M/s Manhattan Associates (India) Developement Centre Private Limited , Bangalore V. Deputy Commissioner of Income Tax, Circle-4(1)(2), Bangalore

SA 33/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6183 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD
• Assessee Lawyers: T SURYANARAYANA
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER S.P. NO.33/BANG/2019 (IN ITA NO . 150 /BANG/201 9 ) ASSESSMENT YEAR : 20 1 2 - 1 3 M/S. MANHATTAN ASSOCIATES (INDIA) DEVELOPMENT CENTRE PVT. LTD., NO.170, 171 AND 172, PHASE II, EPIP ZONE, WHITEFIELD, BANGALORE 560 066. PAN : AADCM 0727 A VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4(1)(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. T. SURYANARAYANA, ADVOCATE REVENUE BY : DR. SHANKAR PRASAD, ADDL. CIT DATE OF HEARING : 15 . 0 2 .201 9 DATE OF PRONOUNCEMENT : 15 . 02 .201 9 O R D E R PER JASON P BOAZ, ACCOUNTANT MEMBER THIS STAY PETITION (SP) BY THE ASSESSEE IS IN RESPECT OF ITS APPEAL IN ITA NO. 150/BANG/2019 FOR ASSESSMENT YEAR 2012-13. 2. BRIEFLY STATED, FACTS OF THE MATTER ARE AS UNDER: 2.1 THE ASSESSEE, A COMPANY ENGAGED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 ON 28.11.2012 DECLARING S.P. NO.33/BANG/2019 (IN ITA NO.150/BANG/2019) PAGE 2 OF 4 INCOME OF RS.18,64,83,010/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 92CA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.21,03,49,634/-; IN VIEW OF THE DISALLOWANCE OF THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80JJAA OF THE ACT AMOUNTING TO RS.2,38,66,624/-; AND WHEREIN THE TOTAL TAX PAYABLE WAS DETERMINED AT RS.1,18,07,140/- PLUS INTEREST OF RS.40,75,820/-. ON APPEAL, THE CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE ORDER DATED 29.10.2018. THE ASSESSEE HAS NOW PREFERRED THE STAY PETITION PRAYING FOR THE GRANT OF RECOVERY OF THE OUTSTANDING DEMAND. 3.1 ACCORDING TO THE LEARNED AR OF THE ASSESSEE, OUT OF THE TAX DEMAND OF RS.1,18,07,140/- (EXCLUDING INTEREST), THE ASSESSEE HAS SO FAR PAID AN AMOUNT OF RS.3,548,167/-. IT WAS SUBMITTED BY THE LEARNED AR THAT THE ASSESSEE HAS A GOOD CASE ON MERITS IN RESPECT OF ITS CLAIM FOR DEDUCTION U/S 80JJAA OF THE ACT AND FAVOURABLE ORDERS WOULD CONSEQUENTIALLY SUBSTANTIALLY REDUCE / CANCEL THE TAX DEMAND RAISED. IT IS SUBMITTED THAT THE ASSESSEE HAS ALREADY PAID MORE THAN 30% (APPROX.) OF THE OUTSTANDING TAX DEMAND (EXCLUDING INTEREST) AND WOULD BE PUT TO GREAT FINANCIAL DIFFICULTY IF REQUIRED TO MAKE FURTHER PAYMENTS OF TAX FOR THE REASON THAT THE AO HAS ALREADY ATTACHED ITS BANK ACCOUNTS U/S 226(3) OF THE ACT VIDE ORDER DATED 01.02.2019 AND THE ASSESSEE HAS BEEN INFORMED BY ITS BANKERS, BANK OF AMERICA VIDE THEIR LETTER DATED 04.02.2019 THAT AN AMOUNT OF RS.7,34,22,275/- HAS BEEN APPROPRIATED BY THE DEPARTMENT TOWARDS OUTSTANDING DEMAND FOR ASSESSMENT YEAR 2014-15. IN THESE CIRCUMSTANCES WHERE THE ASSESSEE IS PRESENTLY FACING RESOURCE CRUNCH, IT IS REQUESTED THAT THE TRIBUNAL BE PLEASED TO GRANT THE ASSESSEE STAY ON RECOVERY OF THE BALANCE OUTSTANDING DEMAND TILL DISPOSAL OF THE APPEAL. 3. THE LEARNED DR VEHEMENTLY OPPOSED THE GRANT OF ABSOLUTE STAY TO THE ASSESSEE AND PRAYED THAT THE ASSESSEE BE DIRECTED TO MAKE FURTHER PAYMENTS OF TAX TOWARDS OUTSTANDING DEMAND. S.P. NO.33/BANG/2019 (IN ITA NO.150/BANG/2019) PAGE 3 OF 4 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE SUBMISSIONS PUT FORTH BY BOTH PARTIES AND OTHER MATERIAL ON RECORD. FROM THE RECORD BEFORE US, IT IS SEEN THAT OUT OF TOTAL TAX DEMAND, RS.1,18,07,140/- (EXCLUDING INTEREST CHARGED AMOUNTING TO RS.40,75,820/-), THE ASSESSEE HAS SO FAR PAID AN AMOUNT OF RS.35,48,167/- WHICH IS APPROXIMATELY 30% OF THE OUTSTANDING TAX DEMAND. IT IS ALSO SEEN FROM THE DETAILS FILED BEFORE US THAT THE DEPARTMENT HAS ALREADY TAKEN COERCIVE MEASURES U/S 226(3) OF THE ACT AND ON 04.02.2019 APPROPRIATED THE ENTIRE BALANCE IN THE ASSESSEES BANK ACCOUNT WITH BANK OF AMERICA AMOUNTING TO RS.7,34,22,275/- TOWARDS CLEARING THE OUTSTANDING DEMAND FOR ASSESSMENT YEAR 2014-15. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PRESENT FINANCIAL AND LIQUIDITY POSITION OF THE ASSESSEE, AS PRESENTED BEFORE US, AND THE BALANCE OF CONVENIENCE, WE ARE OF THE VIEW THAT THIS IS A FIT CASE FOR GRANT OF STAY ON COLLECTION OF THE OUTSTANDING DEMAND; SUBJECT TO THE ASSESSEE MAKING FURTHER PAYMENTS TOWARDS OUTSTANDING TAX DEMAND (EXCLUDING INTEREST). WE ACCORDINGLY GRANT THE ASSESSEE STAY ON RECOVERY OF ITS OUTSTANDING DEMAND FOR ASSESSMENT YEAR 2012-13 FOR A PERIOD OF 6 MONTHS COMMENCING TODAY OR DISPOSAL OF APPEAL, WHICHEVER IS EARLIER, SUBJECT TO THE CONDITION THAT THE ASSESSEE PAYS A FURTHER SUM OF RS.20 LAKHS AS UNDER : 1. RS.10 LAKHS ON OR BEFORE 15.03.2019. 2. RS.10 LAKHS ON OR BEFORE 30.04.2019. 5. FAILURE ON THE PART OF THE ASSESSEE TO FULFILL THE CONDITIONS AS LAID OUT ABOVE, WITHOUT REASONABLE CAUSE WILL RESULT IN AUTOMATIC WITHDRAWAL OF THE STAY GRANTED BY US BY VIRTUE OF THIS ORDER, WITH ATTENDANT CONSEQUENCES. HEARING OF THIS CASE IS FIXED ON 29.05.2019 AND THE ASSESSEE IS DIRECTED TO NOT SEEK ADJOURNMENT OF HEARING WITHOUT REASONABLE CAUSE. SINCE THE DATE OF HEARING HAS BEEN ANNOUNCED IN THE OPEN COURT, NO NOTICES NEED BE ISSUED TO THE PARTIES BY THE REGISTRY. WE HOLD AND DIRECT ACCORDINGLY. S.P. NO.33/BANG/2019 (IN ITA NO.150/BANG/2019) PAGE 4 OF 4 6. IN THE RESULT, THE ASSESSEES STAY PETITION FOR ASSESSMENT YEAR 2012-13 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF FEBRUARY, 2019. SD/- SD/- BANGALORE. DATED: 15 TH FEBRUARY, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. ( N. V. VASUDEVAN ) ( JASON P BOAZ ) VICE PRESIDENT ACCOUNTANT MEMBER