M/S. ANSYS SOFTWARE PRIVATE LIMITED V. THE COMMISSIONER OF INCOME-TAX

ITA/453/2019

AI Insights

The case involves M/S. ANSYS Software Private Limited, which appealed against the order of the Income Tax Appellate Tribunal, Bengaluru, concerning the assessment year 2006-07. The Tribunal had held that the assessment order was erroneous and prejudicial to the interest of the Revenue, thus invoking Section 263 of the Income Tax Act, 1961. The High Court's decision was influenced by a Supreme Court judgment in a related matter, which clarified the legal standing on similar issues, leading to the quashing of the Tribunal's order and ruling in favor of the assessee.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 691567 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 18-03-2021
• Assessment Year: misc
• Other Referred Cases: ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VS. THE COMMISSIONER OF INCOME TAX & ANOTHER
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: S SHANKAR; ANNAMALAI S; M LAVA
• Keywords: Assessment Year 2006-07; Erroneous order; Income tax appeal; Prejudicial to the interest of revenue; TDS obligation
• Section: 143(3); 263; 28; 260A; 40

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF MARCH, 2021 PRESENT THE HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA AND THE HON'BLE MR. JUSTICE S. VISHWAJITH SHETTY INCOME TAX APPEAL NO. 453 OF 2019 BETWEEN: M/S. ANSYS SOFTWARE PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, SRI. B. DEVKUMAR, KABRA EXCELSIOR, NO.6A, 7TH MAIN, 1ST BLOCK, KORAMANGALA, BENGALURU - 560 034. PAN: AADCA 1658 E. …APPELLANT (BY SRI. S.SHANKAR., SENIOR COUNSEL FOR SRI. ANNAMALAI. S, ADVOCATE AND SRI. M. LAVA., ADVOCATE) AND: THE COMMISSIONER OF INCOME-TAX BENGALURU-1, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095. … RESPONDENT (BY SRI.K.V. ARAVIND., ADVOCATE) 2 THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT WHICH IS AGAINST THE APPELLANT IN THE ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU ‘A’ BENCH, BENGALURU IN ITA NO. 673/BANG/2012 DATED 15.03.2019 FOR THE ASSESSMENT YEAR 2006-07 VIDE ANNEXURE-A. THIS INCOME TAX APPEAL COMING ON FOR HEARING THIS DAY, SATISH CHANDRA SHARMA J., DELIVERED THE FOLLOWING: JUDGMENT Mr. S. Shankar, Senior Counsel for Sri Annamalai S and Sri M.Lava for the assessee. Mr. K.V.Aravind, learned Counsel for the Revenue. 2. This appeal under Section 263 of the Income Tax Act, 1961, has been filed by the Assessee against the order dated 15.3.2019 in ITA NO. 673/BANG/2012 DATED 15.03.2019, passed by the Income Tax Appellate Tribunal. The appeal pertains to the assessment year 2006-2007. This appeal was admitted on the following substantial questions of law: 3 \"1. Whether the Tribunal was justified in law in holding that the order passed under section 143(3) of the Income Tax Act was erroneous and prejudicial to the interest of Revenue and consequently, amenable to the jurisdiction under section 263 of the Act on the facts and circumstances of the case? 2. Whether the Tribunal was justified in holding that the learned assessing officer before completing the assessment, has failed to make proper and adequate enquiry as regard to the TDS obligation on payments made by it to the foreign company without appreciating that in the appellant’s own case for the earlier previous years there was a favourable order from the Tribunal and thus there is no error moreso prejudicial to the interest of revenue and consequently passed a perverse order on the facts and circumstances of the case? 3. Whether the Tribunal is justified in not holding that the purchases made by the appellant do not come under the purview of provisions of section 30 to 38 warranting disallowance under section 40 of the Act 4 since the payments towards purchases of software is allowable under section 28 of the Act and consequently no revision under the provisions of section 263 of the Act is permissible on the facts and circumstances of the case?” 3. When the matter was taken up today, the learned counsel for the assessee submitted that the issue involved in this appeal has been set at rest in view of the decision rendered by the Supreme Court in Civil Appeal Nos.8733-8734/2018 between ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VS. THE COMMISSIONER OF INCOME TAX & ANOTHER, vide judgment dated 02.03.2021 and the issue involved in this appeal has been answered against the Revenue and in favour of the assessee. 4. Learned counsel for the Revenue was unable to dispute the aforesaid submission. 5. For the reasons assigned in the aforesaid judgment rendered by the Supreme Court in Civil 5 Appeal Nos. 8733-8734/2018 vide judgment dated 02.03.2021, the substantial questions of law involved in this appeal are answered in favour of the assessee and against the Revenue. The order dated 15.03.2019 in ITA NO. 673/BANG/2012 passed by the Income Tax Appellate Tribunal is hereby quashed. In the result, the appeal is allowed. Sd/- JUDGE Sd/- JUDGE nv "