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Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI
Before: SHRI G.S. PANNU & SHRI AMARJIT SINGH
The captioned appeal by the assessee is directed against the order of CIT(A)-59, Mumbai dated 12.01.2015, pertaining to the Assessment Year 2008-09, which in turn has arisen from the order passed by the TRO TDS-2, Mumbai dated 30.03.2011 under section 201(1)/201(1A) of the Income Tax Act, 1961 (in short ‘the Act’).
2. In this appeal, assessee has raised the following Grounds of appeal :-
“1. The ‘Learned Commissioner of Income Tax (Appeals) Mumbai-59’ committed a gross error of Law and fact in arriving at the following conclusion in ‘Paragraph ‘2’ of the order namely, ‘none attended nor written submission filed’, inspite of an adjournment application for the first time being filed and acknowledged on the date of hearing i.e. 12.01.2015 and not disposed of. The order of the ‘Learned Commissioner of Income-Tax (Appeals) Mumbai-59’ is dated 12.01.2015 but is received by the ‘Appellant’ only on 11.02.2015.
The ‘Learned Commissioner of Income Tax (Appeals) Mumbai-59’, committed a gross error of law and fact by disregarding the subsequent ‘Request for Review/Personal hearing/stay’ filed by the Appellant vide letter dated 26.02.2015 and filed on 05.03.2015.
3. (i) The ‘Learned Commissioner of Income-Tax (Appeals) Mumbai- 59’, has also erred in stating an incorrect demand figure in paragraph ‘3’ of the ‘order’ as totalling 26,090/- (TDS u/s. 201 (1) of Rs. 20,872/- and interest u/s.201(1A) of Rs. 5218/- of the Income-Tax Act’1961 (‘Act’))
(ii) The Correct figure of total demand is Rs. 6,81,623/- (TDS u/s. 201(1) of Rs. 5,08,674/- and interest u/s.201(1A) of Rs, 1,72,949/- of the ‘Act’).
4. The ‘Learned Commissioner of Income-Tax (Appeals) Mumbai-59’, has also erred in not appreciating the ‘Statement of Facts’ filed by the Appellant, wherein the ‘Appellant’ had clarified that the ‘Disallowances of Rs. 44,89,619/-’ being payments to ‘Stock Exchanges’ towards ‘Leaseline Charges’ and ‘Vsat Charges’ was made in the Scrutiny Assessment proceeding in the order u/s.143(3) of the ‘Act’ by the Assessing officer and not as incorrectly stated by the TRO(TDS)-Range-2 Mumbai in paragraph '1' of his order dated 30.03.2011 as under:-
‘However, in the item no. 8A(a) of Part A of the return, the amount of expenditure disallowed on account of non-compliance with the provisions of deduction of tax at source, as per section 40(a)(i), 4(a)(ia) and 40(a)(iii) is shown at Rs.44,89,619/-’.
The 'Learned Commissioner of Income-Tax (Appeals) Mumbai-59' committed a gross error of law and fact in confirming the total demand of Rs. 6,81,623/- (TDS u/s.201(1) of Rs. 5,08,674/- and interest u/s.201(1A) of Rs. 1,72,949/- of the 'Act') by the TRO-TDS Range '2' Mumbai being TDS deductible u/s.194J of the ‘Act’ and interest on 'TDS', on payments to 'Stock Exchanges' towards 'Leaseline Charges' and ‘Vsat Chagres' and disallowed u/s. 40 Clause (a) sub-clause (ia) of the 'Act' in Scrutiny Assessment proceeding u/s.143(3) of the ‘Act’ by the Assessing officer
The 'Learned Commissioner of Income-Tax (Appeals) Mumbai-59', committed a gross error of law and fact in confirming the total demand of Rs.6,81,623/- (TDS u/s.201(1) of Rs. 5,08,674/- and interest u/s. 201(1A) of Rs.1,72,949/- of the 'Act') by the TRO-TDS —Range '2' Mumbai, being 'TDS' deductible u/s.194-I and interest on TDS, on payments to ‘Stock Exchanges’ towards ‘Leaseline Charges’ and ‘Vsat Charges’, since the disallowance u/s.- 194-I was not a subject matter of the Scrutiny Assessment proceedings u/s.143(3) of the ‘Act’.
The Appellant prays, that once a disallowance is made u/s.40 clause (a) sub-clause (ia), the Learned TRO-TDS-Range-2 Mumbai is precluded from raising any demand u/s. 201(1)/ 201(1A) of the Act.”
Inspite of issuance of notice, none appeared on behalf of the assessee at the time of hearing, therefore, we proceed to decide the appeal ex parte qua the assessee after hearing the Ld. DR on merit in terms of Rule 24 of the Appellate Tribunal Rules, 1963.
In this appeal, the brief facts are that in an order passed u/s 201(1) of the Act, the assessee was held to be an assessee in default for non-deduction of tax at source to the extent of Rs.6,81,623/- inclusive of interest u/s 201(1A) of the Act. The CIT(A) has also dismissed the appeal of the assessee ex parte noticing that on the date of hearing none attended and nor any written submissions were filed on behalf of the assessee.
5. The aforesaid Grounds of appeal raised before us contain a preliminary objection to the effect that the CIT(A) has grossly erred in disposing of the appeal of assessee ex parte. Ground of appeal no. 1 specifically points out that an adjournment application was filed and acknowledged on the date of hearing, i.e., 12.01.2015, but has not been disposed of. In this context, we find that the order of CIT(A) in para 2 contains a statement to the fact that none attended on behalf of the assessee.
6. The Ld. DR has merely supported the action of the CIT(A). So however, we find that the assertion of the assessee is quite potent inasmuch as in Ground of appeal no. 2, it is further asserted that an application requesting for review/personal hearing was also filed before the CIT(A). There is no material to suggest that such an application has been disposed of by the CIT(A).
7. Considering the entirety of the circumstances, we deem it fit and proper to restore the appeal back to the file of CIT(A) for adjudication afresh in accordance with law after allowing the assessee reasonable opportunity of being heard.
In the result, appeal of the assessee is partly allowed, as above.
Order pronounced in the open court on 17th August, 2016.