assessee is allowed for statistical purpose. ITA No. 3560/Mum/2014 7. The Ld. AR of the assessee during the argument made the statement that he is not pressing ground no.2 & 3 raised in the present appeal. Further the ld. AR of the assessee not argued anything against ground no.1. Thus, the ground No.1is treated as not pressed and ground no.2 and 3 are also dismissed as not pressed.
Ground No.4 relates to non-deduction of TDS on account of payment of transaction charges. The ld. AR of the assessee argued that this ground of appeal
is covered in favour of assessee by the decision of Hon’ble Apex Court CIT vs. Kotak Securities [(383 ITR 01 (SC)]. The ld. DR for the Revenue has not disputed the factual matrix of the case.
9. We have considered the rival contention of the parties and seen that the Hon’ble Apex Court while considering the scope of section 194J, made the following order: “8. A reading of the very elaborate order of the Assessing Officer containing a lengthy discourse on the services made available by the Stock Exchange would go to show that apart from facilities of a faceless screen based transaction, a constant upgradation of the services made available and surveillance of the essential parameters connected with the trade including those of a particular/ single transaction that would lead credence to its authenticity is provided for by the Stock Exchange. All such services, fully automated, are available to all members of the stock exchange in respect of every transaction that is entered into. There is nothing special, exclusive or customised service that is rendered by the Stock Exchange. "Technical services" like "Managerial and Consultancy service" would denote seeking of services to cater to the special needs of the consumer/user as may be felt necessary and the making of the same available by the service provider. It is the above feature that would distinguish/identify a service provided from a facility offered. While the former is special and exclusive to the seeker of the service, the latter, even if termed as a service, is available to all and would therefore stand out in distinction to the former. The service provided by the Stock Exchange for which transaction charges are paid fails to satisfy the aforesaid test of specialized, exclusive and individual requirement of the user or consumer who may approach the service provider for such assistance/service, It is only service of the above kind that, according to us, should come within the ambit of the expression "technical services" appearing in Explanation 2 of Section 9(1)(vii) of the Act in the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered or available which would not be covered by the aforesaid provision of the Act.
9. There is yet another aspect of the matter which, in our considered view, would require a specific notice. The service made available by the Bombay Stock Exchange [BSE Online Trading (BOLT) System] for which the charges in question had been paid by the appellant - assessee are common services that every member of the Stock Exchange is necessarily required to avail of to carry out trading in securities in the Stock Exchange. The view taken by the High Court that a member of the Exchange has an option of trading through an alternative mode is not correct. A member who wants to conduct his daily business in the Stock Exchange has no option but to avail of such services. Each and every transaction by a member involves the use of the services provided by the Stock Exchange for which a member is compulsorily required to pay an