M/s Moonfrog Labs Private Limited , Bangalore V. Assistant Commissioner of Income Tax Circle-4(1)(2), Bangalore

MA 25/BANG/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4254 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 15-03-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order

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. No. 25/Bang/2022 (in ITA No. 3066/Bang/2018) Assessment Year : 2015-16 M/s. Moonfrog Labs Pvt. Ltd., 16/3, Level-3, Adarsh Yellavarthy Centre, Cambridge Road, Ulsoor Jogupalya, Bangalore – 560 008. PAN: AAICM9563H Vs. The Assistant Commissioner of Income Tax, Circle – 4(1)(2), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Padamchand Khincha, CA Revenue by : Shri Sankarganesh K, JCIT (DR) Date of Hearing : 22-04-2022 Date of Pronouncement : 23-05-2022 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present miscellaneous petition is preferred by assessee seeking certain rectification in order dated 14.12.2021 passed by this Tribunal. 2. The only grievance raised by the assessee in the M.P. is that the decisions passed by the Coordinate Bench of this Tribunal in case of Urban Ladder Home Décor Solutions Pvt. Ltd. vs. ACIT in ITA Nos. 615 to 620/Bang/2020 by order dated 17.08.2021 and Myntra Designs Pvt. Ltd. vs. DCIT in ITA Nos. 598 to 600/Bang/2020 by order dated 03.09.2021. Page 2 of 4 M.P. No. 25/Bang/2022 (in ITA No. 3066/Bang/2018) 3. In the present facts, the Ld CIT(A) referred to various case laws, but mainly took support of the decision rendered by Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Co Ltd reported in (2011) 16 taxmann.com 141, wherein it was held that the payment made by Indian residents to the non-resident supplier for software and access to database is "Royalty". 4. The issue for consideration is as to whether a considered view of the Tribunal can be subjected to rectification of mistake. Undoubtedly, all mistakes cannot be rectified under section 254(2). The rectifiable mistakes are the mistakes which are obvious, patent, and glaring on which no two views are possible. 5. The decision of coordinate Bench in case of Urban Ladder and Myntra Designs Pvt. Ltd. vs. DCIT (supra) relied by the Ld.AR analysed the facts in that case based on the decision of Hon'ble Supreme Court. In the present facts of the case this Tribunal directed the Ld.AO to analyse the MSA agreement with a direction to follow the principles laid down by the Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd. vs CIT reported in (2012) 432 ITR 471 6. No doubt judicial discipline is subject to the well settled exceptions of the earlier order being passed per incurim or sub silentio or in the meantime, there has been any change in law, either statutory or by virtue of judicial pronouncement. 7. In our view, this Tribunal applied its mind to the issue and reached to certain observation based on the decision by Page 3 of 4 M.P. No. 25/Bang/2022 (in ITA No. 3066/Bang/2018) Hon'ble Supreme Court, cannot construe to be a mistake apparent from record, merely because the decisions of Coordinate bench relied by the Ld.AR in another case is not followed. The difference between a mistake of judgment vis- a-vis an mistake apparent from record leading to an erroneous judgment may be thin, but is too subtle to be ignored. The question of mistake of judgment can only arise when two views are possible and one of the views is adopted as is in the present case. In the present facts of the case, this Tribunal remanded the issue to The Ld.AO to consider afresh in the light of Principles laid down by Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd. vs CIT (supra). 8. Since the issue is remanded, no prejudice is caused to the assessee, however we also direct the Ld.AO to consider the principles expressed in the decisions of Urban Ladder Home Décor Solutions Pvt. Ltd. vs. ACIT (supra) and Myntra Designs Pvt. Ltd. vs. DCIT (supra) while passing a fresh assessment order. 9. In view of the above, the Tribunal did not commit an error, which was apparent from record. In the result the miscellaneous petition filed by assessee stands partly allowed. Order pronounced in the open court on 23 rd May, 2022. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 23 rd May, 2022. /MS / Page 4 of 4 M.P. No. 25/Bang/2022 (in ITA No. 3066/Bang/2018) Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore