M/s Conergy Energy Systems Private Limited , Bangalore v. The Assistant Commissioner of Income Tax Circle-2(1)(1), Bangalore

ITA 88/BANG/2017 | 2012-2013
Pronouncement Date: 29-11-2017 | Result: Allowed

Appeal Details

RSA Number 8821114 RSA 2017
Bench Bangalore
Appeal Number ITA 88/BANG/2017
Duration Of Justice 10 month(s) 13 day(s)
Appellant M/s Conergy Energy Systems Private Limited , Bangalore
Respondent The Assistant Commissioner of Income Tax Circle-2(1)(1), Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-11-2017
Last Hearing Date 06-09-2017
First Hearing Date 06-09-2017
Assessment Year 2012-2013
Appeal Filed On 16-01-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI JASON P BOAZ ACCOUNTANT MEMBER AND SHRI LALIET KUMAR JUDICIAL MEMBER I.T . (T.P) A. NO. 88 /BANG/20 17 (ASSESSMENT YEAR : 20 12 - 13 ) M/S. CONERGY ENERGY SYTEMS PVT. LTD. NO.91/3 2 ND FLOOR 8THCROSS NAGAVARAPALYA C V RAMAN NAGAR POST BANGALORE - 560 093 . . APPELLANT. VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE 2(1)(1) BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI SUDHEENDRA C A R E SPONDENT BY : SHRI SUNDAR RAO CHINTALA CIT - 1 (D.R) DATE OF H EARING : 27.11.2017. DATE OF P RONOUNCEMENT : 29.11 .201 7 . O R D E R PER SHRI JASON P BOAZ A J .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 COMPLETED UNDER SECTION 143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT 1961 (IN SHORT 'THE ACT') VIDE ORDER DT.8.11.2016 PURSUANT TO THE DIRECTIONS ISSUED BY THE DISPUTE RESOLUTION PANEL - 1 (DRP) BANGALORE UNDER SECTION 144C(5) OF THE ACT ON 0 4.01.2016. 2 IT (T.P) A NO. 88 /BANG/201 7 2. BRIEFLY STATED THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL A RE AS UNDER : - 2.1 THE ASSESSEE A COMPANY ENGAGED IN THE FIELD OF RENEWABLE ENERGY MAINLY SOLAR PV SYSTEMS FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2012 - 13 ON 30.09.2012 DECLARING LOSS OF ( - ) RS.35 50 17 741. THE RETURN WAS PROCESSED UNDE R SECTION 143(1) OF THE ACT AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. IN VIEW OF THE INTERNATIONAL TRANSACTIONS REPORTEDLY ENTERED INTO BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION THE ASSESSING OFFICER MADE A REFERENCE TO THE TRANSFER PR ICING OFFICER ( TPO ) FOR DETERMINATION OF THE ARM S LENGTH PRICE ( ALP ) OF THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES (AES). THE TPO VIDE ORDER UNDER SECTION 92CA OF THE ACT PROPOSED TRANSFER PRICING ADJ USTMENT OF RS.4 75 03 022 IN RESPECT OF THE INTERNATIONAL TRANSACTIONS O F PAYMENT OF TECHNICAL AND MANAGEMENT COSTS. THE DRAFT ORDER OF ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) R.W.S. 144C(1) OF THE ACT VIDE ORDER DT.9.3.2016 WHEREIN THE ASSESSEE'S LOSS WAS DETERMINED AT ( - ) RS.30 75 14 719 IN VIEW OF THE INCORPORATION OF THE TRANSFER PRICING ADJUSTMENT OF RS.4 75 03 022. 2.2 AGGRIEVED BY THE DRAFT ORDER OF ASSESSMENT DT.9.3.2016 FOR ASSESSMENT YEAR 2012 - 13 THE ASSESSEE FILED ITS OBJECTIONS THERE TO BEFORE THE DRP. THE DRP VIDE ORDER DT.4.10.2016 DISMISSED THE ASSESSEE'S OBJECTIONS FOR THE REASON THAT THERE WAS A DELAY OF 22 DAYS IN FILING THE 3 IT (T.P) A NO. 88 /BANG/201 7 OBJECTIONS AND THE DRP IS NOT EMPOWERED TO CONDONE THE DELAY BEYOND THE PERIOD SPECIFIED FOR FILING OF OB JECTIONS UNDER SECTION 144 C (2) OF THE ACT. THEREFORE THE ASSESSEE'S OBJECTIONS RAISED ON MERITS WERE NOT ADDRESSED BY THE DRP. CONSEQUENTLY THE FINAL ORDER OF ASSESSMENT WAS PASSED UNDER SECTION 143(3) R.W.S. 144C(13) OF THE ACT VIDE ORDER DT.8.11.2016 WHEREIN THE ASSESSEE'S LOSS WAS DETERMINED AT ( - ) RS.30 75 14 719; WHICH INCLUDED THE TRANSFER PRICING ADJUSTMENT OF RS.4 75 03 022. 3. THE ASSESSEE BEING AGGRIEVED INTER ALIA BY THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 DT.8.11.2016 HA S PREFERRED THIS APPEAL BEFORE THE TRIBUNAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS : - 4 IT (T.P) A NO. 88 /BANG/201 7 5 IT (T.P) A NO. 88 /BANG/201 7 4.0 GROUND NO.1 GENERAL GROUND . THE GROUND NO.1 (SUPRA) ADMITTEDLY BEING GENERAL IN NATURE NO ADJUDICATION IS CALLED FOR THEREON. 5.0 GROUN D NO.2 - DRP DIRECTIONS NOT CONDONING THE DELAY IN FILING THE OBJECTIONS . 5.1 IN THESE GROUNDS THE ASSESSEE ASSAILS THE DRP S ORDER IN NOT CONDONING THE DELAY OF 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ALONG WITH THE SUBMISSION OF THE OBJECTIONS BEFORE THE DRP IN FORM 35A ON 3.5.2016 THE ASSESSEE HAD FILED LETTER DT.28.4.2016 WHEREIN IT HAD SET OUT THE REASONS FOR THE DE LAY OF 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP. IT WAS SUBMITTED THAT AS LAID OUT IN THE LETTER DT.28.4.2016 DUE TO TERMINATION OF THE LEASE AGREEMENT IN APRIL 2016 THE ASSESSEE WAS IN THE PROCESS OF SHIFTING ITS OFFICE TO A NEW LOCATION; AND A LSO DUE TO ONGOING ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2013 - 14 AND APPEAL PROCEEDINGS BEFORE THE CIT (APPEALS) II BANGALORE FOR ASSESSMENT YEAR 2011 - 12. IT WAS IN THESE CIRCUMSTANCES AS NARRATED ABOVE THAT THE ASSESSEE FILED THE OBJECTIONS 22 DAYS LATE BEFORE THE DRP 6 IT (T.P) A NO. 88 /BANG/201 7 AND THIS CONSTITUTED SUFFICIENT AND REASONABLE CAUSE FOR THE DELAY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT FILED THE OBJECTIONS LATE INTENTIONALLY OR WILLFULLY AS THAT WOULD JEOPARDIZE ITS OWN CASE WHICH NO ONE WOULD DO PARTICULARLY CONSIDERING THE FACT THAT A HU GE TRANSFER PRICING ADJUSTMENT OF RS.4 75 03 022 WAS INVOLVED. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE SINCE IT IS SETTLED POSITION THAT LEGITIMATE TAXES PAYABLE BY THE ASSESSEE TO THE REVENUE ALON E HAVE TO BE COLLECTED THEREFORE NO LOSS WOULD BE CAUSED TO REVENUE IF THE DELAY OF 22 DAYS IN FILING THE OBJECTIONS IS CONDONED AND THE DRP BE DIRECTED TO DISPOSE OFF THE ASSESSEE'S OBJECTIONS ON MERITS. HOWEVER IF THE SAID DELAY OF 22 DAYS IS NOT CO NDONED THE ASSESSEE WOULD BE PUT TO GRAVE HARDSHIP AND DIFFICULTY. IT IS PRAYED THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS NARRATED IN THE PETITION FOR CONDONATION OF DELAY AND IN THE INTEREST OF SUBSTANTIAL JUSTICE THE DELAY OF 22 DAYS IN FILIN G THE OBJECTIONS BEFORE THE DRP BE CONDONED AND THE DRP BE DIRECTED TO HEAR AND DISPOSE OFF THE ASSESSEE'S OBJECTIONS ON MERITS. IN THIS REGARD RELIANCE WAS INTER ALIA PLACED BY THE LEARNED AUTHORISED REPRESENTATIVE ON THE DECISION OF THE HON'BLE APEX C OURT IN THE CASE OF MST KATIJI & OTHERS (1987) 167 ITR 471 (SC) WHEREIN THE PRINCIPLES FOR DEALING WITH MATTERS OF CONDONATION OF DELAY HAVE BEEN LAID DOWN. 5.2 PER CONTRA THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE VEHEMENTLY OPPOSED THE COND ONATION OF DELAY OF 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP. 7 IT (T.P) A NO. 88 /BANG/201 7 5.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT APPEARS TO US FROM A CAREFUL CONSIDERATION OF THE REASONS PUT FORTH IN THE PET ITION FOR CONDONATION OF DELAY AND THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE DELAY OF 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP WAS NEITHER WITH MALAFIDE INTENTION NOR WILLFUL BUT FOR THE REASONS STATED IN THE ASSESSEE'S PET ITION WHICH IN OUR CONSIDERED OPINION WOULD AMOUNT TO SUFFICIENT AND REASONABLE CAUSE FOR THE ASSESSEE'S DEFAULT. IT DOES NOT STAND TO REASON THAT ANY PERSON WOULD INTENTIONALLY JEOPARDIZE ITS OWN CASE; MORE SO WHEN THE ISSUE INVOLVED IS A TRANSFER PRI CING ADJUSTMENT OF RS.4 75 03 022. 5.3.2 THE HON'BLE APEX COURT IN THE CASE OF MST KATIJI & OTHERS (SUPRA) HAS LAID DOWN THE PRINCIPLES FOR EXAMINING PETITIONS FOR CONDONATION OF DELAY IN FILING APPEALS I.E. THE SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATION S . IT IS SETTLED POSITION THAT WHILE CONSIDERING SUFFICIENT CAUSE THE COURT SHOULD TAKE A LIBERAL VIEW IN THE INTEREST OF SUBSTANTIAL JUSTICE ESPECIALLY WHERE IT IS FOUND THAT THE PARTY HAS NOT ACTED WITH MALAFIDE INTENTIONS AND EXPLANATION/REASONS ARE SATISFACTORY. IN THE CASE ON HAND THE EXPLANATION PUT FORTH BY THE ASSESSEE AS REASONS FOR NOT FILING THE OBJECTIONS IN TIME HAS NOT BEEN CONTROVERTED BY REVENUE OR THE DRP WHO HAS MERELY REJECTED THE ASSESSEE'S PETITION ON T HE GROUND THAT THEY ARE NOT EMPOWERED BY LAW TO CONDONE THE DELAY IN FILING OBJECTIONS BEFORE THEM. IN OUR CONSIDERED VIEW AFTER A CAREFUL PERUSAL OF THE EXPLANATION PUT FORTH FOR THE DELAY OF 8 IT (T.P) A NO. 88 /BANG/201 7 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP W E FIND THAT THE ASSESSEE'S DEFAULT IS NEITHER INTENTIONAL OR MALAFIDE AS BY FILING THE OBJECTIONS BELATEDLY THE ASSESSEE DID NOT STAND TO BENEFIT. IN THE FACTUAL AND LEGAL MATRIX OF THE CASE AS DISCUSSED ABOVE WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE' S EXPLANATION AS PUT FORTH CONSTITUTE SUFFICIENT CAUSE FOR THE DELAY OF 22 DAYS IN FILING THE OBJECTIONS BEFORE THE DRP. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF MST KATIJI & OTHERS (SUPRA) WE ARE OF THE OPINION THAT THIS IS A FIT CASE FOR CONDONATION OF THE DELAY AND ACCORDINGLY CONDONE THE DELAY OF 22 DAYS ON THE PART OF THE ASSESSEE IN FILING THE OBJECTIONS BEFORE THE DRP. WE ACCORDINGLY SET ASIDE THE ORDER OF THE DRP UN DER SECTION 1 4 4C(5) OF THE ACT DT.4.10.2016 AS WELL AS THE IMPUGNED ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 DT.8.11.2016 AND RESTORE THE MATTER OF EXAMINATION AND ADJUDICATION OF THE ASSESSEE'S OBJECTIONS RAISED IN F ORM NO.35A IN THE CASE ON HAND ON MERITS. NEEDLESS TO ADD THE DRP SHALL PROVIDE THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE SUBMISSIONS / DETAILS ON ALL THE OBJECTIONS RAISED IN FORM NO.35A WHICH SHALL BE DULY CONSIDERED BEFORE ADJUDICATING THEREON IN ACCORDANCE W ITH LAW. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY GROUND NO.2 OF THE ASSESSEE'S APPEAL IS ALLOWED. 6. IN VIEW OF OUR ORDER SETTING ASIDE THE ORDER OF THE DRP DT.4.10.2016 AND THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 DT.8.11.2016 AND RE STORING THE ASSESSEE'S OBJECTIONS RAISED BEFORE THE DRP IN FORM 9 IT (T.P) A NO. 88 /BANG/201 7 NO.35A FOR ADJUDICATION ON MERITS WE DECLINE TO ADJUDICATE THE GROUNDS RAISED BY THE ASSESSEE ON VARIOUS ISSUE S ON MERITS IN THE APPEAL BEFORE US AS THE SAME HAVE NOT BEEN CONSIDERED BY THE DRP. 7. IN THE RESULT THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 2012 - 13 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOV. 201 7 . SD/ - ( LALIET KU MAR ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE DT. 29.11 .2017. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT BANGALORE 3 CIT 6 GUARD FIL E SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.