M/s. Cerner Healthcare Solutions Private Limited, Bangalore V. Deputy Commissioner Of Income Tax, Circle- 2(1)(1), Bangalore

MA 130/BANG/2022

AI Insights

The case involves M/s. Cerner Healthcare Solutions Pvt. Ltd., the appellant, contesting the disallowance of certain expenses by the Deputy Commissioner of Income Tax, the respondent. For the Assessment Year 2013-14, the revenue disallowed expenses amounting to Rs.5,62,89,100 under section 40(a)(i) of the Income Tax Act, alleging non-deduction of TDS on reimbursements made to M/s. Cerner USA. Similarly, for Assessment Year 2014-15, all expenses including those on which TDS was deducted were disallowed. The Tribunal had previously remanded the issues for verification by the Assessing Officer, and the assessee's current petitions sought to rectify this remand. The Tribunal dismissed the petitions, stating there was no mistake apparent on record warranting rectification under section 254(2).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124848 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 24-11-2022
• Other Referred Cases: ITA No. 627/Bang/2011
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 192; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT BEENA PILLAI, JUDICIAL MEMBER M.P. Nos. 130 & 131/Bang/2022 (in IT(TP)A. Nos. 217 & 218/Bang/2020) Assessment Years : 2013-14 & 2014-15 M/s. Cerner Healthcare Solutions Pvt. Ltd., Ground Floor, Wing B, Block H2, Mountain Ash, Manyata Embassy Business Park, Nagawara, Bengaluru – 560 045. PAN: AACCC3795R vs. The Deputy Commissioner of Income Tax, Circle – 2(1)(1), Bangalore. (Appellant) (Respondent) Assessee by : Shri Sumit Khurana, CA Revenue by : Shri K. Sankar Ganesh, JCIT DR ITAT Date of Hearing : 06.01.2023 Date of Pronouncement : 27.02.2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER The present Miscellaneous petitions are filed by assessee seeking rectification of the order dated 14.07.2022 passed by this Tribunal for A.Ys. under consideration. Page 2 of 4 M.P. Nos. 130 & 131/Bang/2022 (in IT(TP)A. Nos. 217 & 218/Bang/2020) 2. For A.Y. 2013-14, the issue that was raised by revenue in the appeal was regarding the income reimbursed by assessee to M/s. Cerner USA in respect of the employees executing certain work for assessee on which no TDS was alleged to have been made. The revenue made disallowance u/s. 40(a)(i) in the assessment order amounting to Rs.5,62,89,100/-. In the assessment order, the submissions of the assessee have been reproduced wherein the assessee has submitted that no services were rendered by M/s. Cerner USA to assessee during the year 2013-14 and what is remitted is mere reimbursement of certain business expenses of M/s. Cerner India which were paid by Cerner Corp. USA on behalf of Cerner India. The Ld.AO in para 5.2 observed that, the expenses were in the nature of salaries paid to employees, staff welfare expenses, communication expenses, travelling expenses and professional fee expenses to expatriate out of which TDS was deducted partly on sum of Rs.2,18,87,116/- being in the nature of salaries. The balance out of the total expenses of Rs.5,62,89,400/- was treated as reimbursement of expenses to the holding company. The assessee has nowhere filed any details regarding nature of the expenses that was reimbursed to the holding company by the assessee. In respect of A.Y. 2014-15, the entire expenses were disallowed u/s. 40(a)(i) which included the salary component on which TDS was deducted u/s. 192 of the Act. 3. The Ld.AR had relied on the decision for Assessment Year 2006-07 passed by Coordinate Bench of this Tribunal in Page 3 of 4 M.P. Nos. 130 & 131/Bang/2022 (in IT(TP)A. Nos. 217 & 218/Bang/2020) assessee’s own case in ITA No. 627/Bang/2011 by order dated 16.12.2011. 3.1 We have perused the above decisions. We note that the disallowance that was considered by Coordinate Bench have been verified by the authorities below in respect of various expenses, fees paid to consultants for tax return etc., that was a subject matter of appeal for A.Y. 2006-07. In the present facts of the case, no details have been verified by the Ld.AO/TPO and in any event, if the expenditure incurred by the assessee is in the form of reimbursement to the AE on cost- to-cost basis, there may not arise any disallowance of the same. 3.2 The Ld.AR has raised argument for A.Y. 2013-14 that the Departmental appeal is infructuous as Ld.AO never made addition on the impugned issues. 4. We note from the assessment order passed for year under consideration that Ld.AO disallowed part of the expenses on which TDS was not effectuated for A.Y. 2013-14; and for A.Y. 2014-15, reimbursement expenses that also included salary component to the seconded employees on which TDS was deducted u/s. 192 of the Act for A.Y. 2014-15 was disallowed. The authorities below has not verified any of the details in respect of the various items that was subjected to TDS by assessee suomoto for both the years under consideration, as well as the items on which no TDS was deducted. 5. It is in the interest of justice to the assessee, that the issues were remanded to the Ld.AO for necessary verifications and no prejudice is caused to assessee by such a decision taken by this Tribunal. We therefore do not find any infirmity in the view Page 4 of 4 M.P. Nos. 130 & 131/Bang/2022 (in IT(TP)A. Nos. 217 & 218/Bang/2020) taken by this Tribunal for A.Ys. 2013-14 and 2014-15, in issue raised by revenue therein. We have directed the assessee to file all necessary details in support of the claim before the Ld.AO. Now considering the argument made by the Ld.AR in present miscellaneous petition, amounts to review of earlier order for which Tribunal has no power u/s. 254(2) of the Act. Being so, there is no mistake apparent on record that warrant rectification of order u/s. 254(2). In the result, both the M.Ps. filed by the assessee stands dismissed. Order pronounced in the open court on 27 th February, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 27 th February, 2023. /MS / Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore