3K Technologies Ltd.,, Hyderabad vs Assessee

This appeal filed at the instance of the assessee is directed against the order of the CIT (A)-III Hyderabad dated 26.12.2013 passed for A.Y 2010-11 u/s 143(3) of the I.T. Act.

2. Briefly stated, the assessee 3K Technologies Ltd is a company engaged in the activity of software development and has filed its return of income for the A.Y 2010-11 on 15.10.2010 declaring an income of Rs. Nil and the income of Rs.2,53,53,010 u/s 115JB. The return of income was processed on 14.04.2011 u/s 143(1). The case was selected for scrutiny and notices u/s 143(2) dated 24.08.2010 was issued and duly certified on the assessee company. The assessment was completed by adding an amount of Rs.89,91,84,458 to the returned income. Aggrieved,

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the assessee raised a demand of Rs.24,57,55,338 towards the income tax, Rs.2,45,75,534 towards surcharge, Rs.81,09,926 towards education cess and interest u/s 234B and 234C of Rs.10,02,38,688 and Rs.1,97,813 respectively. AO has treated the entire receipts recorded in the P&L a/c as assessee's other sources of income, without allowing the expenditure.

3. Aggrieved, assessee filed appeal before the CIT (A). The CIT (A) held as follows:

"4. In this case, even though the appeal is filed in time, however, as certified by the AO vide his letter F No.ITO-2(2)/Appeals/Misc/2013-14,dated 17.12.13, the appellant has not paid admitted tax. Following line is written in the report of the AO.

The assessee not paid admitted tax........."

4. Section 249 of the Income Tax was reproduced by the AO.

5. The ld CIT (A) held after going through section 249 that it is clear that the case of the assessee falls within sub section of section 249. The CIT (A) further held that no application has been made for condonation of the fact that admitted tax was not paid and therefore, the appeal is not valid in the eyes of law and cannot be admitted.

6. Aggrieved, the assessee is in appeal before us. The ld Counsel for the assessee Shri Murali Mohan stated before us that the CIT (A) had not verified whether admitted tax has been paid and that the fact is that assessee has paid taxes till the filing of the appeal. The ld Counsel filed paper book showing the payment of taxes as follows:

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Statement showing self assessment taxes paid as per Form 26AS S.No Date Challan No. Amount (Rs.)

1 14.03.2011 00255 8,70,000

2 29.03.2011 00368 2,00,000

3 29.03.2011 00369 5,00,000

4 30.03.2011 00337 2,00,000

5 30.03.2011 00338 5,00,000

6 31.03.2011 00375 3,00,000

7 31.03.2011 00376 2,00,000

8 27.04.2011 00174 20,57,940

Taxes paid till the date of filing of 49,77,940 appeal i.e 18.04.2013

7. He also produced copy of Form 26AS and copy of acknowledgement of ITR for A.Y 2010-11 at page No.5.

8. We have perused the details pointed out by the ld Counsel for the assessee and find that the payment of tax before the due date are supported by challans. We are surprised to note that AO has not even given credit to the taxes paid before completion of assessment, vide order dated 31.03.2013. Ld CIT (A) also failed to give an opportunity to explain before dismissing the appeal. In these circumstances, we restore the appeal to the file of the CIT (A) for fresh examination of the above facts and to consider on merits of the

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case, after giving an opportunity to the assessee to present its case.

9. In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the Open Court on 18th February, 2015.

Sd/- Sd/- (B. Ramakotaiah) (Asha Vijayaraghavan) Accountant Member Judicial Member

Hyderabad, dated 18th February, 2015.

Vnodan/sps Copy to:

1. P. Murali & Co. C.As, 6-3-655/2/3 1st Floor, Somajiguda, Hyderabad 500028

2. Income Tax Officer Ward-2(2) Hyderabad

3. The CIT(A)-III Hyderabad

4. The CIT - II Hyderbad

5. The DR, ITAT, Hyderabad

6. Guard File

By Order

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