M/S. DISCOVERTURE SOLUTION(INDIA) PVT. LTD. V. DY. COMMNR. OF INCOME TAX, CIRCLE 2(1), BBSR

RVWPET/5/2023

AI Insights

M/s Discoverture Solution (India) Pvt. Ltd. sought a review of the High Court's earlier decision which dismissed their appeal and vacated an interim order regarding tax exemptions under Sections 10(A) and 10(B) of the Income Tax Act. The petitioner argued that the court had improperly re-formulated a question in their judgment without addressing the originally framed questions. The court, referencing a Supreme Court decision, clarified that the re-formulation was necessary to accurately reflect the legal issues and ensure compliance with statutory requirements. Consequently, the review petition was dismissed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 761646 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 15-09-2023
• Assessment Year: misc
• Other Referred Cases: Tanuku Taluk Village Officers' Association v. Tanuku Municipality and others, (2019) 4 SCC 397
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: T K SATAPATHY
• Assessee Lawyers: S RAY
• Keywords: Review petition; Software Technology Park; Special economic zone; Tax Exemption; Form No.56G
• Section: 260A; 10(b); 10(a); 100(5)

Judgement Text

" Page 1 of 5 IN THE HIGH COURT OF ORISSA AT CUTTACK RVWPET No. 5 of 2023 M/s Discoverture Solution (India) Pvt. Ltd., Bhubaneswar ….. Petitioner Mr. S. Ray, Sr. Adv. Vs. Deputy Commissioner of Income Tax, Circle-2, BBSR & Anr. ….. Opposite Parties Mr. T.K. Satapathy, Sr. Standing Counsel, Income Tax Deptt. CORAM: DR. JUSTICE B.R. SARANGI MR. JUSTICE MURAHARI SRI RAMAN ORDER 15.09.2023 Order No. 05. This matter is taken up by hybrid mode. 2. Heard Mr. S. Ray, learned Senior Counsel appearing for the petitioner and Mr. T.K. Satapathy, learned Senior Standing Counsel for Income Tax Department. 3. The petitioner has filed this petition seeking review of the order dated 08.12.2022 passed in ITA No. 3 of 2017, by which this Court dismissed the appeal and also vacated the interim order passed earlier. 4. Mr. S. Ray, learned Senior Counsel appearing for the petitioner contended that though this Court formulated two questions, which was mentioned in paragraph-2 of the order dated 08.12.2022, but, without answering the same, third question has been formulated in paragraph-18 of the order itself. Therefore, the petitioner has filed this petition seeking review of the order dated 08.12.2022. He has also placed reliance on the judgment of the apex Court in the case of Tanuku Taluk Village Officers’ Association v. Tanuku Municipality and others, (2019) 4 SCC 397, by which the apex Court holding that disposal of second appeal by High Court by answering question(s) which was/were not framed either at admission of second appeal or framed without ensuring compliance with mandatory procedure prescribed in proviso to Section 100 (5) is not legally sustainable, set aside the order impugned. 5. Mr. T.K. Satapathy, learned Senior Standing Counsel for Income Page 2 of 5 Tax Department vehemently contended that earlier this Court had formulated two questions and question no.1 being not framed in the correct manner, in paragraph-18 of the order the Court re-formulated the same and consequentially answered the same. Thereby, no illegality or irregularity has been committed so as to cause interference with the order dated 08.12.2022. Consequentially, dismissal of the writ petition is sought for. 6. Having heard learned counsel for the parties and after going through the records, this Court finds that the petitioner had filed ITA No. 3 of 2017 with the following prayers:- “ ( a ) Answer the Question of law framed above and your Lordship may also be passed frame any other Questions of law to answer the same in the interest of Justice. (b) Pass appropriate Order/ Orders holding the findings of the learned Appellate Tribunal passed in ITA No.50/CTK/2015 (Annexure-6) to be unjust, unlawful and be pleased to set aside the same. (c) Allow the claim of exemption of Rs.3, 67115,136.00 made by the Appellant to be just and proper U/s.10 (A) or U/s.10 (B) of the I.T. Act. (d) Hold the Act of the Respondent vide Order dt: 03.07.2015 (Annexure -7) revising the Assessed income of the Appellant for A.Y. 2011=12 at 14, 80,454.00 (income adjusted U/s.115.113 Rs. 3, 93, 09,436.00) to be just and correct. (e) Pass an Order directing the Respondent not to initiate any coercive measure against. The Appellant following the Order of Appellate Tribunal (Annexure-6)” In paragraph-13 of the appeal, the petitioner had formulated the following substantial questions of law:- “13. That under the above facts and circumstances necessary substantial QUESTIONS OF LAW needs to be formed U/s.260(A) of the I.T. Act and for the sake of convenience, the Appellant states the following for appreciation of this Hon'ble Court:- (i) Whether under the facts and circumstances, the Appellant even being under Software Technology Park (as defined in Sec.10 (A)(2) (6) of I.T Act, the learned Tribunal was Page 3 of 5 justified to reject the Tax Exemption claimed U/s.10(A) of the Act stating the reason the Appellant is not a unit under Special Economic Zone. (ii) Whether under the facts and circumstances, in order to seek exemption under Section 10 (B) of the Act, it would be a mandatory requirement for the appellant to file Form No.56 G within the stipulated period granted under Section 139 (1) of the Act. (iii) Whether under the facts and circumstances there exist any issues to be decided by the Appellate Tribunal when the Respondent himself settles the issue revising the Original Assessment and Original Demand (U/s.156 of I.T. Act) and in such circumstances whether the 2nd Appeal No.I.T.A-50/CTK/2015 do not become infructuous.” 7. While entertaining the aforesaid appeal, this Court, vide order dated 27.11.2017, admitted the appeal on the following substantial questions of law:- “I) Whether under the facts and circumstances of the case, the appellant even being under Software Technology Part (defined in Section 10(A)(2) (6) of I.T. Act, the learned Tribunal was justified to reject the Tax Exemption claimed U/s.10(A) of the Act stating the reason that the appellant is not a unit under Special Economic Zone. III. Whether under the facts and circumstances there exists any issues to be decided by the Appellant Tribunal when the respondent himself settles the issue revising the Original assessment and original demand (U/s.156 of I.T. Act) and in such circumstances whether the 2nd Appeal N o. I.T.A. -50/CTK/2015 do not become infructuous.” 8. When the matter was heard on 08.12.2022, the questions, on the basis of which the appeal was admitted on 27.11.2017, were taken into consideration and the same was noted in paragraph-2 of the order itself and, as such, after considering the contention raised by learned counsel appearing for the respective parties, this Court passed the following orders in paragraphs-13 to 17 of the order itself:- “1 3 . In other words, before the AO, the Assessee maintained that it was claiming exemption only under Page 4 of 5 Section 10B of the Act and not Section 10A of the Act. 14. This claim of deduction under Section 10B of the Act by the Assessee was disallowed by the AO for non- compliance of the mandatory requirement of filing Form- 56G. This conclusion of the AO has been concurred with by the ITAT. 15. Before this Court, although Mr. Sidhartha Ray, learned counsel appearing for the Appellant began his arguments by trying to justify how the Assessee would in fact be entitled to claim deduction under Section 10A of the Act, it became plain that throughout the assessment proceedings, the Appellant/Assessee had claimed exemption only under Section 10B of the Act. 16. Even from the order of the CIT (A) which was in favour of the Assessee, it is seen that the Assessee maintained its entitlement to claim deduction under Section 10B of the Act. The decision of the CIT (A) was also to the same effect as can be seen from the following conclusion in Para-7(b) of the order of the CIT (A): “(b) However, as the AO did not correctly consider the claim as above, the Appellant was forced to change tack and argued for a claim of exemption u/s 10B of the Act. It is again clear that the Appellant is entitled to the claim of exemption/deduction u/s 110B and had also been claiming the same for the several preceding assessment years which claim has remained uncontested by the Department till date.” 17. With the Assessee having throughout maintained that its claim for deduction only under Section 10B of the Act, it cannot be allowed now to turn around and ask that its claim for deduction should be considered under Section 10A of the Act.” 9. Having not satisfied with question no.1, this Court re-formulated question no.1 in pagraph-18 of the order itself to the following effect: “18. Therefore, the Question No.(i) framed by this Court which proceeds on the basis of the Assessee’s claim under Section 10A of the Act has not been correctly framed. In terms of the Proviso to Section 260A of the Act, this Court considers it necessary to reformulate Question No. (i) as under: “Whether the Assessee was entitled to exemption under Section 10B of the Act as claimed by it?” Consequentially, this Court answered the above question no.1 in Page 5 of 5 paragraph-19 of the order dated 08.12.2022. So far as question no.2 is concerned, this Court answered the same in paragraph-21 of the order itself. 10. It is contended that without answering the two questions formulated earlier, the Court should not have re-formulated third question in paragraph-18 of the order itself, in view of the ratio decided in Tanuku Taluk Village Officers’ Association (supra), which is applicable to the present case. But on perusal of the judgment of the apex Court in the case of Tanuku Taluk Village Officers’ Association (supra), it appears that the said case relates to Section 100 of the Civil Procedure Code, 1908, where disposal of second appeal has been made by the High Court by answering the question which was not framed either at the time of admission of the second appeal or framed without ensuring compliance with mandatory procedure prescribed in proviso to Section 100 (5) and, therefore, the apex Court held that the same is not legally sustainable. But the law laid down by the apex Court has no application to the facts and circumstances of the present case. In the present case, since question no.1 had been formulated erroneously, the same has been re-formulated in paragraph-18 of the order impugned and, as such, the same has been answered consequentially. Thereby, no illegality or irregularity has been committed by this Court in passing the order dated 08.12.2022 in ITA No. 3 of 2017 so as to review the same. More so, no ground for review is made out by the petitioner so as to review the aforesaid order. 11. In the above view of the matter, the review petition merits no consideration and the same is hereby dismissed. Ashok (DR. B.R. SARANGI) JUDGE (M.S. RAMAN) JUDGE Digitally Signed Signed by: ASHOK KUMAR JAGADEB MOHAPATRA Designation: Personal Assistant Reason: Authentication Location: HIGH COURT OF ORISSA Date: 18-Sep-2023 11:05:13 Signature Not Verified "