Asst.C.I.T., Bangalore V. M/s ANZ Operations & Technology Private Limited, Bangalore

ITA 830/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7404 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJASHEKAR REDDY L
• Assessee Lawyers: P K PRASAD; UMASHANKAR GAUTAM
• Keywords: Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AN D SHRI GEORGE GEORGE K, JUDICIAL MEMBER IT (TP) A NO. 830/ BANG/201 6 ASSESSMENT YEAR : 2007 - 08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), BANGALORE. VS. M/S. ANZ OPERATIONS & TECHNOLOGY PVT. LTD., # SEZ UNIT RMZ ECOWORLD, CAMPUS SA, GROUND FLOOR AND LEVELS 4 TO 9, SARJAPURMARTHAHALLI OUTER RING ROAD, DEVARABESANAHALLI VILLAGE, VARTHURGOBLI, BANGALORE EAST TALUK, BANGALORE-560 103. PAN: AABCA 9002G APPELLANT RESPONDENT C.O. NO. 31/BANG/2017 (IN IT(TP)A NO. 830/BANG/2016) ASSESSMENT YEAR : 200 7 - 0 8 M/S. ANZ OPERATIONS & TECHNOLOGY PVT. LTD., # SEZ UNIT RMZ ECOWORLD, CAMPUS SA, GROUND FLOOR AND LEVELS 4 TO 9, SARJAPURMARTHAHALLI OUTER RING ROAD, DEVARABESANAHALLI VILLAGE, VARTHURGOBLI, BANGALORE EAST TALUK, BANGALORE-560 103. PAN: AABCA 9002G VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI P.K. PRASAD, ADVOCATE & SHRI UMASHANKAR GAUTAM, ADVOCATE REVENUE BY : SHRI RAJASHEKAR REDDY L., CIT (DR) DATE OF HEARING : 30 . 10 .201 7 DATE OF PRONOUNCEMENT : 31 .10 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND CO IS FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER OF CIT(A) -I, BANGAL ORE DATED 29.01.2016 FOR ASSESSMENT YEAR 2007-08. IT(TP)A NO. 830/BANG/2016 & C.O. NO. 31/BANG/2017 PAGE 2 OF 4 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (APPEALS), IN SO FA R AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) ERRED IN DIRECTING THE AO TO RECOMPUT E THE DEDUCTION U/S.10A AFTER REDUCING TRAVEL EXPENSES TO THE TUNE OF RS.11,44,86,655/- FROM THE EXPORT TURNOVER AS WELL AS THE TOTAL TURNO VER WHILE CALCULATING DEDUCTION U/S.10A FOLLOWING THE RATIO L AID DOWN BY THE HON'BLE HIGH COURT IN THE CASE OF TATA ELXSI LIMITE D IN 349 ITR 98 WITHOUT APPRECIATING THE FACT THAT THERE IS NO PROV ISION IN SECTION 10A THAT SUCH EXPENSES SHOULD BE REDUCED FROM THE TOTAL TURNOVER ALSO, AS CLAUSE (IV) OF THE EXPLANATION TO SECTION 10A PROVI DES THAT SUCH EXPENSES ARE TO BE REDUCED ONLY FROM THE EXPORT TUR NOVER. 3. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE JURISDICTIONAL HIGH COURT'S DECISION IN THE CASE OF TATA ELXSI LIM ITED 349 ITR 98 HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPE AL HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT, HENCE NOT REACHED FINALITY. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEA RING OF APPEAL. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CO ARE AS UNDER. 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) - I, BANGALORE ('LEARNED CIT(A)) ERRED IN NOT ADJUDICAT ING ON GROUND NOS. 1, 2 AND 3 IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE REASSESSMENT PROCEE DINGS UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961 ('THE ACT'). 2. THAT THE LEARNED CIT(A) ERRED IN NOT QUASHING T HE ASSESSMENT ORDER DATED JUNE 27, 2014 PURPORTEDLY PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT AS BEING BAD IN LA W. 3. THAT THE LEARNED CIT(A) ERRED IN NOT HOLDING TH AT THE PROCEEDINGS UNDER SECTION 147 WAS INITIATED AFTER FOUR YEARS FR OM THE END OF ASSESSMENT YEAR IN APPEAL WAS IN EXCESS OF JURISDIC TION WITHOUT ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. 4. THAT THE RESPONDENT CRAVES LEAVE TO ADD TO AND/ OR TO ALTER, AMEND, RESCIND, MODIFY THE GROUNDS HEREIN ABOVE OR PRODUCE FURTHER DOCUMENTS BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. EACH OF THE ABOVE OBJECTION IS INDEPENDENT AND WITH OUT PREJUDICE TO THE OTHER GROUNDS OF OBJECTION PREFERRED BY THE RES PONDENT. IT(TP)A NO. 830/BANG/2016 & C.O. NO. 31/BANG/2017 PAGE 3 OF 4 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE GROUNDS REGARDING VALIDITY OF REOPENING WAS RAISED BEFORE CIT(A) AND IN THIS REGA RD, HE DRAWN OUR ATTENTION TO PARA NO. 3 OF THE ORDER OF CIT(A) WHERE HE HAS R EPRODUCED GROUNDS RAISED BY THE ASSESSEE BEFORE HIM AND AS PER THE SAME, THE GR OUND NOS. 1 TO 3 ARE REGARDING VALIDITY OF THE REASSESSMENT PROCEEDINGS. HE FURTHER SUBMITTED THAT THE SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(A) O N THIS ISSUE ARE ALSO REPRODUCED BY CIT(A) ON PAGES 5 TO 7 OF HIS ORDER A ND THEREAFTER, HE HAS REPRODUCED THE ASSESSEES SUBMISSIONS ON MERIT AS P ER GROUND NOS. 4 TO 8 RAISED BEFORE THE CIT(A) AND AFTER THAT AS PER A SM ALL PARA ON LAST PAGE OF HIS ORDER, HE DECIDED THE ISSUE ON MERIT AND THERE IS N O DECISION ON THIS ASPECT I.E. THE VALIDITY OF REASSESSMENT PROCEEDINGS. AT THIS JUNCTURE, IT WAS OBSERVED BY THE BENCH AS TO WHETHER THE ISSUE REGARDING VALIDIT Y OF REASSESSMENT PROCEEDINGS HAS NOT BECOME ACADEMIC IN THE PRESENT APPEAL BECAUSE THE ISSUE ON MERIT IS DECIDED BY CIT(A) IN FAVOUR OF TH E ASSESSEE BY FOLLOWING THE VARIOUS TRIBUNAL ORDERS AND HIGH COURT JUDGMENTS A S PER PARA NO. 4 OF THE ORDER OF CIT(A). IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ALTHOUGH RELIEF IS ALLOWED BY CIT(A) ON MERIT BUT THE ASSESSEE WANTS T O PURSUE THIS GROUND OF TECHNICAL OBJECTION ALSO BECAUSE THE DECISION ON ME RIT MAY GET REVERSED IF THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF CIT VS. TATA ELXSI LTD. AS REPORTED IN 349 ITR 98 IS REVERSED IN FUTURE BY HONBLE SUPREME COURT. THE LD. DR OF REVENUE HAD NOTHING TO SAY EX CEPT THIS THAT IN CASE, THE ISSUE REGARDING VALIDITY OF REASSESSMENT PROCEEDING S IS TO BE DECIDED THEN THE ENTIRE ISSUE SHOULD GO BACK TO THE FILE OF CIT(A) F OR FRESH DECISION BECAUSE THE ISSUES ON TECHNICAL ASPECT SHOULD BE DECIDED FIRST BEFORE DECISION ON MERIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OU R CONSIDERED OPINION, IF TECHNICAL OBJECTION HAS BEEN RAISED BY ASSESSEE IN THE FORM OF RAISING OBJECTION REGARDING VALIDITY OF REASSESSMENT PROCEEDINGS AND THE ASSESSEE IS PRESSING THIS GROUND THEN THIS ISSUE SHOULD BE DECIDED FIRST BEFORE ANY DECISION ON MERIT. AS PER THE IMPUGNED ORDER, THE CIT(A) HAS NOT DECID ED THIS ISSUE ON TECHNICAL ASPECT AND HE HAS DECIDED THE ISSUE ONLY ON MERIT. HENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION WITH THE DIRECTION THAT HE SHOULD DECIDE T HE ISSUE REGARDING THE VALIDITY IT(TP)A NO. 830/BANG/2016 & C.O. NO. 31/BANG/2017 PAGE 4 OF 4 OF REASSESSMENT PROCEEDINGS FIRST AND THEREAFTER, H E SHOULD DECIDE THE ISSUE ON MERIT AFRESH. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (GEORGE GEORGE K) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST OCTOBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.