Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 26928 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-02-2025
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB-B
Assessment Year
2020-2021
Judgement Text
" ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 1 of 17 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.886/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2020-21) Broadridge Financial Solutions (India) Pvt. Ltd Hyderabad PAN:AADCB0321R Vs. Dy. CIT Circle – 1(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri Ajit Kumar Jain, CA राज̾ व Ȫारा/Revenue by:: Smt. M. Narmada, CIT(DR) सुनवाई की तारीख/Date of hearing: 13/02/2025 घोषणा की तारीख/Pronouncement: 19/02/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal filed by the assessee is directed against the assessment order dated 12/07/2024 passed u/s 143(3) r.w.s. 144C(13) of the I.T. Act, 1961 in pursuant to the DRP directions dated 20/06/2024 for the A.Y 2020-21. 2. The assessee has raised the following grounds of appeal: ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 2 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 3 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 4 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 5 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 6 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 7 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 8 of 17 ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 9 of 17 3. Ground No.1 is general in nature and does not require any specific adjudication. 4. Ground No.2 is regarding validity of assessment order being barred by limitation of prescribed u/s 153C of the I.T. Act, 1961. At the time of hearing, the learned AR of the assessee has stated at Bar that the assessee does not press Ground No.2 and the same may be dismissed as not pressed. The learned DR has raised no objection, if Ground No.2 challenging the validity of the assessment order is dismissed as not pressed. Accordingly, Ground No.2 of the assessee’s appeal is dismissed being not pressed. 5. Ground Nos.1 to 21 are regarding T.P adjustment and Advance Pricing Agreement (APA) 6. The learned AR of the assessee has submitted that in the case of the assessee, Advance Pricing Agreement (APA) was ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 10 of 17 already signed and therefore, the international transaction for the year under consideration in respect of provision of software development and interest on delayed receivables are both now covered by this APA. He has referred to the order of the TPO and submitted that the TPO has proposed the transfer pricing adjustment only on these two issues being provision of software development services and interest on delayed receivables which are both covered under the APA signed u/s 92C of the I.T. Act, 1961 and in clause 3.1 the details of international transactions are mentioned in the APA placed at page No.298 to 304 of the paper book. He has also referred to the clause 2 of the agreement and submitted that the said agreement applies in respect of consecutive 5 years commencing from A.Y 2019-20 to 2023-24 and therefore, the A.Y under consideration is covered under the APA. The learned AR, then referred to the giving effect order dated 16/07/2024 passed by the TPO wherein the TPO has acknowledged the fact that the case of the assessee falls under the purview of section 92CD (4) and (5) of the I.T. Act, 1961. The TPO further observed that considering the fact Assessing Officer is to pass an appropriate order consequent to the DRP order dated 20/06/2024. However, the Assessing Officer while passing the final assessment order has made addition on account of the TP adjustment initially proposed by the TPO. The learned AR then referred to the modified return of income filed by the assessee in Form No.3CEF as per Rule 10O(2) of the I.T. Act, 1961 wherein the assessee has offered the income to tax in terms of the advance ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 11 of 17 pricing agreement (APA). Thus, the learned AR has submitted that despite the advance pricing agreement signed by the authorities and consequent filing of the modified return of income in Form 3CEF by assessee, the addition is made in total disrespect to the APA in respect of the international transaction. Thus, the learned AR has submitted that the additions made by the Assessing Officer amounts to double taxation of the same income when the assessee has already offered the income to tax in terms of the advance pricing agreement. 7. The learned DR, on the other hand, has relied upon the orders of the authorities below and submitted that the Assessing Officer is bound by the order of the TPO and therefore, cannot tinker with the TP adjustment proposed by the TPO. 8. We have considered the rival submissions as well as the relevant material available on record. The TPO while passing the order dated 19/05/2022 u/s 92CA(3) of the I.T. Act, 1961 made the transfer pricing adjustment on the international transactions, the summary of which are given at page No.108 of the TP order as under: Nature of transaction Adjustment (Rs.) Provision of software development services 24,37,80,880/- Interest on delayed receivables 16,648/- Total 24,37,97,528/- ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 12 of 17 9. Thus, it is clear that the TPO proposed the TP adjustment in respect of two international transactions namely provisions of software development services and interest on delayed receivables. On the basis of the said order of the TPO, the Assessing Officer framed a draft assessment order against which the assessee filed its objections before the DRP. In the meantime, the advance pricing agreement u/s 92CC of the I.T. Act, 1961 was signed by the competent authority of the Govt. of India and the assessee. Clause (2) of the said agreement entails the details of the previous years and A.Ys covered by the agreement as under: 10. Thus, it is clear that the agreement applies to the assessment orders 2019-20 to 2023-24 and hence the assessment order under consideration i.e. 2020-21 is covered under the said APA. Further, the transactions covered under the APA are also provided in clause 3.1 as under: ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 13 of 17 11. It is manifest from clause 3.1 of the APA that the international transactions which is subject matter of this appeal being (i) provision of software development services and (ii) interest on delayed receivables are covered under the APA. Since this APA was signed after the order of the TPO as well as the draft assessment order, therefore, it was not considered either by the TPO nor by the Assessing Officer. However, the assessee has duly filed the copy of the APA as well as the modified return of income in form 3-CEF before the final assessment as well as giving effect order passed by the TPO but the same was not taken into consideration either by the TPO or by the Assessing Officer while passing the respective orders in terms of the directions of the DRP. Since the international transactions which is subject matter of this appeal are already covered under the APA and the assessee has already filed the modified return of income in Form 3CEF placed at page No.224 to 234 of the paper book, then the additions made by the Assessing Officer on account of TP adjustment in respect of the same international transactions would not survive. Accordingly, in the facts and circumstances of the case when the assessee has already paid the tax in respect of the international transactions and in terms of the price agreed between the parties as per the APA, then the TP adjustment made in respect of these two international transactions namely provision of software development services and interest on delayed receivables is not sustainable and the same is deleted. ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 14 of 17 12. Ground Nos.22 to 29 are regarding the disallowance made by the CPC while processing the return of income u/s 143(1) of the I.T. Act, 1961 on account of delayed payment of Employees’ Contribution to PF and ESI. 13. We have heard the learned AR as well as the learned DR and perused the material available on record. The assessee has not disputed the fact that there was a delay in making the payment towards employees’ contribution to PF & ESI and therefore, this issue is no longer res integra in view of the judgment of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT reported in (2022) 448 ITR 518. Accordingly, Ground Nos. 22 to 29 raised by the assessee are dismissed. 14. Ground No.30 is regarding the deduction u/s 80G claimed by the assessee during the course of assessement proceedings in respect of donations to the Karnataka State Disaster Management Authority. The learned AR has submitted that the assessee made this additional claim during the course of assessement proceedings as the receipt for the said donation was received by the assessee at that point of time and therefore, this deduction was claimed. He has further submitted that the DRP has also not adjudicated this issue despite this issue was raised in the objections before the DRP. Thus, the learned AR has ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 15 of 17 submitted that the Assessing Officer may be directed to allow the claim of the assessee u/s 80G of the I.T. Act, 1961. 15. On the other hand, the learned DR has submitted that the Assessing Officer cannot go beyond the return of income and therefore, the additional claim made by the assessee out of return of income cannot be accepted. 16. We have considered the rival submissions as well as relevant material available on record. Undisputedly, the assessee did not claim deduction u/s 80G in the return of income and the same was made during the assessement proceedings. Though there is a restriction on the jurisdiction of the Assessing Officer for entertaining the claim of the assessee not part of the return of income, however, the DRP ought to have considered the same as there was no legal impediment for entertaining a claim based on the fact of donation made to the eligible fund/Trust u/s 80G of the I.T. Act, 1961. In this regard, the assessee has relied upon the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers and Shareholders reported in 23 Taxmann.com 23. Hence, in the facts and circumstances of the case, we admit this additional claim of the assessee for deduction u/s 80G of the Act in respect of donation made towards Karnataka State Disaster Management Authority and direct the Assessing Officer to verify the correctness of the claim and then allow deduction u/s 80G of the I.T. Act, 1961. ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 16 of 17 17. Ground No.31 is regarding charging interest by the Assessing Officer u/s 115P for non-payment of dividend distribution tax in time. 18. The learned AR has submitted that the Assessing Officer has wrongly made this addition of interest u/s 115P of the I.T. Act, 1961 without verifying the fact that the assessee has already paid on dividend distribution tax as per the provisions of the Act. Thus, he has contended that there is no delay in payment of dividend distribution tax. Hence, he has pleaded that the Assessing Officer may be directed to verify this fact and then delete the addition made on this account. 19. The learned DR, on the other hand, relied upon the directions of the DRP. 20. Having considered the rival submissions, at the outset, we are of the opinion that this issue requires proper verification as to whether the assessee has paid the dividend distribution tax within the prescribed time limit or not. Accordingly, the Assessing Officer is directed to verify this fact and then re-adjudicate this issue. 21. Ground Nos. 32 and 33 are consequential and does not require any specific adjudication. ITA No 886 of 2024 Broadridge Financial Solutions India Pvt Ltd Page 17 of 17 22. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the Open Court on 19th February, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 19th February 2025 Vinodan/sps Copy to: S.No Addresses 1 Broadridge Financial Solutions (India) Private Limited, Survey No.64, Adjacent to Cyber Towers, Hi-Tech City, Madhapur, Hyderabad 500081 2 Dy. CIT, Circle 1(1) IT Towers, AC Guards, Masab Tank, Hyderabad-28 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "
AI Insights
The case involves Broadridge Financial Solutions (India) Pvt. Ltd, which appealed against the assessment order for the assessment year 2020-21. The primary issues in the appeal were related to transfer pricing adjustments proposed by the Transfer Pricing Officer (TPO) concerning international transactions for software development services and interest on delayed receivables, which were covered under an Advance Pricing Agreement (APA). The Tribunal found that the additions made by the Assessing Officer were in disregard of the APA and amounted to double taxation. Other issues included disallowances for delayed payment of employees' contributions to PF and ESI, which were dismissed based on Supreme Court precedent, and a claim for deduction under section 80G for donations, which was admitted and directed for verification. The Tribunal also addressed the issue of interest under section 115P for delayed payment of dividend distribution tax, directing a re-examination of the payment status.
