Case Law Details
Prosim Research and Development Pvt. Ltd. Vs ITO (ITAT Bengaluru)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals)-5, Bengaluru for Assessment Year 2014-15. The dispute related to an addition of Rs. 1,13,59,703 under Section 40(a)(ia) of the Income-tax Act, 1961.
The assessee had filed its return declaring total income of Rs. 60,68,280. The Assessing Officer completed the assessment at Rs. 1,74,27,983 after making the addition of Rs. 1,13,59,703 on the ground that the assessee had failed to deduct tax at source under Section 195 of the Act.
The assessee appealed before the CIT(A), who disposed of the appeal ex parte by following the decision in CIT v. Multiplan India Ltd., 38 ITD 320, without considering the merits of the case.
After hearing the parties and examining the record, the Tribunal observed that the CIT(A) had not decided the appeal on merits. It held that under the provisions of the Act, the CIT(A) is required to pass an order on merits even where there is no response from the assessee.
Accordingly, in the interest of justice, the Tribunal remanded the matter to the file of the CIT(A) with a direction to provide the assessee an opportunity of hearing and decide the appeal on merits. The Departmental Representative assured the Tribunal that all necessary information would be furnished for disposal of the appeal.
The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BENGALURU
This appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-5, Bengaluru (hereafter referred as “CIT(A)”) in ITA No.262/W(1)(3)CIT(A)BNG- 5/2016-17 dated 27/02/2018 for the assessment year 2014-15.
2. All the grounds of appeal are related to the addition of Rs. 1,13,59,703/- u/s. 40(a)(ia) of the Income Tax Act, 1961 (“the Act”). The assessee filed return of income declaring at total income of Rs. 60,68,280/- on 29.11.2014 and the assessment was completed on total income of Rs. 1,74,27,983/- by an order dated 26.12.2016. The Assessing Officer (AO) made the addition of Rs. 1,13,59,703/- for the assessee’s failure to deduct tax at source u/s. 195 of the Act. The assessee went on appeal before the ld. CIT(A) and the ld. CIT(A) decided the appeal exparte following the decision of Hon’ble High Court of Delhi in the case of CIT v. Multiplan India Ltd. 38 ITD 320. Against which, the
assessee filed appeal before us.
3. We heard the rival submissions and perused the material placed on record. In the instance case, the ld. CIT(A) decided the appeal exparte following the decision of Multiplan India Ltd., supra and the ld. CIT(A) did not consider the merits while disposing the appeal. As per the provisions of the Act, the ld. CIT(A) is bound to pass order on merits even there is no response from the assessee. Therefore, in the interest of justice, we remit the matter back to the file of ld. CIT(A) to afford opportunity to the assessee to decide the appeal on merits. The ld. DR assured that he will co-operate with the ld. CIT(A) and furnish all the information required for disposal of the appeal. Accordingly, the appeal is allowed for statistical purpose.
4. In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 29th November, 2019.
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