M/s. Ansys Software Pvt Ltd, Bengaluru V. Income Tax Officer, Ward-1(1), International Taxation, Bengaluru

ITA 515/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6931 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 23-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL ANAND
• Assessee Lawyers: V CHANDRASEKHAR
• Keywords: Opportunity of being heard; TDS; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NOS.512 TO 515/BANG/2018 ASSESSMENT YEAR : 2007-08 TO 2010-11 M/S ANSYS SOFTWARE PVT. LTD., KABRA EXCELSIOR, 3 RD FLOOR, NO.6A, 7 TH MAIN, 1 ST BLOCK, KORAMANGALA, BENGALURU 560 034. PAN AADCA 1658 E. VS. THE INCOME-TAX OFFICER, WARD-1(1), BENGALURU. APPELL ANT RESPONDENT ASSESSEE BY : SHRI V CHANDRASEKHAR, ADVOCATE REVENUE BY : SHRI VIMAL ANAND, ADDL CIT DATE OF HEARING : 02.05.2019 DATE OF PRONOUNCEMENT : 05.05.2019 O R D E R PER BENCH: ALL THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-12, BENGALURU AND THEY R ELATE TO THE ASSESSMENT YEARS 2007-08 TO 2010-11. IN ALL THESE APPEALS, THE ASSESSEE IS CHALLENGING THE ORDER PASSED BY LD CIT( A) CONFIRMING THE INTEREST CHARGED U/S 201(1A) OF THE ACT FOR BEL ATED PAYMENT OF TDS AMOUNT. ITA NOS.512 TO 515/BANG/2018 PAGE 2 OF 5 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE COMPANY IS AUTHORISED TO DISTRIBUTE LICENSE FOR SOF TWARE PRODUCTS AS PER THE AGREEMENT ENTERED BY THE ASSESSEE WITH M/S ANSYS INC. USA. THE PAYMENT TO THE USA COMPANY FOR PURCHASE O F SOFTWARE LICENCES WAS MADE AFTER DEDUCTION OF TDS. THE AO N OTICED THAT THE ASSESSEE HAS REMITTED THE TDS AMOUNT BELATEDLY AND ACCORDINGLY LEVIED INTEREST U/S 201(1A) OF THE ACT IN ALL THE Y EARS UNDER CONSIDERATION. 3. THE ASSESSEE CHALLENGED THE ORDERS SO PASSED BY THE AO BY FILING APPEALS BEFORE THE LD CIT(A), INTER ALIA, CO NTENDING THAT THERE WAS NO OBLIGATION ON ITS PART TO DEDUCT TDS AND HEN CE THE AO WAS NOT JUSTIFIED IN CHARGING INTEREST U/S 201(1A) OF T HE ACT. HOWEVER, DESPITE GIVING SEVERAL OPPORTUNITIES, THE ASSESSEE EITHER SOUGHT ADJOURNMENT (OR) DID NOT REPLY (OR) PRAYED FOR ABEY ANCE BY STATING THAT THE QUESTION AS TO WHETHER THE PAYMENT MADE FO R PURCHASE OF SOFTWARE IS ROYALTY OR NOT? IS PENDING BEFORE HONB LE SUPREME COURT. IN VIEW OF NON-COOPERATION, THE LD CIT(A) P ROCEEDED TO PASS THE ORDER AND CONFIRMED THE INTEREST CHARGED BY THE AO BY OBSERVING THAT THE HONBLE JURISDICTIONAL KARNATAKA HIGH COURT HAS HELD THE PAYMENTS FOR PURCHASE OF SOFTWARE AS ROYAL TY IN THE CASE OF SAMSUNG ELECTRONICS COMPANY LTD (345 ITR 494). ACC ORDINGLY THE LD CIT(A) HELD THAT THE ASSESSEE IS LIABLE TO DEDUC T TAX AT SOURCE FROM THE PAYMENT MADE TO USA COMPANY. SINCE THE TD S AMOUNT DEDUCTED BY THE ASSESSEE WAS REMITTED BELATEDLY, TH E LD CIT(A) CONFIRMED THE ORDERS PASSED BY THE AO AND ACCORDING LY DISMISSED THE APPEALS FILED BY THE ASSESSEE IN ALL THE YEARS. ITA NOS.512 TO 515/BANG/2018 PAGE 3 OF 5 4. AGGRIEVED, THE ASSESSEE HAS FILED THESE APPE ALS BEFORE US. 5. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICE THAT THE LD CIT(A) HAS, IN EFFECT, PASSED THE ORDERS EX- PARTE, AS THE ASSESSEE WAS SEEKING ADJOURNMENT FROM TIME TO TIME ON ONE REASON OR ANOTHER. HENCE THERE WAS NO OCCASION FOR THE AS SESSEE TO FURNISH ITS CONTENTIONS AGAINST THE LEVY OF INTERES T U/S 201(1A). IN OUR VIEW, THE ASSESSEE SHOULD BE PROVIDED WITH PROP ER OPPORTUNITY OF BEING HEARD. ACCORDINGLY WE SET ASIDE THE ORDER S PASSED BY LD CIT(A) IN ALL THE YEARS UNDER CONSIDERATION AND RES TORE THEM TO HIS FILE FOR ADJUDICATING THE ISSUES AFRESH, AFTER AFFO RDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALS O DIRECT THE ASSESSEE TO FULLY CO-OPERATE WITH THE LD CIT(A) BY FURNISHING ALL THE INFORMATION AND EXPLANATIONS FOR EXPEDITIOUS DISPOS AL OF APPEALS. 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESS EE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH MAY, 2019. SD/ - (PAVAN KUMAR GADALE) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 5 TH MAY, 2019. / VMS / ITA NOS.512 TO 515/BANG/2018 PAGE 4 OF 5 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NOS.512 TO 515/BANG/2018 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..