The Income Tax Appellate Tribunal (ITAT) of Delhi recently remanded a matter back to the lower authority for fresh consideration, noting that the assessee’s requests for adjournment were not acknowledged.
The assessee/ appellant, Fiserv Global Services Inc., is a private limited company engaged in software development services, conversion, data entry, and software implementation.
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The Assistant Commissioner of Income Tax (ACIT), in an order dated February 6, 2020, assessed the appellant’s income for the financial year 2015-16 at Rs.73,79,04,860, raising the declared income of Rs. 73,19,78,280 by Rs. 59,26,580.
This increase was due to adjustments in the arm’s length price of international transactions with the assessee’s associated enterprise, M/s Fiserv Global Services Inc., determined by the Deputy Commissioner of Income Tax (Transfer Pricing Officer) [DCIT (TPO)], New Delhi.
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The DCIT (TPO), in its order dated October 31, 2019, had found a difference of Rs. 32,00,470 in the arm’s length price, which was added to the company’s income. Additional disallowances of Rs. 25,26,105 were also made by the ACIT.
Aggrieved by this assessment, the assessee appealed to the Commissioner of Income Tax [CIT(A)]. However, the CIT(A) dismissed the appeal, prompting the assessee to escalate the matter to the ITAT.
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Before the tribunal , the counsel for the assessee contended that the CIT(A)’s order was passed ex-parte, without providing a reasonable opportunity for the company to be heard.
It was highlighted that the assessee had requested adjournments in response to two critical notices from the CIT(A), dated October 25, 2021, and February 1, 2022, citing the need to gather necessary documentation from various sources.
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However, the CIT(A) incorrectly recorded that no such requests for adjournment had been made, and proceeded to dismiss the appeal on merits.
The Departmental Representative did not dispute the above submission that adjournments were requested in writing for the last two notices.
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Upon reviewing the case, the bench of Mr Pradip Kumar Kedia and Mr Narinder Kumar observed that the assessee had indeed sought adjournments in response to the notices issued on October 25, 2021, and February 1, 2022.
The Tribunal found that these requests were either overlooked or not properly recorded by the CIT(A). This procedural lapse resulted in the company not being afforded a fair opportunity to present its case.
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Given the procedural irregularities and in the interest of justice, the Tribunal ruled in favor of remanding the case back to the CIT(A).
The Tribunal directed that the case be restored, and that the CIT(A) provide the assessee with a reasonable opportunity to be heard and to present the necessary evidence to substantiate its claims.
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In result, the appeal was allowed.
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