SLK Software Services Private Limited, Bangalore V. CIT, Bangalore

ITA 604/BANG/2015

• Counselvise Citation: 60421114 RSA 2015
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWAL JT
• Assessee Lawyers: K R VASUDEVAN
• Keywords: Revised return
• Section: 90

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.604/BANG/2015 ASSESSMENT YEAR : 2010-11 SLK SOFTWARE SERVICES PVT. LTD., NO.563/564, NIRAN ARCADE, NEW BEL ROAD, SANJAY NAGAR, BANGALORE 560 047. PAN: AAECS 7548E VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(1) [FORMERLY 12(3)], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI K.R. VASUDEVAN, ADVOCATE RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL, JT. CIT(DR) DATE OF HEARING : 30.07.2015 DATE OF PRONOUNCEMENT : 07.08.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 25.8.2014 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO ASSESSM ENT YEAR 2010-11. ITA NO.604/BANG/2015 PAGE 2 OF 6 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS FOLL OWS:- 1. CLAIM OF FOREIGN TAX CREDIT RS. 21,32,548 1.1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEA LS) [CIT(A)] HAS ERRED IN NOT GRANTING THE CLAIM OF F OREIGN TAX CREDIT AMOUNTING TO RS.2,132,548. 3. THE ASSESSEE IS A COMPANY. IT PROVIDES SOFTWARE DEVELOPMENT SERVICES TO ITS CUSTOMERS. IT IS A SOFTWARE TECHNO LOGY PARK OF INDIA (STPI) UNIT ENTITLED TO CLAIM DEDUCTION U/S.10A OF THE ACT . IT FILED THE ORIGINAL RETURN OF INCOME ON 28.9.2010 DECLARING A TOTAL INC OME OF RS 2,386,058/-FOR THE AY 2010-11. SUBSEQUENTLY, A REVISED RETURN WAS FILED ON 29.03.2012 FOR THE PURPOSE OF CLAIMING FOREIGN TAX CREDIT (FTC) OF RS.21,32,548. THE ASSESSEE WAS LIABLE TO PAY TAXES AS PER THE PROVISI ONS OF MINIMUM ALTERNATE TAX (MAT). 4. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF ASSESSEE FOR GRANT OF FTC OF RS.21,32,548. HOWEVER, DURING THE ASSESS MENT PROCEEDINGS, THE ASSESSEE INADVERTENTLY SUBMITTED THAT IT MISSED CLAIMING THE CREDIT FOR SUCH TAXES IN ITS RETURN OF INCOME AS FTC. IT WAS A LSO SUBMITTED THAT AS THE TIME LIMIT FOR FILING THE REVISED RETURN HAD EXPIRE D ON 31 MARCH 2012, IT IS SUBMITTING THE REVISED STATEMENT OF INCOME AND TAXE S REQUESTING THE CREDIT FOR SUCH FOREIGN TAXES PAID. ITA NO.604/BANG/2015 PAGE 3 OF 6 5. THE AO WITHOUT CONSIDERING THE REVISED RETURN OF INCOME PASSED THE ASSESSMENT ORDER BASED ON THE REVISED STATEMENT OF INCOME AND TAXES FILED BY THE ASSESSEE AND DID NOT GRANT CREDIT FOR FOREIGN TAXES PAID. 6. ON APPEAL BEFORE THE CIT(APPEALS), THE SAME FACT S WERE REITERATED AS WAS SUBMITTED BEFORE THE AO. THE CIT(A) DID NOT GRANT THE CLAIM FOR FOREIGN TAXES ON THE GROUND THAT THE SAME IS NOT CL AIMED IN RETURN OF INCOME. THE ASSESSEE SUBMITTED THE FACT OF NOT CLA IMING CREDIT FOR FOREIGN TAXES BASED ON ITR-V (ACKNOWLEDGEMENT OF FILING THE RETURN OF INCOME), WHICH DOES NOT DISCLOSE CREDIT FOR FOREIGN TAXES SE PARATELY. THE ASSESSEE NOW ON PERUSAL OF THE INCOME-TAX RETURN (ITR-6), SU BMITTED THAT IT HAD CLAIMED THE CREDIT FOR FOREIGN TAXES IN THE REVISED RETURN. IT WAS THEREFORE SUBMITTED THAT IT IS ELIGIBLE TO CLAIM CREDIT FOR F OREIGN TAXES AS THE SAME WAS CLAIMED IN THE REVISED RETURN OF INCOME. 7. THE LD. DR SUBMITTED THAT THE MATTER REQUIRES VE RIFICATION BY THE AO. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM A PERUSAL OF THE ANNEXURES FILED BY THE ASSESSEE ALONG WITH THE WRIT TEN SUBMISSIONS FOR A.Y. 2010-11, IT IS OBSERVED THAT THE ASSESSEE HAD ELECT RONICALLY FILED ITS RETURN ON 28.9.2010. IN THE SAID RETURN, IN COL. NO.10, N O TAX RELIEF U/S. 90 OR 91 HAS BEEN CLAIMED. THE ASSESSEE FILED A REVISED RET URN ON 29.3.2012 ELECTRONICALLY. IN COL. 10 OF THIS RETURN, THE ASSE SSEE HAD CLAIMED RELIEF U/S. 90 OF RS.21,32,548. THE RETURN HAS BEEN FILED BY T HE ASSESSEE WITHIN THE TIME CONTEMPLATED U/S. 139(1) OF THE ACT. NEITHER THE AO NOR THE ITA NO.604/BANG/2015 PAGE 4 OF 6 CIT(APPEALS) CONSIDERED THE CLAIM OF ASSESSEE IN TH E REVISED RETURN OF INCOME FILED. WE ARE THEREFORE OF THE VIEW THAT TH E CLAIM OF ASSESSEE FOR FTC HAS BEEN MADE IN THE RETURN OF INCOME AND HAD B EEN OMITTED TO CONSIDERED BY THE AO AND CIT(APPEALS). WE THEREFOR E DEEM IT FIT AND PROPER TO SET ASIDE THE ORDER OF THE CIT(APPEALS) O N THIS ISSUE AND REMAND THE SAME TO THE ASSESSING OFFICER FOR FRESH CONSIDE RATION IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE. GROUND NO.1 IS ACCORDING LY ALLOWED. 9. GROUND NO.2 IS WITH REGARD TO LEVY OF INTEREST U /S. 234C OF THE ACT. IT IS THE PLEA OF THE ASSESSEE THAT LEVY OF INTEREST U /S. 234C IS ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME. THE PROVISIO NS ARE OF SECTION 234C ARE AS FOLLOWS:- INTEREST FOR DEFERMENT OF ADVANCE TAX. 234C. (1) WHERE IN ANY FINANCIAL YEAR, ( A ) THE COMPANY WHICH IS LIABLE TO PAY ADVANCE TAX UN DER SECTION 208 HAS FAILED TO PAY SUCH TAX OR ( I ) THE ADVANCE TAX PAID BY THE COMPANY ON ITS CURREN T INCOME ON OR BEFORE THE 15TH DAY OF JUNE IS LESS THAN FIFTEEN PER CENT OF THE TAX DUE ON THE RETURNED INCOME OR THE AMOUNT OF SUC H ADVANCE TAX PAID ON OR BEFORE THE 15TH DAY OF SEPTEMBER IS LESS THAN FORTY-FIVE PER CENT OF THE TAX DUE ON THE RETURNED INCOME OR T HE AMOUNT OF SUCH ADVANCE TAX PAID ON OR BEFORE THE 15TH DAY OF DECEMBER IS LESS THAN SEVENTY-FIVE PER CENT OF THE TAX DUE ON T HE RETURNED INCOME, THEN, THE COMPANY SHALL BE LIABLE TO PAY SI MPLE INTEREST AT THE RATE OF ONE PER CENT PER MONTH FOR A PERIOD OF THREE MONTHS ON THE AMOUNT OF THE SHORTFALL FROM FIFTEEN PER CENT O R FORTY-FIVE PER CENT OR SEVENTY-FIVE PER CENT, AS THE CASE MAY BE, OF THE TAX DUE ON THE RETURNED INCOME; ITA NO.604/BANG/2015 PAGE 5 OF 6 ( II ) THE ADVANCE TAX PAID BY THE COMPANY ON ITS CURREN T INCOME ON OR BEFORE THE 15TH DAY OF MARCH IS LESS THAN THE TA X DUE ON THE RETURNED INCOME, THEN, THE COMPANY SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT ON THE AMOUNT OF THE SHORTFALL FROM THE TAX DUE ON THE RETURNED INCOME: 10. FROM A PLAIN READING OF THE PROVISIONS OF SECT ION 234C, IT IS CLEAR THAT LEVY OF INTEREST U/S. 234C OF THE ACT IS ON TH E RETURNED INCOME. WE THEREFORE DIRECT THE AO TO LEVY INTEREST ON THE RET URNED INCOME. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 11. GROUND NO.3 RAISED BY THE ASSESSEE IS WITH REGA RD TO CHARGING OF INTEREST U/S. 234D OF THE ACT, WHICH IS CONSEQUENTI AL AND AO IS DIRECTED TO GIVE CONSEQUENTIAL RELIEF. 12. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS PA RTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF AUGUST, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 7 TH AUGUST, 2015. /D S/ ITA NO.604/BANG/2015 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.