Joint Commissioner of Income Tax, LTU, Bangalore V. M/s. Texas Instruments (India) Private Limited, Bangalore

MA 292/BANG/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7876 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 29-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, BENGALURU BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER MISC.PETN.NO.292/BANG/2017 (IN IT(TP)A NOS.1603/BANG/2014 (ASSESSMENT YEAR: 2004-05) AND MISC. PETN.NO.293/BANG/2017 (IN IT(TP)A NO.1478/BANG/2010) (ASSESSMENT YEAR : 2006-07) ADDL. COMMISSIONER OF INCOME-TAX, LTU, BENGALURU. VS. PETITIONER M/S.TEXAS INSTRUMENTS (INDIA) PVT. LTD. BAGMANE TECH PART, NO.66/3, ADJACENT TO LRDC, BYRASANDRA, C V RAMAN NAGAR POST, BENGALURU-560093. PAN: AACT 5445 M RESPONDENT PETITIONER BY : SHRI R.N.SIDDAPPAJI, ADDL.CIT(DR) RESPONDENT BY : SMT. TANMAYEE RAJKUMAR, ADVOCATE DATE OF HEARING: 05/07/2019 DATE OF PRONOUNCEMENT: 31/07/2019 O R D E R PER PAVAN KUMAR GADALE, JM: THE REVENUE HAS FILED MP NOS.292 & 293/BANG/2017 FOR REVIVAL OF THE TRIBUNAL ORDER IN IT(TP)A NO.1603/BANG/2017 AND IT(TP)A NO.1478/BANG/2017 FOR THE ASSESSMENT YEARS 2004-05 FOR ASSESSMENT YEAR 2006-07 RESPECTIVELY. MP NOS.292 & 293/BANG/2017 PAGE 2 OF 7 2. THE LEARNED DR SUBMITTED THAT THE OBSERVATIONS OF THE HONBLE TRIBUNAL ON THE ALLOWABILITY OF DEDUCTION UNDER SECTION 80JJA HAS TO BE RECTIFIED AS THE HONBLE KARNATAKA HIGH COURT IN ITA NO.535/2007 C/W ITA NO.537/2007 DATED 17/2/2014 FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03, HAS ALLOWED THE REVENUE APPEAL. WHEREAS THE TRIBUNAL IN ITA NOS.1356/BANG/2008 DATED 20/09/2010 OBSERVED AT PAGE NOS. PARAS.2.7 & 2.8 WHICH READ AS UNDER: 2.7 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE BANGALORE BENCH OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASST. YEARS 2001- 02 AND 2002-03 HAD ALLOWED THE CLAIM OF DEDUCTION U/S 80JJAA FOR THE FOLLOWING REASONS:- DEDUCTION U/S 80JJA WAS CLAIMED BY THE APPELLANT IN R/O EMPLOYEES WHO HAD JOINED AS ENGINEERS IN THEIR RESPECTIVE FIELDS SUCH AS SYSTEMS ENGINEER, TEST ENGINEER, SOFTWARE DESIGN ENGINEER, IC DESIGN ENGINEER, LEAD ENGINEER ETC. THE DEDUCTION WAS CLAIMED IN R/O ENGINEERS WHO WERE NOT IN THE CATEGORY OF SUPERVISORY CONTROL. AS PER THE NOTIFICATION ISSUED BY THE GOVERNMENT OF KARNATAKA, THE APPELLANT ENGAGED IN THE DEVELOPMENT OF SOFTWARE WAS COVERED BY THE INDUSTRIAL DISPUTES ACT, 1947 FINALLY, THE APPELLANT APPEARED TO FULFILL ALL THE CONDITIONS LAID DOWN FOR PURPOSES OF ELIGIBILITY FOR DEDUCTION U/S 80JJAA. MP NOS.292 & 293/BANG/2017 PAGE 3 OF 7 2.8 IN THE INSTANT CASE, THE ISSUE WAS REMITTED BY THE CIT(A) TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER THE ENTIRE CLAIM OF DEDUCTION U/S 80JJAA IS TO BE ALLOWED. THE. ARGUMENT OF THE LEARNED DR IS THAT THE ASSESSEE HAS MADE CLAIM FOR THOSE EMPLOYEES IN THE SUPERVISORY CATEGORY AND WHO WERE DRAWING A PAY IN EXCESS OF RS.1600/- P.M. DETAILS WITH REGARD TO THE EMPLOYEES ON WHOSE SALARY, DEDUCTION U/S 80JJAA OF THE ACT HAVE BEEN CLAIMED ARE NOT PRODUCED BEFORE US AND WE ARE NOT IN A POSITION TO VERIFY WHETHER THE PERSONS EMPLOYED IN THE SUPERVISORY ROLES ARE ALSO INCLUDED IN THE LIST. THE MATTER HAS ALREADY BEEN REMITTED BY THE CIT(A) TO THE ASSESSING OFFICER, THEREFORE, IN THE INTEREST OF JUSTICE, WE F THE VIEW THAT THIS ASPECT CAN BE EXAMINED BY THE ASSESSING OFFICER. 3. THE LEARNED DR CONTENDS THAT SINCE THE MATTER WAS REMITTED BY THE CIT(A) AND ITAT HAS ALLOWED THE REVENUE APPEAL REFERRED AT PARA. 4.3. OF THE ORDER AND DISMISSED THE ASSESSEES APPEAL. SIMILARLY, THE AO PASSED THE ORDER GIVING EFFECT OF ITAT ORDER IN 20/12/2011. THE LD.DR REFERRED TO OBSERVATIONS OF THE TRIBUNAL IN THE ORDER DATED 17/5/2017 IN ITA NO.1603/BANG/2014 AND REFERRED TO PARA.13 AND EMPHASIZED THAT THE LD. AR OF THE ASSESSEE IN THE COURSE OF HEARING SUBMITTED THAT THE ISSUE IS PENDING BEFORE THE HONBLE HIGH COURT, AND THE ISSUE IS OPEN AND DIRECTION WAS GIVEN TO THE AO TO TAKE ACTION AFTER THE DECISION OF THE HONBLE HIGH COURT. FOR BREVITY PURPOSE, WE REFER TO PARA.13 AT PAGE 20 AS UNDER: MP NOS.292 & 293/BANG/2017 PAGE 4 OF 7 13. AS REGARDS THE ISSUE OF SATISFYING THE CONDITION OF NOT LESS THAN 300 DAYS OF EMPLOYMENT DURING THE PREVIOUS YEAR, WE FIND THAT THIS ISSUE DOES NOT GERMANE FROM THE ORDER OF THIS TRIBUNAL IN THE FIRST ROUND OF APPEAL AS THE LIMITED ASPECT REMITTED TO THE ASSESSING OFFICER FOR VERIFICATION WAS WHETHER ANY PERSON EMPLOYED IN THE SUPERVISORY ROLE WAS INCLUDED IN THE LIST OF WORKMEN AS CLAIMED BY THE ASSESSEE. THEREFORE EVEN IF THE ASSESSING OFFICER HAS MADE A REFERENCE ABOUT THE EMPLOYMENT OF LESS THAN 300 DAYS, THIS ISSUE IS NOT EMANATING FROM THE PROCEEDINGS AS REMANDED BY THE TRIBUNAL. SINCE THIS ISSUE IS STILL PENDING BEFORE THE HONBLE HIGH COURT THEREFORE TO KEEP THIS ISSUE OPEN AS PER THE OUTCOME OF THE PROCEEDINGS PENDING BEFORE THE HONBLE HIGH COURT, WE DIRECT THE ASSESSING OFFICER TO TAKE NECESSARY STEP ONLY AFTER THE DECISION OF HONBLE HIGH COURT. 4. FURTHER THE LD. DR EMPHASIZED THAT ON THE DATE OF HEARING, THERE IS NO CASE PENDING BEFORE THE HONBLE HIGH COURT. THEREFORE, OBSERVATION ON THE ISSUE OF ALLOWABILITY OF SEC.80JJA OF THE ACT IS NOT CORRECT. 5. WHEREAS THE LD. AR REFERRED TO EARLIER ORDERS OF THE TRIBUNAL AND ALSO FILED ON RECORD THE STATUS OF APPEAL IN THE HONBLE HIGH COURT OF KARNATAKA WHERE IT IS NUMBERED AS ITA 2000/2017. WHEN A QUERY IS RAISED WITH REFERENCE TO THE DATE MP NOS.292 & 293/BANG/2017 PAGE 5 OF 7 OF FILING, THE EXPLANATION OF THE LD. AR ARE NOT SATISFACTORY. BUT ON PERUSAL OF STATUS AS SUBMITTED BY THE LD. AR WE FIND THAT THE APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN ITA 274/2005 DATED 29/12/2016 WAS FILED ON 29/5/2017 AND THE CASE WAS ADMITTED BY THE DIVISION BENCH ON 06/12/2017 TO CONSIDER SUBSTANTIAL QUESTION OF LAW FORMULATED IN THE APPEAL MEMO. WE FIND THAT THE ORDER OF THE TRIBUNAL CONTESTED BY THE REVENUE IS 19/5/2017 WHEREAS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL IN ITA 274/2005 DATED 29/12/2016 IS FILED 29/5/2017. SO AS ON THE DATE OF THE ORDER OF THE TRIBUNAL, THERE IS NO DISPUTED ISSUE PENDING BEFORE THE HONBLE HIGH COURT AND THE LD. AR COULD NOT SUBSTANTIATE WITH ANY EVIDENCE OR SUBMISSIONS THAT PROCEEDINGS ARE PENDING BEFORE THE HONBLE HIGH COURT. CONSIDERING THE FACTS AND CIRCUMSTANCES AND THE MATERIAL ON RECORD WITH RESPECT TO ADMISSION OF THE APPEAL, WE ARE OF THE OPINION THAT THE TRIBUNALS OBSERVATION BASED ON LD. ARS SUBMISSIONS I.E. REFERRED AT PAGE 21, THIRD LINE STARTING WITH THE WORDS SINCE THIS ISSUE AND ENDING WITH THE WORDS HIGH COURT NEEDS TO BE RECTIFIED, AS THE LD. AR COULD NOT SUBSTANTIATE WITH EVIDENCE THAT THE PROCEEDINGS ARE PENDING ON THE DATE OF HEARING BEFORE THE TRIBUNAL. ACCORDINGLY, WE DELETE THE ABOVE SENTENCE AND PARA.13 WILL NOW READ AS UNDER: MP NOS.292 & 293/BANG/2017 PAGE 6 OF 7 13. AS REGARDS THE ISSUE OF SATISFYING THE CONDITION OF NOT LESS THAN 300 DAYS OF EMPLOYMENT DURING THE PREVIOUS YEAR, WE FIND THAT THIS ISSUE DOES NOT GERMANE FROM THE ORDER OF THIS TRIBUNAL IN THE FIRST ROUND OF APPEAL AS THE LIMITED ASPECT REMITTED TO THE ASSESSING OFFICER FOR VERIFICATION WAS WHETHER ANY PERSON EMPLOYED IN THE SUPERVISORY ROLE WAS INCLUDED IN THE LIST OF WORKMEN AS CLAIMED BY THE ASSESSEE. THEREFORE EVEN IF THE ASSESSING OFFICER HAS MADE A REFERENCE ABOUT THE EMPLOYMENT OF LESS THAN 300 DAYS, THIS ISSUE IS NOT EMANATING FROM THE PROCEEDINGS AS REMANDED BY THE TRIBUNAL. 6. IN THE RESULT, THE MP NO.292BANG/2017 IS ALLOWED IN PART. FURTHER, ISSUE RAISED IN MP NO.293/BANG/2017 ARE SAME AND THE DECISION TAKEN BY US IN MP 292/BANG/2017 WILL APPLY MUTATIS MUTANDIS. ACCORDINGLY, MP NO.293/BANG/2017 IS PARTLY ALLOWED. 7. IN THE RESULT, MP NOS.292 & 293/BANG/2017 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2019. SD/- SD/- (A.K.GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BENGALURU DATED : 31/07/2019 SRINIVASULU, SPS MP NOS.292 & 293/BANG/2017 PAGE 7 OF 7 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)- 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE