2012 (11) TMI 1130 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing appeals.
2. Treatment of reimbursed expenditure as income.
3. Tax rate applicable to income from projects started before 1.4.2003.

Condonation of Delay:

At the outset, we note that these appeals were filed on 12.6.2012 by the assessee with a delay of 175 days. The assessee has filed a petition seeking condonation of delay which is also accompanied by a sworn affidavit by the authorised person. The petitioner was under the bona-fide impression that no appeal need be filed before the Hon'ble ITAT against the order u/s 143(3) r.w.s. 144C of the I.T. Act pending the decision of the Hon'ble High Court on the admission of the appeal filed by the department. The courts and quasi-judicial bodies are moved to condone the delay if a litigant satisfies the court that there were sufficient reasons for delay. The expression "sufficient cause or reasons" as provided in subsection (3) of section 249 of the IT Act is used in identical position as in the Limitation Act and CPC. Considering the overall facts and circumstances of the case, we are inclined to condone the delay of 175 days and admit the appeals of the assessee.

Treatment of Reimbursed Expenditure:

The first ground is that the Assessing Officer erred in treating the expenditure reimbursed as the income of the assessee without considering the fact that earlier year the Tribunal held that the said reimbursable expenditure does not represent income of the assessee. After hearing both the parties, we are of the opinion that this issue came for consideration before this Tribunal in assessee's own case in ITA No. 1073 & 1074/Hyd/04 for A.Ys. 2000-01 and 2001-02 and ITA Nos. 720 & 725/Hyd/08 dated 30th January, 2010 for A.Ys. 2002-03 wherein held as follows: "The reimbursable expenditure received by the assessee cannot form part of the total income." Respectfully following the above order of the Tribunal for earlier year (cited supra) we are inclined to allow the ground taken by the assessee for these assessment years also as the facts and circumstances of the present assessment years before us are similar to that was considered by this Tribunal in earlier assessment years. This ground of the assessee is allowed in all the three appeals i.e., ITA Nos. 937 to 939/Hyd/2012.

Tax Rate Applicable to Income from Projects Started Before 1.4.2003:

Now coming to the second ground that the Assessing Officer erred in taxing the assessee in respect of income derived from the project started before 1.4.2003 at 20% as against the rate applicable at 15%, this ground is also adjudicated in the earlier order of the Tribunal in assessee's own case in ITA No. 1250/Hyd/2011 dated 25th October, 2011 for assessment year 2006-07 wherein it was held that the fee for technical services falls under Article 12 of DTAA and not under article 7 of DTAA and tax has to be levied at 15%. Respectfully following the above order of the Tribunal for A.Y. 2006-07, we are inclined to allow the ground taken by the assessee.

Conclusion:

In the result, appeals of the assessee are allowed.

Order pronounced in the open court on 2/11/2012.