Appeal details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 2763 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Transfer Pricing) Appeal
Pronouncement Date
20-09-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
14-09-2022
Assessment Year
2018-2019
Appeal Filed On
28-07-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU “B” BENCH, BENGALURU Before Shri N.V. Vasudevan, Vice President and Ms. Padmavathy S., Accountant Member IT(TP)A No. 592/Bang/2022 (Assessment Year:2018-19) M/s. Alten Calsoft Labs (India) Pvt. Ltd. 7th Floor, Tower D, IBC Knowledge Park, 4/1 Bannerghatta Main Road Bengaluru 560029 PAN – AAECC2705R vsACIT, Circle - 1(1)(1) 2nd Floor, MBTC Building Koramangala, 80 Feet Road Bemgaluru 560095 (Appellant) (Respondent) Assessee by:Shri Sandeep Huilgol, Advocate Revenue by:Shri Manjunath Karkihalli, CIT Date of hearing: 15/09/2022 Date of pronouncement: 21/09/2022 O R D E R Per: Padmavathy, A.M. This is an appeal filed by the assessee against the order of the Assisstant Commissioner of Income Tax, Circle 1(1)(1) Bangalore., under Section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the Act) dated 31.05.2022 for AY 2018-19. 2.The assessee has raised the following grounds of appeal: - “1. The order u/s 143(3) read with section 144C of the Income-tax Act, 1961 (`the Act) passed by the learned Assistant Commissioner of Income tax, Circle 1(1)(1), Bangalore (`Assessing officer' or 'AO') dated 31 st May 2022 containing transfer pricing adjustment of Rs 17,80,71,602 is prejudicial, bad in law and liable to be quashed. 2. The order is liable to be quashed for the reason that it is in violation of principles of natural justice. 3. The learned AO erred in not following the direction issued by the Dispute Resolution Panel (`DRP') dated 26 th April 2022 which stated that the AO IT(TP)A No. 592/Bang/2022 M/s. Alten Calsoft Labs (India) Pvt. Ltd. 2 would not be required to make any transfer pricing adjustment for the covered transaction except in accordance with Advance Pricing Agreement (`APA') dated 24th November 2021 entered into by the Appellant with the Central Board of Direct Taxes (`CBDT') in respect of FY 2015-16 to FY 2019-20. 4. The learned AO erred by not considering modified tax return filed by the Appellant on 28 th March 2022 under section 92CD of the Act giving effect to the terms of the APA by offering additional income of Rs. 12,57,62,590 and paying consequent tax and interest of Rs 6,51,46,660. 5. The order is liable to be quashed for the reason that it is in violation of the terms of APA, being a binding agreement pursuant to section 92CC of the Act read with Rule 10M of the Income-tax Rules, 1962. 6. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, the above grounds of appeal, at any time before or during the hearing of the appeal.” 3.The assessee is engaged in the business of designing, developing, improving, analysing and programme administering of all kinds of software. The assessee is the wholly owned subsidiary of Alten Europe. The assessee filed the return of income for AY 2018-19 on 29.11.2018 declaring total income of Rs.18,60,07,830/-. The case was selected for scrutiny and notice under Section 143(2) of the Act was duly served on the assessee. Since the assessee had international transactions reference was made to the Transfer Pricing Officer (TPO) for computation of arm’s length price (ALP). During the transfer pricing proceedings the TPO determined an adjustment of Rs.17,80,71,602/-. The AO prepared the draft assessment order passed as TP adjustment. Aggrieved, assessee filed its objections before the DRP. 4.During the pendency of proceedings before the DRP the assessee filed an application before the DRP stating that it has entered into unilateral Advance Pricing Agreement (APA) with CBDT and that the assessment year 2018-19 is also covered under the APA. Thereafter the DRP issued directions dated 25.04.2022 accordingly. 5.The AO passed final assessment order dated 31.05.2022, retaining the TP adjustment on the same amount in the draft assessment order on the ground IT(TP)A No. 592/Bang/2022 M/s. Alten Calsoft Labs (India) Pvt. Ltd. 3 that as per the information available on the system till date the assessee has not filed any modified return of income under Section 92CD of the Act and therefore he is retaining the TP adjustment as in the draft assessment order. Against the final order of the AO the assessee is in appeal before the Tribunal. 6.During the course of hearing the learned A.R. submitted that the assessee has filed the modified return and also paid the tax on the same. The learned A.R. further submitted that the final assessment order passed dated 31.05.2022 is much after the filing of the modified return and the AO is not right in retaining the TP adjustment on the ground that modified return was not filed by the assessee. The learned A.R. drew our attention to the relevant evidence of having filed the modified return during the course of hearing. 7.The learned D.R. did not have any counter argument in this regard. 8.We have heard the rival contentions and perused the material on record. We notice that the assessee has filed a modified return on 28.03.2022 (pg 143 of the paper book). We also notice that the assessee ha paid the tax due on 15.02.2022 (pg 231 of the paper book). The AO in his order dated 31.05.2022 has stated that the TP additions are retained on the ground that there is no information available on the system that the assessee has filed the modified return. On perusal of the facts and evidences as mentioned herein above with regard to the modified return having been filed along with the payment of tax, we hold that the statement of the AO is not factually correct. We therefore direct the AO to consider the modified return filed by the assessee giving effect to the Advance Pricing Agreement entered into with the CBDT which covers the TPA adjustment for AY 2018-19. The AO is directed to pass the final assessment order accordingly after giving reasonable opportunity of being heard to the assessee. IT(TP)A No. 592/Bang/2022 M/s. Alten Calsoft Labs (India) Pvt. Ltd. 4 9.In the result, the appeal filed by the assessee is allowed. Dictated and pronounced in the open Court on 21 st September, 2022. Sd/- Sd/- (N.V. Vasudevan) (Padmavathy S) Vice President Accountant Member Bengaluru, Dated: 21 st September, 2022 Copy to: 1.The Appellant 2.The Respondent 3.The DRP 4.The CIT - 5.The DR, ITAT, Bengaluru 6.Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.
