Income Tax Appellate Tribunal - Chennai
M/S. Technology Frontiers India Pvt. ... vs Pcit-3, Chennai, Chennai on 25 October, 2019
आयकर अपील य अ धकरण, 'बी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं ी एस. जयरामन, लेखा सद य केसम%
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI S. JAYARAMAN, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.1840/Chny/2019
नधा'रण वष' /Assessment Year : 2014-15
M/s Technology Frontiers India
Pvt. Ltd., The Income Tax Officer,
No.38, Developed Plots Industrial v. Corporate Ward -21(4),
Estate, Chennai - 600 034.
Perungudi, Chennai - 600 096.
PAN : AABCT 2176 Q
(अपीलाथ+/Appellant) (,-यथ+/Respondent)
अपीलाथ+ क. ओर से / Appellant by : None
,-यथ+ क. ओर से / Respondent by : Shri A. Sundararajan, JCIT
सुनवाई क. तार ख / Date of Hearing : 23.09.2019
घोषणा क. तार ख / Date of Pronouncement : 25.10.2019
आदे श /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Principal Commissioner of Income Tax -3, Chennai, dated 27.03.2019, passed under Section 263 of the Income-tax Act, 1961 (in short 'the Act').
2. There was a delay of 9 days in filing this appeal by the assessee. The assessee has filed a petition for condonation of delay. We have 2 I.T.A. No.1840/Chny/19 gone through the petition and find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.
3. No one appeared for the assessee even though the notice of hearing was served by RPAD. The Registry has placed on record the postal acknowledgement as proof of service of notice. There may be various reasons for the assessee not to appear before this Tribunal when the appeal was taken up for hearing even after the service of notice of hearing by RPAD. One of the reasons, presumably, the assessee may not be interested in prosecuting the appeal further. Whatever may be the reason for non-appearance of the assessee, this Tribunal is expected to dispose the appeal on merit. Accordingly, we heard the Ld. Departmental Representative and proceeded to dispose the appeal on merit.
4. Shri A. Sundararajan, the Ld. D.R. submitted that the assessee claims interest paid to the Income-tax Department for delay in payment of tax deducted at source as an allowance / expenditure. This was allowed by the Assessing Officer without any discussion. Therefore, according to the Ld. D.R., the Principal Commissioner found that there was an error in the order of the Assessing Officer which is prejudicial to the interests of Revenue. According to the Ld. D.R., the interest on the delayed payment 3 I.T.A. No.1840/Chny/19 of tax deducted at source is not an expenditure for business. It partakes the character of payment of tax, therefore, such an expenditure to the extent of ₹61.58 lakhs cannot be allowed. Hence, according to the Ld. D.R., the Principal Commissioner has rightly directed the Assessing Officer to disallow ₹61.58 lakhs and add back the same to the total income.
5. We have considered the submission of the Ld. D.R. and perused the relevant material available on record. There is no discussion in the assessment order regarding claim of interest said to be paid to the extent of ₹61.58 lakhs due to delay in payment of tax deducted at source. However, the Principal Commissioner on examination of record, found that interest was claimed to the extent of ₹61.58 lakhs which was paid due to delay in payment of tax deducted at source. In view of the above, this Tribunal is of the considered opinion that the matter needs to be re- examined by the Assessing Officer and bring on record the nature of interest said to be paid by the assessee to the extent of ₹61.58 lakhs whether the assessee has paid interest due to delay in payment of tax deducted at source as observed by the Principal Commissioner in the impugned order or otherwise. In case, the interest was paid by the assessee due to delay in payment of tax deducted at source, it would partake the character of income-tax. This Tribunal is of the considered 4 I.T.A. No.1840/Chny/19 opinion that the interest for delay in the payment of tax deducted at source is nothing but a compensation for delayed payment of tax deducted by the assessee. Therefore, it would definitely partake the character of income-tax.
6. The income-tax paid by the assessee or the interest on the delayed payment of tax deducted at source cannot be an expenditure for earning the taxable income. Payment of income-tax and interest on the delayed payment of tax deducted at source would come into the picture after the business transactions or computation of taxable profit. Therefore, it cannot be an allowable expenditure. However, the facts need to be examined by the Assessing Officer and bring on record. Therefore, the Principal Commissioner has rightly found that the order of the Assessing Officer is erroneous and prejudicial to the interests of Revenue. However, the Principal Commissioner has directed the Assessing Officer to disallow ₹61.58 lakhs without any actual verification by the Assessing Officer. This Tribunal is of the considered opinion that whether the assessee has claimed ₹61.58 lakhs as expenditure or not needs to be examined / verified by the Assessing Officer. Accordingly, the impugned order of the Principal Commissioner is modified and the Assessing Officer is directed to verify whether the assessee has claimed the payment of interest to the extent of ₹61.58 lakhs as deduction while 5 I.T.A. No.1840/Chny/19 computing the taxable income. It is also necessary to bring on record whether this payment of ₹61.58 lakhs is for delay in payment of tax deducted at source and thereafter the Assessing Officer shall decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.
7. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the court on 25th October, 2019 at Chennai.
sd/- sd/-
(एस. जयरामन) (एन.आर.एस. गणेशन)
(S. Jayaraman) (N.R.S. Ganesan)
लेखा सद य/Accountant Member या यक सद य/Judicial Member
चे नई/Chennai,
5दनांक/Dated, the 25th October, 2019.
Kri.
आदे श क. , त6ल7प अ8े7षत/Copy to:
1. अपीलाथ+/Appellant 2. ,-यथ+/Respondent
3. Principal CIT-3, Chennai 4. 7वभागीय , त न ध/DR 5. गाड' फाईल/GF.