Deputy Commissioner of Income-tax, (IT),Circle -1, Pune V. M/s. Ansys Inc, Pune

ITA 865/PUN/2022

AI Insights

The case involves multiple appeals by the Revenue against the orders of the Commissioner of Income Tax (Appeals), Pune, which pertained to the assessment years 2011-12, 2012-13, 2013-14, and 2015-16. The primary issue was the classification of certain receipts by the respondent-assessee, M/s Ansys Inc., as royalty income or license fee. The Tribunal referenced a previous decision where it was held that consideration received for the use or right to use computer software is not classified as royalty. The Revenue challenged the CIT(A)'s decision, but the Tribunal found the appeals to be not maintainable at this stage due to the pendency of similar issues before the Hon'ble High Court.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125582 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-04-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2022
• Other Referred Cases: Engineering Analysis Centre of Excellence Pvt. Ltd. vs. CIT (2021) 432 ITR 472
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(3); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपीऱ सं. / ITA Nos.863 to 866/PUN/2022 निर्धारण वषा / Assessment Years : 2011-12, 2012-13, 2013-14 & 2015-16 The Deputy Commissioner of Income-tax (IT), Circle 1, Pune .......अऩीऱाथी / Appellant बिधम / V/s. M/s Ansys Inc. C/o Fluent India Pvt. Ltd., Plot No.34/1, Rajiv Gandhi Infotech Park, MIDC, Hinjewade, Pune – 411012 PAN: AAJCA1637K ......प्रत्यथी / Respondent Assessee by : Shri Narendra Sharma Revenue by : Shri Suhas Kulkarni, Addl. CIT स ु नवाई की तारीख / Date of Hearing : 17-04-2023 घोषणा की तारीख / Date of Pronouncement : 18-04-2023 आदेश / ORDER PER BENCH: All these four appeals filed by the Revenue are directed against different orders of the Commissioner of Income Tax (Appeals), Pune-13, dated 06.10.2022 for the assessment years 2011-12 to 2013-14 & dated 07.10.2022, for assessment year 2015-16, respectively. 2. Since the identical facts and issues are involved in all these appeals, we proceed to dispose of them vide this common order. 3. For the sake of clarity and convenience, the facts relevant for the appeal in ITA No.863/PUN/2022 for A.Y. 2011-12 are stated herein. 2 ITA Nos.863 to 866/PUN/2022 M/s. Ansys Inc 4. Briefly, the facts of the case are as under: The respondent-assessee is a company incorporated in the United States of America. The respondent-assessee develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum and defence. The company distributes and supports its products through a global network of independent channel partners as well as through its own direct sales offices. 5. The respondent-assessee had not filed return of income under the provisions of section 139(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). However, the Assessing Officer on receipt of information that the respondent-assessee had received an amount of Rs.28,78,29,303/- on which TDS has been deducted, issued notice u/s 148 of the Act on 30.01.2018. In response to the said notice, the respondent-assessee had filed return of income on 15.02.2018 declaring nil income. 6. Against the said return of income, assessment was completed by the Assessing Officer vide order dated 19.02.2020 passed u/s 143(3) r.w.s. 144C(4) of the Act wherein addition of Rs.52,63,55,657/- on account of receipt of royalty income was made. 7. Being aggrieved, an appeal was filed before the CIT(A), who vide impugned order deleted the addition following the decision of Coordinate Bench of Tribunal in assessee’s own case for assessment years 2009-10, 3 ITA Nos.863 to 866/PUN/2022 M/s. Ansys Inc 2010-11 and 2014-15 vide its order in ITA Nos.175 and 1755/PUN/2018, dated 15.06.2021 and ITA No.1646/PUN/2019 dated 09.06.2022, wherein this Tribunal applying the ratio of decision of Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. vs. CIT (2021) 432 ITR 472 held that the consideration received towards use or right to use computer software is not a royalty, decided the issue in favour of respondent-assessee. 8. Being aggrieved by the order of CIT(A), Revenue is in appeal before us in the present appeal raising the following ground of appeal: “1. Whether in the facts and circumstances of the case, Ld. CIT(A) is correct in holding that receipts to the tune of Rs.52.63 Crore of the assessee during the year are of the nature of license fee covered by the decision of Hon’ble SC in case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT (2021) 432 ITR 472 (SC), without ascertaining the facts of end users license agreements of various entities.” 9. It was stated before us that the Assessing Officer filed an application form No.8AA in terms of the provisions of section 158AB before this Tribunal read with rule 16 of Income-tax Rules, 1962 not to file an appeal since the identical issue involved is pending disposal before the Hon’ble Bombay High Court. In the light of this application, we are of the considered opinion that the issue in the present appeal cannot be adjudicated by this Tribunal and hence, the appeal is dismissed in limine as not maintainable while granting liberty to the Assessing Officer to seek restoration of appeal depending on the outcome of appeals filed by Revenue before the Hon’ble High Court in the assessment years 2009-10, 2010-11 and 2014-15. 4 ITA Nos.863 to 866/PUN/2022 M/s. Ansys Inc 10. In the result, the appeal filed by Revenue in ITA No.863/PUN/2022 is dismissed. ITA Nos.864 to 866/PUN/2022 11. As mentioned earlier, the facts and issues involved in all the appeals are identical, therefore, our decision in ITA No.863/PUN/2022 shall apply mutatis mutandis to the appeals in ITA Nos.864 to 866/PUN/2022. Accordingly, the grounds of appeal raised by the Revenue in ITA Nos.864 to 866/PUN/2022 are dismissed. 12. Resultantly, all the appeals of Revenue are dismissed. Order pronounced in the open court on 18 th April, 2023. Sd/- Sd/- S.S.VISWANETHRA RAVI INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 18 th April, 2023 GCVSR आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), Pune-13; 4. The CIT(IT&TP), Pune; 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩ ु णे “C” / DR ‘C’, ITAT, Pune; 6. गार्ड पाईऱ / Guard file. आदेशान ु सार / BY ORDER, //सत्यावऩत प्रतत// True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune