SARVAM DIGITAL PRIVATE LIMITED Vs. UNION OF INDIA REPRESENTED BY SECRETARY MINISTRY OF FINANCE NEW DELHI

JUDGEMENT

(1.) PETITIONER is aggrieved of Ext.P5 order passed by the second respondent whereby the revision petition filed by the petitioner under Section 264 of the Income Tax Act has been rejected primarily on the question of maintainability and at the same time dealing with the merits of the case as well.

(2.) THE case of the petitioner as projected in the writ petition is that, the petitioner filed IT returns for the assessment year 2008-09 showing a net loss of Rs. 10, 48,048/- . In the course of scrutiny, the petitioner was asked to explain, why the debit of a sum of Rs.23,48,979/- towards the alleged expenses under a particular head shall not be disallowed. Since the explanation was not satisfactory, the assessing authority, placing reliance on Section 40(a)(ia), sought to disallow the expenses in respect of the service charges stated to have paid by the petitioner to overseas agents without effecting any TDS and accordingly fixed the liability upon the petitioner as per Ext.P2 assessment order. Being aggrieved of the same, the petitioner preferred Ext.P3 revision petition before the second respondent as mentioned herein before.

(3.) AFTER hearing both sides, this Court finds that the non-satisfaction of the requisite fee along with the application was only a 'curable defect' and that the petitioner was not given an opportunity to cure the same. Under these circumstances, this Court finds that the decision taken by the second respondent 'on merits' without giving an opportunity of hearing to the petitioner as to the merits involved, is not correct or sustainable. The impugned order (Ext.P5) passed by the second respondent is set aside and the second respondent is directed to reconsider the matter on merits and pass appropriate orders on Ext.P6 in accordance with law, after affording an opportunity of hearing to the petitioner as expeditiously as possible, at any rate within 'three months' from the date of receipt of a copy of this judgment. Writ petition is disposed of.