M/s Allegis Services (India) Private Limited, Bangalore v. ITO, Bangalore

ITA 4/BANG/2013 | 2010-2011
Pronouncement Date: 08-10-2013 | Result: Allowed

Appeal Details

RSA Number 421114 RSA 2013
Assessee PAN AAFCA0825M
Bench Bangalore
Appeal Number ITA 4/BANG/2013
Duration Of Justice 9 month(s) 5 day(s)
Appellant M/s Allegis Services (India) Private Limited, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 08-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 08-10-2013
Date Of Final Hearing 07-10-2013
Next Hearing Date 07-10-2013
Assessment Year 2010-2011
Appeal Filed On 02-01-2013
Judgment Text
IT(IT)A NO.4 OF 2013 ALLEGIS SERVICES INDIA PVT LTD BANGALORE PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE ABENCH BANGALORE BEFORE SHRI N. BARTHVAJASANKAR VICE PRESIDENT AND SHRI GEORGE GEORGE K. JUDICIAL MEMBER IT(IT)A NO.4/BANG/2013 (ASSESSMENT YEAR: 2010-11) M/S. ALLEGIS SERVICES (INDIA) PRIVATE LIMITED LEVEL 3 NO.12/1 & 12/2 NS PALYA BANNERGHATA ROAD BANGALORE 560 076 PAN: AAFCA 0825 M VS. INCOME TAX OFFICER (INTERNATIONAL TAXATION) WARD 1(1) BANGALORE 560029 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI N.K.SRINIVAS BHARATH DEPARTMENT BY: SHRI PARASHIVAIAH DR DATE OF HEARING: 08/10/2013 DATE OF PRONOUNCEMENT:08/10/2013 O R D E R PER GEORGE GEORGE K. J.M. THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIR ECTED AGAINST THE CIT (A)S ORDER DATED 29.05.2012. THE O RDER OF THE CIT (A) EMANATES FROM THE ORDER OF THE INCOME TAX O FFICER (I.T) PASSED U/S 201(1) & 201(1A) R.W.S. 195 OF THE INCOM E TAX ACT 1961. 2. BRIEFLY STATED THE FACTS ARE FOLLOWS: THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS O F DISTRIBUTION OF LICENSED SOFTWARE. IT PURCHASES SOF TWARE FROM OVERSEAS ENTITEES AND SELL THEM IN INDIA. THE ASSES SING OFFICER TREATED THE FOLLOWING PAYMENTS MADE TO THE FOREIGN COMPANIES FOR PURCHASE OF SOFTWARE AS PAYMENT OF ROYALTY IN T ERMS OF SECTION 9 (1)(VI) OF THE INCOME TAX ACT AND THE REL EVANT PROVISIONS OF THE DTAAS. IT(IT)A NO.4 OF 2013 ALLEGIS SERVICES INDIA PVT LTD BANGALORE PAGE 2 OF 4 S.NO NAME OF THE COMPANY AMOUNT PAID (RS.) 1 BETA CAE SYSTEMS S A 5852768 2 ESI GROUP 4228972 3 ESI GROUP 552383 4 ESI GROUP 1638903 5 LATTICE TECHNOLOGY INC 223577 6 LIVERMORE SOFTWARE TECHNOLOGY CORPORATION 288420 7 ESI GROUP 3372215 3. SINCE THE ASSESSEE COMPANY DID NOT DEDUCT THE TA X AT SOURCE ON THE ABOVE SAID PAYMENTS AS PER PROVISIONS OF SECTION 195 OF THE INCOME TAX ACT THE ASSESSING OFFICER TR EATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT IN RESPECT OF TAX DEDUCTABLE ON PAYMENTS MADE TO THE ABOVE FOREIGN CO MPANIES AS PER THE PROVISIONS OF SECTION 201(1) AND INTERES T U/S 201(1A) OF THE INCOME TAX ACT. 4. THE ASSESSEE BEING AGGRIEVED BY THE ORDER PASSED U/S 201(1) AND 201(1A) OF THE ACT PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT (A) DISPOSED OF THE APPEAL EX- PARTE BY FOLLOWING THE JUDGMENT OF THE HON'BLE JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSUNG ELECTRONI CS CO. LTD & OTHERS (ITA NO.2808 OF 2006 & OTHERS). 5. THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1. THAT THE IMPUGNED ORDER IS OPPOSED TO FACTS AND LAW AND THE APPELLANT DENIES ITS LIABILITY TO DEDUC T TAX AT SOURCE ON THE TRANSACTIONS WITH THE NON- RESIDENT SOFTWARE DEVELOPERS. 2. THAT THE LEARNED ASSESSING OFFICER MIS-DIRECTED HIMSELF IN HOLDING THAT THE PAYMENT AMOUNTS TO ROYALTY WHEN NO SUCH INTERPRETATION WAS WARRANTED IN AS MUCH AS THE TRANSACTIONS ENTERED INTO BY THE IT(IT)A NO.4 OF 2013 ALLEGIS SERVICES INDIA PVT LTD BANGALORE PAGE 3 OF 4 APPELLANT WITH THE NON-RESIDENT SOFTWARE DEVELOPERS ARE ON A PRINCIPAL TO PRINCIPAL BASIS. 3. THAT THE ACTION OF THE LEARNED ASSESSING OFFICER IS CONTRARY TO THE LAW AND VARIOUS DECISIONS WHICH ARE BINDING ON HIM. 4. THAT WITHOUT PREJUDICE TO AND IN ADDITION TO THE OTHER GROUNDS TAKEN HEREIN THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO THE NON-RESIDENTS SOFTWARE DEVELOPERS ON THE PRINCIPLES OF MUTUALITY. 5. THE APPELLANT PRAYS FOR LEAVE TO ADD MODIFY DELETE OR INTRODUCE ADDITIONAL GROUNDS OF APPEAL AT ANY TIME BEFORE THE APPEAL IS DISPOSED OFF . 5.1 THE LEARNED COUNSEL FOR THE ASSESSEE SOUGHT FOR ADJOURNMENT OF THE CASE FOR FILING PAPER BOOK. HOWE VER IT PRAYED THAT THE CASE MAY BE RESTORED TO THE CIT (A) FOR DE NOVA CONSIDERATION SINCE EFFECTIVE OPPORTUNITY OF HEARI NG WAS NOT GRANTED TO THE ASSESSEE AND THE CIT (A) ORDER WAS P ASSED EX- PARTE . THE LEARNED DR PRESENT WAS DULY HEARD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE INSTANT CASE THERE IS A DELAY IN FILING THE APPEAL BY 120 DAYS. THE ASSESSEE HAS FILED PETI TION FOR CONDONING THE DELAY ACCOMPANIED BY AN AFFIDAVIT OF FINANCE DIRECTOR OF ASSESSEE COMPANY STATING THE REASONS FO R THE DELAY IN FILING THIS APPEAL. WE HAVE PERUSED THE AFFIDAVI T FILED BY THE FINANCE DIRECTOR OF ASSESSEE COMPANY IN SUPPORT OF THE PETITION FOR CONDONING THE DELAY. THE REASONS GIVEN IN THE AFFIDAVIT ARE SUFFICIENT FOR THE CONDONATION OF DEL AY AND ACCORDINGLY WE CONDONE THE DELAY IN FILING THIS APP EAL AND PROCEED TO DISPOSE OF THE MATTER ON MERITS. 6.1 WE NOTICE THAT THE CIT (A) GRANTED ONLY ONE HEA RING OPPORTUNITY TO THE ASSESSEE (I.E. 28.05.2012) AND O N THE SAME IT(IT)A NO.4 OF 2013 ALLEGIS SERVICES INDIA PVT LTD BANGALORE PAGE 4 OF 4 DAY DISPOSED OF THE MATTER EX-PARTE AS THE ASSESSEE COULD NOT APPEAR ON THAT DATE. THE LEARNED COUNSEL FOR THE A SSESSEE IN THE WRITTEN SUBMISSION HAD CONTENDED THE JUDGMENT O F THE HON'BLE JURISDICTIONAL HIGH COURT IS DISTINGUISHABL E ON FACTS. THE CIT (A) OUGHT TO HAVE GRANTED THE ASSESSEE ONE MORE OPPORTUNITY FOR AN EFFECTIVE REPRESENTATION. IN THE INTEREST OF JUSTICE AND EQUITY WE ARE OF THE VIEW THAT ONE MOR E OPPORTUNITY NEED TO BE GRANTED TO THE ASSESSEE TO P RESENT HIS CASE BEFORE THE FIRST APPELLATE AUTHORITY. ACCORDIN GLY THIS ISSUE IS RESTORED TO THE CIT (A) FOR DE NOVA CONSIDERATIO N. THE ASSESSEE IS DIRECTED COOPERATE FOR EXPEDITIOUS DISP OSAL OF THE MATTER. THE ASSESSEE COMPANY SHALL NOT SEEK UNNECES SARY ADJOURNMENTS AND SHALL PRESENT THE NECESSARY PAPERS WITHOUT ANY DELAY. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH OCTOBER 2013. SD/- SD/- (N. BARTHVAJASANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER BANGALORE DATED 8 TH OCTOBER 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES BANGALORE