Teleradiology Solutions Private Limited V. Joint Commissioner of Income Tax (OSD), Circle \\u2013 12(4) and Commissioner of Income Tax-VII and Commissioner of Income Tax (Appeals) \\u2013 7

WA/1076/2016

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The case involves M/s. Teleradiology Solutions Private Limited, which filed multiple writ appeals against the orders related to income tax demands under Section 10-A of the Income Tax Act, 1961. The primary contention was the requirement to deposit 15% of the disputed demand of Rs.24.16 crore as a precondition for hearing the appeals. The learned Single Judge had directed this deposit based on Central Board of Direct Taxes instructions. The appellants challenged this specific requirement in the writ appeals, seeking a reduction in the deposit percentage. The High Court of Karnataka, considering the prolonged pendency of the appeals and the nature of the dispute, partially allowed the appeals by reducing the deposit requirement to 10%.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 671734 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-05-2016
• Assessment Year: misc
• Laws Referred To: Karnataka High Court Act, 1961, Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: A SHANKAR; G VENKATESH; M LAVA
• Keywords: Computer software; Deposit; Income Tax; Statutory requirement; Writ Appeal
• Section: 10(a)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF MAY, 2016 PRESENT THE HON’BLE MR.JUSTICE ANAND BYRAREDDY AND THE HON’BLE MR.JUSTICE RAVI MALIMATH WRIT APPEAL NO.1076 OF 2016 (T-IT) CONNECTED WITH WRIT APPEAL No.1075 OF 2016 (T-IT) WRIT APPEAL No. 1077 OF 2016 (T-IT) WRIT APPEAL No.1078 OF 2016 (T-IT) IN W.A.No. 1076/2016 BETWEEN: M/s. Teleradiology Solutions Private Limited, Represented by its Finance Manager, Vanishree T.V., Aged about 34 years, Daughter of Vishweswara Rao T.R., The Company is situated at No.7G1, Vishweshwaraiah Industrial Area, ITPL Road, Opp. Graphite India, Bangalore – 560 048. ...APPELLANT 2 (By Shri A. Shankar, Shri G. Venkatesh and Shri M. Lava, Advocates) AND: 1. Joint Commissioner of Income Tax (OSD), Circle – 12(4), No.14/3, 4th Floor, Rashtrothana Bhavan, Nrupathunga Road, Bengaluru – 560 001. Presently: Deputy Commissioner of Income Tax, Circle – 7 (1)(1), Room No.240, 2nd Floor, BMTC Building, 80 Feet Road, Bengaluru – 560 095. 2. Commissioner of Income Tax-VII, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax-7, BMTC Building, 80 Feet Road, Bangalore – 560 001. 3. Commissioner of Income Tax (Appeals) – 7, C.R.Building, Queens Road, Bangalore – 560 001. 3 Presently: Commissioner of Income Tax (Appeals) – 7, 7th Floor, BMTC Building, 80 Feet Road, Bangalore – 560 001. ...RESPONDENTS (By Shri E.I.Sanmathi, Advocate) ***** This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, Praying to set aside the order passed in the Writ Petition No.26371/2015 dated 18.4.2016. IN W.A.No. 1075/2016 BETWEEN: M/s. Teleradiology Solutions Private Limited, Represented by its Finance Manager, Vanishree T.V., Aged about 34 years, Daughter of Vishweswara Rao T.R., The Company is situated at No.7G1, Vishweshwaraiah Industrial Area, ITPL Road, Opp. Graphite India, Bangalore – 560 048. ...APPELLANT (By Shri A. Shankar , Shri G. Venkatesh and Shri M. Lava, Advocates) AND: 1. Deputy Commissioner of Income Tax, Circle – 12 (4), No.14/3, 4th Floor, 4 Rashtrothana Bhavan, Nrupathunga Road, Bengaluru – 560 001. Presently: Deputy Commissioner of Income Tax, Circle – 7 (1)(1), Room No.240, 2nd Floor, BMTC Building, 80 Feet Road, Bengaluru – 560 095. 2. Commissioner of Income Tax-VII, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax-7, BMTC Building, 80 Feet Road, Bangalore – 560 001. 3. Commissioner of Income Tax (Appeals) – 7, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax (Appeals) – 7, 7th Floor, BMTC Building, 80 Feet Road, Bangalore – 560 001. ...RESPONDENTS (By Shri E.I.Sanmathi, Advocate) 5 **** This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, Praying to set aside the order passed in the Writ Petition No.26370/2015 dated 18.4.2016. IN W.A.No. 1077/2016 BETWEEN: M/s. Teleradiology Solutions Private Limited, Represented by its Finance Manager, Vanishree T.V., Aged about 34 years, Daughter of Vishweswara Rao T.R., The Company is situated at No.7G1, Vishweshwaraiah Industrial Area, ITPL Road, Opp. Graphite India, Bangalore – 560 048. ...APPELLANT (By Shri A. Shankar , Shri G. Venkatesh and Shri M. Lava, Advocates) AND: 1. Joint Commissioner of Income Tax (OSD), Circle -12 (4), No.14/3, 4th Floor, Rashtrothana Bhavan, Nrupathunga Road, Bengaluru – 560 001. Presently: Deputy Commissioner of Income Tax, Circle – 7 (1)(1), 6 Room No.240, 2nd Floor, BMTC Building, 80 Feet Road, Bengaluru – 560 095. 2. Commissioner of Income Tax-VII, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax-7, BMTC Building, 80 Feet Road, Bangalore – 560 001. 3. Commissioner of Income Tax (Appeals) – 7, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax (Appeals) – 7, 7th Floor, BMTC Building, 80 Feet Road, Bangalore – 560 001. ...RESPONDENTS (By Shri E.I.Sanmathi, Advocate) ***** This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, Praying to set aside the order passed in the Writ Petition No.26368/2015 dated 18.4.2016. 7 IN W.A.No. 1078/2016 BETWEEN: M/s. Teleradiology Solutions Private Limited, Represented by its Finance Manager, Vanishree T.V., Aged about 34 years, Daughter of Vishweswara Rao T.R., The Company is situated at No.7G1, Vishweshwaraiah Industrial Area, ITPL Road, Opp. Graphite India, Bangalore – 560 048. ...APPELLANT (By Shri A. Shankar , Shri G. Venkatesh and Shri M. Lava, Advocates) AND: 1. Joint Commissioner of Income Tax (OSD), Circle – 12(4),No.14/3, 4th Floor, Rashtrothana Bhavan, Nrupathunga Road, Bengaluru – 560 001. Presently: Deputy Commissioner of Income Tax, Circle – 7 (1)(1), Room No.240, 2nd Floor, BMTC Building, 80 Feet Road, Bengaluru – 560 095. 2. Commissioner of Income Tax-VII, 8 C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax-7, BMTC Building, 80 Feet Road, Bangalore – 560 001. 3. Commissioner of Income Tax (Appeals) – 7, C.R.Building, Queens Road, Bangalore – 560 001. Presently: Commissioner of Income Tax (Appeals) – 7, 7th Floor, BMTC Building, 80 Feet Road, Bangalore – 560 001. ...RESPONDENTS (By Shri E.I.Sanmathi, Advocate) ***** This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, praying to set aside the order passed in the Writ Petition No.26369/2015 dated 18.4.2016. These Appeals coming on for Orders This day, ANAND BYRAREDDY J, made the following:- 9 J U D G M E N T These appeals are disposed of by this common order, having regard to the limited scope in the appeals. 2. In the writ petitions before the learned Single Judge, a challenge was laid to the Interlocutory order passed by Commissioner of Income Tax (Appeals), rejecting the application seeking stay filed by the same petitioner in all the petitions whereby an impugned demand was raised against the assessee seeking deduction of income under Section 10-A of the Income Tax Act, 1961 read with Explanation (ii), defining the term ‘Computer Software’. It is noticed by the learned Single Judge that there was no interim stay granted by this Court in the writ petitions against the proceedings and in spite of the same, the appeals pending before the Commissioner of Income Tax (Appeals) were not heard and disposed of on merits during the pendency of the writ petitions. Hence, since the appeals had been pending for more 10 than one year before the said authority, the learned Single Judge felt that it was appropriate and expedient to dispose of the petitions with a direction to the Commissioner to dispose of the appeals within a period of six months. 3. However, the learned Single Judge has opined that there is a statutory requirement, whereby the assessee – Company should be directed to pay at least 15% of the disputed demand of Rs.24.16 crore, in terms of the instructions of the Central Board of Direct Taxes and accordingly, has imposed this condition of deposit before the said authority. It is that limited aspect of requirement of the appellant to make that deposit which is sought to be questioned in these writ appeals. 4. In the body of the appeals, the appellant itself would indicate that there was scope for either waiving the requirement of demand or reducing the extent of demand substantially. 5. Given this circumstance, without going into the merits of the case, if the appellant is afforded a concession of making deposit of less than 15%, which in our opinion could be at 10% 11 of the demand instead of 15%, interest of justice would be met. Since the appeals are to be disposed of within a period of six months, it may not be that the authority would consume six months in disposing of the appeals and since a request is made for concession even to make deposit of 10% of the demand, the appellant in each of these appeals shall deposit 5% of the demand on or before 17.05.2016 and shall deposit the balance 5% of the demand on or before 17.06.2016. Subject to this condition, the appeals are allowed in part and stand disposed of. Sd/- JUDGE Sd/- JUDGE KS "