HSBC ELECTRONIC DATA PROCESSING INDIA PRIVATE LIMITED, ,HYDERABAD V. ADDL. CIT., RANGE-2, HYDERABAD

MA 43/HYD/2024

AI Insights

The case involves M/s. HSBC Electronic Data Processing India Pvt. Ltd. filing a Miscellaneous Application under Section 254(2) of the Income Tax Act, 1961, seeking modification of an earlier ITAT order. The Tribunal had previously dismissed the assessee's appeal regarding the deduction under Section 10A for the Assessment Year 2010-11. The assessee argued that the Tribunal had erred by not following a decision from a co-ordinate bench in a different assessment year, which favored the assessee. However, the Tribunal found that the issues in the cited case were not comparable to the present case, as the specific deduction under Section 10A was not addressed in the earlier decision. The Tribunal also dismissed the assessee's reference to a Special Bench decision on Section 10B, noting that it could not be applied mutatis mutandis to Section 10A. The Tribunal partly allowed the application to address the unadjudicated grounds related to the computation of the deduction under Section 10A.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29150 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2010-2011
• Other Referred Cases: Woodward Governor India (P.) Ltd. (2009) 179 Taxmann 326 (SC), CIT Vs. Reliance Telecom Ltd (2021) 133 taxmann.com 41 (SC), Maral Overseas Limited (2012) 136 ITD 177
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. KUMARAN
• Assessee Lawyers: RAJAN VORA
• Keywords: Set aside
• Section: 254(2); 10B

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER M.A No.43/Hyd/2024 (In ITA No.1613/Hyd/2017) Assessment Year: 2010-11 M/s. HSBC Electronic Data Processing India Pvt. Ltd. Hyderabad. PAN : AAACH8235M. Vs. The Additional Commissioner of Income Tax, Range – 2, Hyderabad. (Appellant) (Respondent) Assessee by: Shri Rajan Vora, C.A. Revenue by: Shri R. Kumaran, Sr.D.R. Date of hearing: 20.12.2024 Date of pronouncement: 13.02.2025 O R D E R PER MADHUSUDAN SAWDIA, A.M.: This Miscellaneous Application (“M.A.”) has been filed by M/s. HSBC Electronic Data Processing India Pvt. Ltd. (“the assessee”) u/s.254(2) of the Income Tax Act, 1961 (“the Act”) with a request to modify the order passed by the co-ordinate bench of ITAT in ITA No.1613/Hyd/2017 dated 05.08.2024 (“impugned order”). 2 MA 43/Hyd/2024 2. At the outset, the Ld.AR has submitted that, the Tribunal has committed a mistake by not following the decision of jurisdictional Tribunal in assessee’s own case for A.Y. 2012-13 and therefore, the order of the Tribunal is required to be recalled. 3. Per contra, Ld.DR submitted that, the Tribunal has given a cogent and reasoned reasoning while dismissing the ground of the assessee and it is not permissible for the Tribunal to revisit the issue on merits and accordingly, it was submitted that, the issue no.5 raised by the assessee is required to be dismissed. 4. We have heard the rival submissions and perused the material on record. Admittedly, in the present case, after going through the records, the Tribunal at para 10.4 of its order dated 05.08.2024 has decided the issue against the assessee. The submissions of the assessee that the issue is covered in favour of the assessee by the decision of co-ordinate Bench of the Tribunal in their case of A.Y. 2012-13 is not correct. The co-ordinate Bench of the Tribunal in the case of the assessee for A.Y. 2012-13 in ITA No.1249/Hyd/2017 dt.16.04.2021 after relying upon the decision of the hon'ble Supreme Court in the case of Woodward Governor India (P.) Ltd. (2009) 179 Taxmann 326 (SC) had recorded the finding that the addition made by Ld. AO on account of unrealised hedging loss on forwarded contract is required to be deleted. In the present case, the issue before us is not whether the unrealised hedging loss on forwarded contract is an allowable expenditure or not. However, the issue before us is, whether the profit or gains 3 MA 43/Hyd/2024 earned by the assessee from hedging with forward contract / marked to market gain is allowable as deduction u/s. 10A of the Act or not. Admittedly, the issue of deduction u/s. 10A was not the subject matter of the appeal in ITA No.1249/Hyd/2017. Therefore, the contention of the assessee under issue no.5 in the present M.A. is without any merit and accordingly, is required to be dismissed. 5. The second issue raised before us is that, the decision of Special Bench in the case of Maral Overseas Limited reported in (2012) 136 ITD 177 was not considered by the ITAT while disallowing the deduction u/s.10A of the Act. Firstly, this decision of the Tribunal was not cited before us. Moreover, the issue before us is relating to the allowbility of deduction u/s 10A of the Act, whereas in the case of Marel Overseas Limited (surpa), the issue before the Special Bench was with respect to the deduction u/s 10B of the Act. In our considered opinion, the finding given by the Special Bench in respect to Section 10B of the Act cannot be mutatis and mutandis applicable to deduction u/s 10A of the Act and therefore, we do not find any merit in this submission also and accordingly this submission is also required to be dismissed. In view of the above, we do not find any reason to interfere with the order passed by us. Moreover, we may fruitfully rely upon the decision of hon'ble Supreme Court in the case of CIT Vs. Reliance Telecom Ltd reported in (2021) 133 taxmann.com 41 (SC), wherein it was held that the Tribunal cannot revisit its earlier order and recall the same. 4 MA 43/Hyd/2024 6. We may draw support from the decision of the co-ordinate Bench of the Tribunal in the case of Syed Sikander Ali, vide M.A. No.37/Hyd/2022 order dt.29.07.2022, wherein the Tribunal has held as under:- “4. We have gone through the record in the light of the submissions made on either side. The question now that arises for our consideration is whether any error in judgment which alleged to have been the result of non-consideration of the submissions made on behalf of the assessee in the perspective in which they were projected, would constitute an error apparent on record, so as to be recalled by the Tribunal in exercise of powers under section 254(2) of the Act. 5. Under section 254(2) of the Act, the Tribunal may at any time within six months from the end of the month in which the order was passed, with a view to rectify any mistake apparent from record, amend any order passed by it under sub-section (1), and shall make such an amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. It is, therefore, incumbent upon the miscellaneous applicant to point out that there is mistake in the order that is apparent from the record. This aspect has been considered by the Hon'ble Apex Court in the case of Reliance Telecom Ltd. (supra). 6. In the case of Reliance Telecom Ltd. (supra), Hon'ble Apex Court held that in a case where a detailed order was passed by the ITAT, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act; that if the assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the assessee was to prefer the appeal before the High Court; that, therefore, as such, the order passed by the ITAT recalling its earlier order which has been passed in exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act; and that, therefore, the order passed by the ITAT recalling its earlier order is unsustainable, which deserves to be set aside. It was further observed that merely because parties might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act, and the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Hon'ble Apex Court held that even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its 5 MA 43/Hyd/2024 earlier order which is an erroneous order, cannot be accepted, and if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the assessee was to prefer an appeal before the High Court. Observing so, the Hon'ble Supreme Court, in the case of Reliance Telecom Ltd. (supra), quashed the order passed by the ITAT, recalling the earlier order.” 7. The next alternative contention raised by the assessee is with respect to non adjudication of ground no.6(b) & 6(c) which are as under : “6(b) Without prejudice to the above, erred in not excluding the foreign exchange gain from the total turnover for the purpose of computation of deduction under Section 10A of the Act. 6(c) Without prejudice to the above, erred in reducing the hedging gain ofRs.106,68,32,843 from the profits of the business instead of considering the net amount of Rs.63,66,53,406 credited to profit and loss account for the purpose of computing deduction u/s.10A of the Act.” 7.1. In this regard, during the course of hearing, the Ld.AR has drawn our attention to Para 20.16 at page 851 of the paper book. On the basis of the above, it was submitted that the Tribunal while passing the order has not adjudicated the grounds and therefore, non-adjudication of the grounds raised by the assessee is a fatal and for that purposes, the order is required to be modified. 8. On the other hand, the Ld. DR opposed the M.A. filed by the assessee, but could not dispute that the said grounds were indeed raised during the argument. 6 MA 43/Hyd/2024 9. We have heard the rival contentions and also gone through the record in the light of the submissions made on either side. Admittedly, this matter was heard on 06.06.2024 and it appears that the alternate ground nos.6(b) & 6(c) raised by the assessee were not addressed in the impugned order. In the interest of justice, the order dated 06.06.2024 of the Tribunal is partially recalled to the limited extent of adjudicating the ground nos.6(b) & 6(c). Accordingly, this contention of the assessee is allowed. 10. The next issue i.e. issue no.4, raised by the assessee is relating to finding of fact and law, which is not the subject of rectification of the appeal u/s 254(2) of the Act and hence, the same is dismissed. 11. In the result, the Miscellaneous Application filed by the assessee is partly allowed. The Registry is directed to fix the matter in due course for adjudication of ground Nos.6(b) and 6(c), after issue the notice to both the parties. Order pronounced in the Open Court on 13th February, 2025. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated .02.2025. * Reddy gp/Sr.P.S. 7 MA 43/Hyd/2024 Copy to: S.No Addresses 1 M/s. HSBC Electronic Data Processing India Pvt. Ltd., Plot Nos.3 and 4, Survey No.64, Health City, Hyderabad – 500081. 2 The Addl CIT Range – 2/ DCIT, Circle – 2(2), Hyderabad. 3 Pr.CIT – 2, Hyderabad. 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "