DCIT, CHENNAI v. M/s. Cognizant Technology Solutions India Pvt. Ltd., CHENNAI

ITA 1921/CHNY/2010 | 2002-2003
Pronouncement Date: 10-02-2012 | Result: Dismissed

Appeal Details

RSA Number 192121714 RSA 2010
Assessee PAN AAACD3312M
Bench Chennai
Appeal Number ITA 1921/CHNY/2010
Duration Of Justice 1 year(s) 2 month(s) 28 day(s)
Appellant DCIT, CHENNAI
Respondent M/s. Cognizant Technology Solutions India Pvt. Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 10-02-2012
Date Of Final Hearing 02-02-2012
Next Hearing Date 02-02-2012
Assessment Year 2002-2003
Appeal Filed On 12-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI N. S. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 1921/MDS/2010 ASSESSMENT YEAR : 2002-03 THE DEPUTY COMMISSIONER OF INCOME-TAX LARGE TAXPAYER UNIT CHENNAI-600 101. V. M/S. COGNIZANT TECHNOLOGY SOLUTIONS INDIA PVT. LTD. 30 WHITES ROAD CHENNAI-600 014. (PAN: AAACD3312M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N. PRAKASH JCIT RESPONDENT BY : SHRUI R. VIJAYARAGHAVAN ADVOCATE DATE OF HEARING : 02-02-2012 DATE OF PRONOUNCEMENT : 1 0/02/2012 O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS) LARGE TAXPAYER UNIT CHENNAI IN ITA N O. 31/09-10/LTU(A) DATED 31-08-2010 FOR THE ASSESSMENT YEAR 2002-03. 2. SHRI T. N. PRAKASH LEARNED SR. DR REPRESENTED O N BEHALF OF THE REVENUE AND SHRI R. VIJAYARAGHAVAN ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. I.T.A. NO.1921/MDS/2010 2 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF SOFTWARE EXPENDITURE. IT W AS THE SUBMISSION THAT THE ASSESSEE CLAIMED DEPRECIATION ON THE COMPUTER SOFTW ARE. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD NOTICED THAT THE DEP RECIATION ON THE COMPUTER SOFTWARE WAS LIABLE TO BE RESTRICTED TO 25% BY FOLL OWING THE DECISION OF THE TRIBUNAL DELHI BENCH IN THE CASE OF AMWAY INDIA ENT ERPRISES WHEREIN THE TRIBUNAL HAD HELD THAT THE AMENDMENT LAYING DOWN TH E RATE OF DEPRECIATION ON COMPUTER SOFTWARE AT 60% WAS PROSPECTIVE IN NATURE AND IS APPLICABLE ONLY FROM THE ASSESSMENT YEAR 2003-04. IT WAS THE SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) HAD ALLOWED THE ASSESSEES APPEAL IN REGARD TO THE RE-OPENING BY HOLDING THAT THE RE-OPENING WAS MADE ONLY ON A MERE CHANGE OF OPINION ON THE SAME SET OF FACTS AS EXISTED AT THE TIME OF THE ORIGINAL ASS ESSMENT. IT WAS THE SUBMISSION THAT THE EXPLANATION TO SECTION 148 PERMITTED THE AS SESSING OFFICER LIBERTY TO RE- OPEN UPTO A PERIOD OF 6 YEARS. IT WAS THE SUBMISSIO N THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. 4. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE HAD BEEN COM PLETED U/S 143(3) ON 17- 03-2005. THE SAME WAS SUBJECT MATTER OF REVISION U /S 263 AND THE ORDER U/S 143(3) READ WITH SECTION 263 WAS PASSED ON 05-09-20 07. IT WAS THE SUBMISSION THAT THE ASSESSMENT YEAR INVOLVED IS 2002-03. IT W AS THE SUBMISSION THAT THE NOTICE U/S 148 WAS ISSUED ON 03/03/2009. IT WAS TH E SUBMISSION THAT IN I.T.A. NO.1921/MDS/2010 3 COMPLETING THE ORIGINAL ASSESSMENT THE ASSESSING OF FICER HAD CONSIDERED THE ISSUE OF DEPRECIATION ON THE COMPUTER SOFTWARE AND HAD ALLOWED THE DEPRECIATION AS CLAIMED. IT WAS THE SUBMISSION THAT IT WAS ONLY ON THE BASIS OF A CHANGE OF OPINION THAT THE ASSESSING OFFICER HAS PROPOSED TO RE-OPEN THE ASSESSMENT. IT WAS SUBMITTED THAT THE ISSUE OF RE-OPENING WAS SQUA RELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. KELVINATOR OF INDIA LTD. REPORTED IN 320 ITR 561 WHEREIN IT HAS BEEN HELD TH AT IN THE ABSENCE OF ANY FRESH FACTS THE RE-OPENING CANNOT BE MADE BEYOND 4 YEARS ESPECIALLY WHEN ALL THE FACTS NECESSARY FOR DECIDING THE ISSUE WERE BEF ORE THE ASSESSING OFFICER WHEN THE ORIGINAL ASSESSMENT WAS DONE. IT WAS THE SUBMISSION THAT THAT ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE ISSUE OF RE-OPENING HAS BEEN DECIDED BY THE LEARNED CIT(A) B Y FOLLOWING THE DECISION OF THE HON'BLE FULL BENCH OF THE DELHI HIGH COURT IN T HE CASE OF KELVINATOR OF INDIA LTD. REPORTED IN 256 ITR 1 WHICH HAS BEEN APPROVED BY THE HON'BLE SUPREME COURT IN 320 ITR 561. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GKN DRIVESHAFTS REPORTED IN 259 ITR 19 (S.C) HAS HELD THAT AS THE ASSESSING OFFICER HAS NOT PASSED A SPEAKING ORDER IN REGARD TO THE OBJECTIONS RAISED B Y THE ASSESSEE THE ASSESSMENT IS QUASHED. THIS FINDING OF THE LEARNED CIT(A) IS NOT ACCEPTABLE INSOFAR AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN I.T.A. NO.1921/MDS/2010 4 DRIVESHAFTS THE ASSESSING OFFICER IS DUTY BOUND T O GIVE THE REASONS RECORDED FOR THE PURPOSE OF RE-OPENING TO THE ASSESSEE AS ALSO P ASS A SPEAKING ORDER DEALING WITH THE ASSESSEES OBJECTIONS IF ANY. JUST BECAU SE THE ASSESSING OFFICER HAS NOT PASSED A SPEAKING ORDER IN REGARD TO THE OBJECT IONS RAISED BY THE ASSESSEE IT WOULD NOT MEAN THAT THE RE-OPENING WOULD BE INVALID . HOWEVER IN THE PRESENT CASE AS THE FACTS ARE CLEARLY AVAILABLE AND AS IT I S NOTICED THAT ALL THE FACTS NECESSARY FOR ADJUDICATING THE ISSUE WERE AVAILABLE BEFORE THE ASSESSING OFFICER WHEN THE ORIGINAL ASSESSMENT ORDER ITSELF WAS PASSE D U/S 143(3) ON 17-03-2005 IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF KELVINATOR OF INDIA LTD. REFERRED TO SUPRA THE RE-OPENING IS LI ABLE TO BE HELD TO BE INVALID AS THE SAME IS BEYOND THE PERIOD OF 4 YEARS AND THE RE -OPENING IS ONLY ON THE BASIS OF CHANGE OF OPINION. IN THE CIRCUMSTANCES THE RE -OPENING OF THE ASSESSMENT STANDS QUASHED BY FOLLOWING THE PRINCIPLES LAID DOW N BY THE HON'BLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. REFE RRED TO SUPRA. IN THE CIRCUMSTANCES THE APPEAL OF THE REVENUE IS DISMISS ED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 10/02/2 012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 10 TH FEBRUARY 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE