M/s Tecnotree Convergence Ltd.,, Gurgaon v. Income Tax Officer, Ward 16(2), New Delhi

MA 11/BANG/2021 | 2009-2010
Pronouncement Date: 16-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 1121124 RSA 2021
Assessee PAN AAACL7345L
Bench Bangalore
Appeal Number MA 11/BANG/2021
Duration Of Justice 2 month(s) 17 day(s)
Appellant M/s Tecnotree Convergence Ltd.,, Gurgaon
Respondent Income Tax Officer, Ward 16(2), New Delhi
Appeal Type Miscellaneous Application
Pronouncement Date 16-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 16-03-2021
Assessment Year 2009-2010
Appeal Filed On 29-12-2020
Judgment Text
MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON IN THE INCOME TAX APPELLATE TRIBUNAL ABENCH: BANGALORE BEFORE SHRI B. R. BASKARAN ACCOUNTANT MEMBER AND SMT. BEENA PILLAI JUDICIAL MEMBER M.P. NOS.10 & 11/BANG/2021 (ARISING OUT OF ITA NOS.2815 & 2830/DEL/2013 ASSESSMENT YEARS: 2008-09 & 2009-10 M/S. TECNOTREE CONVERGENCE LTD. 16 TH FLOOR DLF BUILDING NO.5 TOWER A DLF CYBER CITY PHASE-III GURGAON 122 002 PAN NO :AAACL7345L VS. ITO WARD-16(2) NEW DELHI APPELLANT RESPONDENT APPELLANT BY : SHRI K.R. VASUDEVAN A.R. RESPONDENT BY : SHRI KANNAN NARAYANAN D.R. DATE OF HEARING : 29.01.2021 DATE OF PRONOUNCEMENT : 16.03.2021 O R D E R PER B.R. BASKARAN ACCOUNTANT MEMBER: BOTH THESE MISCELLANEOUS APPLICATIONS HAVE BEEN FIL ED BY THE ASSESSEE SUBMITTING THAT THERE ARE MISTAKES APPAREN T FROM RECORD IN THE ORDER DATED 03.06.2020 PASSED BY THE TRIBUNA L IN ITA NO.2830/DEL/2013 & 2831/DEL/2013 RELATING TO ASSESS MENT YEARS 2008-09 & 2009-10 RESPECTIVELY. 2. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMI TTED THAT THE ABOVE SAID TWO APPEALS WERE DISPOSED OF BY THE TRIBUNAL ALONG WITH THE APPEAL OF THE REVENUE BY A COMMON ORDER DA TED 3.6.2020. MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 2 OF 8 3. THE LD. A.R. SUBMITTED THAT THERE ARE TWO MISTAK ES IN THE ORDERS PASSED BY THE TRIBUNAL IN AY 2008-09 AND 200 9-10. THE FIRST MISTAKE RELATES TO THE DEDUCTION ALLOWED U/S 10A OF THE ACT. HE SUBMITTED THAT THE DECISION RENDERED BY THE TRIB UNAL IN AY 2008-09 HAS BEEN FOLLOWED BY THE TRIBUNAL IN AY 200 9-10 ALSO. ACCORDINGLY THE LD A.R FIRST TOOK US THROUGH THE ORDER PASSED IN ASSESSMENT YEAR 2008-09. THE LD. A.R. SUBMITTED TH AT THE ASSESSEE IN GROUND NO.1 OF ITS APPEAL HAD AGITATE D THE QUANTUM OF DEDUCTION ALLOWED U/S 10A OF THE INCOME-TAX ACT 196 1 ['THE ACT' FOR SHORT]. HE SUBMITTED THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.19.91 CRORES U/S 10A OF THE ACT ON THE TOTAL EXP ORT TURNOVER OF RS.69.20 CRORES. THE A.O. DURING THE COURSE OF AS SESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAS NOT RECEI VED THE EXPORT PROCEEDS OUT OF THE TURNOVER CITED ABOVE TO THE E XTENT OF RS.18.53 CRORES WITHIN THE TIME PRESCRIBED UNDER SEC.10A OF THE ACT. THE ASSESSEE HAD SUBMITTED BEFORE THE A.O. THAT IT HAS SUBMITTED REQUEST FOR EXTENDING THE TIME LIMIT TO THE BANK AN D HAS NOT RECEIVED FORMAL APPROVAL FROM RBI. ACCORDINGLY IT WAS SUBMITTED THAT THE EXTENSION SHOULD BE DEEMED TO HAVE BEEN GR ANTED AND HENCE ABOVE SAID AMOUNT NEED NOT BE REDUCED FROM TH E AMOUNT OF EXPORT TURNOVER WHILE COMPUTING DEDUCTION U/S 10A O F THE ACT. THE SAME WAS NOT ACCEPTED BY THE A.O. ACCORDINGLY THE AO HAD REDUCED THE EXPORT TURNOVER BY A SUM OF RS.18.53 CR ORES WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. THE LD. CI T(A) ALSO CONFIRMED THE ORDER OF THE A.O. 4. BEFORE THE TRIBUNAL THE ASSESSEE HAD PLACED RELIANCE ON THE DECISION RENDERED BY THE JURISDICTIONAL KARNATAKA H IGH COURT IN THE CASE OF WIPRO LIMITED VS. DCIT 382 ITR 179 AND ALSO DECISION RENDERED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 3 OF 8 ASSESSMENT YEARS 2010-11 & 2011-12 WHEREIN ON IDEN TICAL SET OF FACTS THE CO-ORDINATE BENCH HAS ALLOWED THE DEDUCT ION IN RESPECT OF EXPORT TURNOVER FOR WHICH LETTERS FOR EXTENSION OF TIME LIMIT WERE FURNISHED TO BANK. 5. THE LD. A.R. SUBMITTED THAT THE TRIBUNAL IN ITS ORDER PASSED FOR ASSESSMENT YEAR 2008-09 HAS TAKEN NOTE OF THE ORDER PASSED BY THE CIT(A) FOR ASSESSMENT YEAR 2009-10. IN THE SAI D ORDER CIT(A) HAD OBSERVED THAT THE ASSESSEE ITSELF HAS ADMITTED THAT IT COULD NOT REALIZE AN AMOUNT OF RS.20.23 CRORES OUT OF THE TOT AL EXPORT SALES OF RS.1880.48 CRORES. BASED ON THE ABOVE SUCH OBSERVA TION OF LD CIT(A) MADE IN AY 2009-10 THE TRIBUNAL TOOK THE VI EW IN AY 2008- 09 THAT THE ASSESSEE HIMSELF HAS ADMITTED BEFORE LD . CIT(A) THAT IT COULD NOT REALIZE THE AMOUNT. THE FACT REMAINS THAT THE ABOVE SAID OBSERVATIONS WERE MADE BY LD CIT(A) IN THE APPEAL P ERTAINING TO ASSESSMENT YEAR 2009-10. BASED ON THE ABOVE FACTS THE TRIBUNAL CAME TO THE CONCLUSION THAT THE DISALLOWANCE U/S 10 A OF THE ACT IN RESPECT OF RS.18.53 CRORES IS JUSTIFIED AND ACCORDI NGLY IT WAS HELD BY THE TRIBUNAL THAT THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT (REFERRED SUPRA) IS NOT APPLICABLE. 6. THE LD. A.R. SUBMITTED THAT THE TRIBUNAL HAS MI SUNDERSTOOD THE FACTS RELATING TO THE ABOVE SAID ISSUE. HE SUBMITT ED THAT IT WAS NOBODYS CASE THAT DEDUCTION U/S 10A HAS TO BE ALLO WED ON UNREALIZED AMOUNTS. THE CORRECT FACT IS THAT THE IM PUGNED EXPORT PROCEEDS WERE NOT REALIZED WITHIN THE PRESCRIBED TI ME LIMIT ONLY AND IT IS NOT A CASE OF TOTAL NON-REALISATION AT ALL. HE SUBMITTED THAT IF THAT BE THE CASE THE ASSESSEE WOULD NOT HAVE SUBMI TTED BEFORE THE AO THAT THERE WAS DELAY IN REALIZATION OF EXPORT SA LES FOR WHICH LETTERS FOR EXTENSION OF TIME LIMIT HAD BEEN FURNIS HED TO RBI THROUGH BANKS. IN ANY CASE THE TRIBUNAL HAS CONSIDERED TH E FACTS RELATING MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 4 OF 8 TO AY 2009-10 (WHICH ARE ALSO INCORRECT) IN ORDER TO ADJUDICATE A SIMILAR GROUND RAISED IN AY 2008-09. ACCORDINGLY THE LD A.R SUBMITTED THAT THE APPRECIATION OF FACTS NOT RELEVA NT TO AY 2008-09 AND MIS-CONSTRUCTION OF FACTS HAVE RESULTED IN A MI STAKE APPARENT FROM RECORD. 7. THE LD. A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAD RAISED GROUND NO.5 CONTENDING THAT THE LD. CIT(A) HAS ERRE D IN ALLOWING DEDUCTION U/S 10A OF THE ACT ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME. HOWEVER THE TRIBUNAL HAS DEC LINED TO ADJUDICATE THE ABOVE SAID GROUND ON THE REASONING T HAT THEY DO NOT ARISE OUT OF THE ORDER OF LD. CIT(A). 8. THE LD. A.R. SUBMITTED THAT THE HONBLE COUR TS HAVE HELD THAT THE ADDITIONAL GROUNDS CAN ALSO BE RAISED ORALLY. FURTHER THE PROVISIONS OF SECTION 254(1) OF THE ACT AUTHORIZE T HE TRIBUNAL TO PASS SUCH ORDERS AS IT THINK FIT. THE LD. A.R. ALS O PLACED RELIANCE ON RULE 11 & 29 OF THE INCOME TAX APPELLATE TRIBUNA L RULES AND SUBMITTED THAT THE DECISION OF THE TRIBUNAL HAS BEE N RENDERED ON WRONG UNDERSTANDING OF THE PRINCIPLES GOVERNING THE ISSUE AND HENCE IT IS A MISTAKE APPARENT FROM RECORD. 9. ON THE CONTRARY THE LD. D.R. PLACED RELIANCE ON THE DECISION RENDERED BY COORDINATE BENCH IN THE CASE OF GOWTHAM I ASSOCIATES VS. ITO 89 TAXMANN.COM 192 WHEREIN THE TRIBUNAL HA D FOLLOWED THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COU RT IN THE CASE OF CIT VS. MCDOWELL & CO. LTD. 310 ITR 215. HE SUB MITTED THAT THE PRAYER OF THE ASSESSEE WOULD LEAD TO REVIEW OF THE ORDER PASSED BY THE TRIBUNAL AND THE SAME IS NOT PERMITTED U/S 254( 2) OF THE ACT. THE LD. D.R. MORE PARTICULARLY RELIED UPON THE FOL LOWING OBSERVATIONS MADE BY THE TRIBUNAL IN THE ABOVE SAID CASE. MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 5 OF 8 7. SECTION 254 OF THE ACT READS AS FOLLOWS : ' (2) THE APPELLATE TRIBUNAL MAY AT ANY TIME WITHI N [SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PA SSED] WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RE CORD AMEND ANY ORDER PASSED BY IT UNDER SUB- SECTION (1) AND SHAL L MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE B Y THE ASSESSEE OR THE ASSESSING OFFICER.' THE HON'BLE KARNATAKA HIGH COURT IN CIT V. MC. DOWE LL & CO. LTD. [2009] 310 ITR 215/177 TAXMAN 317 AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT [2007] 295 ITR 466/165 TAXMAN 307 (SC) HAS HELD THAT THE POWER UNDER SECTION 254(2) OF THE ACT CANNOT BE EXE RCISED SO AS TO REVIEW ORDER PASSED BY THE TRIBUNAL. THE HON'BLE COURT HEL D THAT APPLICATION OF PRINCIPLES LAID DOWN BY THE SUPERIOR COURTS TO THE FACTS OF THE CASE ON ERRONEOUS UNDERSTANDING OF SUCH PRINCIPLES RECORDING OF AN ERRONEOUS FINDING BY THE TRIBUNAL BASED ON FACTS ON RECORD FORMATIO N OF A CONCLUSION ON ERRONEOUS APPLICATION OF PROVISIONS OF LAW TO THE FACTS OF THE CASE ETC CANNOT BE HELD TO BE A 'MISTAKE APPARENT FROM THE R ECORD' WARRANTING RECTIFICATION BY THE TRIBUNAL IN EXERCISE OF ITS PO WER UNDER SECTION 254(2). BY RECONSIDERING THE APPLICATION OF PRINCIPLES LAID DOWN BY SUPERIOR COURTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED OR BY RECONSIDERING THE APPLICATION OF THE RELEVANT PR OVISIONS OF LAW TO THE FACTS OF THE CASE IN A MISCELLANEOUS PETITION UNDE R SECTION 254(2) THE TRIBUNAL WOULD BE EXERCISING POWER OF REVIEW OF ITS EARLIER ORDER ON MERITS BUT NOT 'RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD' AND SUCH REVIEW WOULD CERTAINLY BE BEYOND THE SCOPE OF SECTION 254( 2). 8. IN VIEW OF THE AFORESAID DECISION OF THE HON'BLE K ARNATAKA HIGH COURT WHICH IS THE JURISDICTIONAL HIGH COURT AND WHICH IS BINDING ON US WE ARE OF THE VIEW THAT THROUGH THIS MISCELLANEOUS PETITIO N THE ASSESSEE IS SEEKING A REVIEW OF THE EARLIER ORDER OF THE TRIBUNAL BY RE CONSIDERING THE APPLICATION OF PRINCIPLES LAID DOWN BY SUPERIOR COU RTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED OR BY RECONSIDERING THE APPLICATION OF THE RELEVANT PROVISIONS OF LAW TO TH E FACTS OF THE CASE. SUCH A COURSE IS NOT PERMISSIBLE UNDER SECTION 254(2) OF T HE ACT AS HELD BY THE HON'BLE KARNATAKA HIGH COURT. IN THIS FACTUAL AND L EGAL MATRIX OF THE CASE WE DISMISS THIS M P FILED BY THE ASSESSEE IN THE CA SE ON HAND. 10. WE HEARD RIVAL CONTENTIONS ON BOTH THE MIST AKES POINTED OUT BY THE ASSESSEE. THE FIRST MISTAKE POINTED OUT BY THE ASSESSEE IS THAT THE TRIBUNAL HAS INCORRECTLY UNDERSTOOD THE FA CTS RELATING TO UNREALIZED EXPORT PROCEEDS WITHIN THE PRESCRIBED TI ME LIMIT AND ALSO CONSIDERED THE FACTS RELATING TO AY 2009-10 FOR DEC IDING THE ISSUE IN MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 6 OF 8 AY 2008-09. HE ALSO SUBMITTED THAT THE ABOVE SAID ISSUE IS FULLY COVERED BY THE ORDER PASSED BY THE TRIBUNAL IN THE EARLIER YEARS AND ALSO THE DECISION RENDERED BY HONBLE KARNATAKA HIG H COURT (REFERRED SUPRA) THE TRIBUNAL HAS HELD THAT THOSE DECISIONS ARE NOT APPLICABLE ONLY FOR THE REASON OF INCORRECT APPRECI ATION OF FACTS/CONSIDERATION OF FACTS OF SUCCEEDING YEAR WH ICH WERE ALSO INCORRECTLY APPRECIATED. 11. ADMITTEDLY THE TRIBUNAL HAS CONSIDERED THE FACTS RELATING TO AY 2009-10 FOR DECIDING THE ISSUE URGED IN AY 2008- 09. IT WAS ALSO SUBMITTED THAT THERE IS NO OBSERVATION IN THE ORDER S OF THE TAX AUTHORITIES ABOUT NON-REALISATION OF EXPORT PROCEED S ALTOGETHER AS OBSERVED BY THE TRIBUNAL I.E. IT IS NOBODYS CASE THAT THE ASSESSEE DID NOT REALIZE EXPORT PROCEEDS AT ALL. ACCORDING TO LD A.R LD CIT(A) OBSERVATIONS ALSO MEANT THAT THE ASSESSEE DI D NOT REALIZE THE AMOUNT MENTIONED ABOVE WITHIN THE PRESCRIBED TIME. THUS WE NOTICE THAT IT IS A CASE OF INCORRECT UNDERSTANDING OF FACTS. 12. BEFORE US LD D.R PLACED RELIANCE ON THE DEC ISION RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF GOWTHAMI ASSOC IATES (SUPRA) WHICH IN TURN PLACED ITS RELIANCE ON THE DECISION R ENDERED BY HONBLE JURISDICTIONAL KARNATAKA HIGH COURT IN THE CASE OF MCDOWELL & CO. LTD (SUPRA). WE HAVE GONE THROUGH THE ABOVE S AID DECISIONS AND WE NOTICE THAT THE CASES OF ERRONEOUS UNDERSTANDING/APPLICATION OF LAW/PRINCIPLES ON THE FACTS AVAILABLE ON RECORD WERE HELD TO BE OUTSIDE SCOPE OF SEC.254( 2) OF THE ACT IN THE INSTANT CASE IT IS A CASE OF INCORRECT UNDERST ANDING OF FACTS. ACCORDINGLY WE FIND MERIT IN THE CONTENTIONS OF LD A.R THAT INCORRECT APPRECIATION OF FACTS AND CONSIDERATION O F FACTS RELATING TO AY 2009-10 FOR DECIDING THE ISSUE IN AY 2008-09 HAS RESULTED IN A MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 7 OF 8 MISTAKE APPARENT FROM RECORD IN RESPECT OF THIS ISS UE IN AY 2008- 09. 13. IDENTICAL TYPE OF MISTAKE HAS BEEN POINTED O UT BY THE ASSESSEE IN AY 2009-10 ALSO. THE LD A.R SUBMITTED THAT THE TRIBUNAL HAS DECIDED AN IDENTICAL ISSUE IN AY 2009-10 BY FOLLOW ING ITS DECISION RENDERED IN AY 2008-09. HE SUBMITTED THAT IT IS N OT THE CASE OF ASSESSEE OR TAX AUTHORITIES THAT THE ASSESSEE DID N OT REALIZE AT ALL THE EXPORT PROCEEDS. WHAT WAS POINTED OUT BY THE A O WAS THAT THE EXPORT PROCEEDS WERE NOT REALIZED WITHIN THE TIME P RESCRIBED IN SEC.10A OF THE ACT. ACCORDINGLY FOLLOWING OUR DEC ISION RENDERED IN AY 2008-09 WE HOLD THAT THERE IS MISTAKE APPARENT FROM RECORD IN AY 2009-10 ALSO ON THIS ISSUE AS THERE IS INCORREC T APPRECIATION OF FACTS. 14. THE NEXT MISTAKE POINTED OUT BY THE ASSESSE E IS THAT THE TRIBUNAL HAS COMMITTED AN ERROR IN NOT ADMITTING GR OUND NO.5 & 6 IN AY 2008-09 AND GROUND NO. 6 & 7 BY OBSERVING THA T THESE ISSUES DO NOT ARISE OUT OF THE ORDER OF LD CIT(A). 15. THE SUBMISSIONS MADE BY LD A.R WERE CONSIDE RED. IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE TRIBUNAL IS EMPOW ERED TO RECTIFY THE MISTAKES APPARENT FROM RECORD. UNDER THE GARB OF R ECTIFICATION THE TRIBUNAL IS NOT EMPOWERED TO REVIEW ITS OWN ORDER. IT IS THE SUBMISSION OF LD A.R THAT THE TRIBUNAL DID NOT CONS IDER RULE 11 & 29 OF APPELLATE TRIBUNAL RULES. IT WAS FURTHER SUB MITTED THAT WIDE POWERS WERE GIVEN TO THE TRIBUNAL U/S 254(1) OF THE ACT. THE FACT REMAINS THAT THE TRIBUNAL HAS TAKEN A CONSCIOUS DEC ISION OF DECLINING TO ADMIT GROUNDS WHICH WERE NOT CONTESTE D BEFORE LD CIT(A). WE HAVE NOTICED EARLIER THAT THE JURISDICT IONAL HONBLE KARNATAKA HIGH COURT HAS HELD IN THE CASE OF MCDOWE LL & CO. LTD MP NOS.10 & 11/BANG/2021 M/S. TECNOTREE CONVERGENCE LTD. GURGAON PAGE 8 OF 8 (SUPRA) THAT THE CASE OF ERRONEOUS APPLICATION OF L AW/PROVISIONS WILL FALL OUTSIDE THE SCOPE OF SEC.254(2) OF THE ACT. T HE ASSESSEE HAS CONTENDED THAT THERE IS ERRONEOUS APPLICATION OF LA W/PROVISIONS OF THE ACT. HENCE THIS PLEA RAISED BY THE ASSESSEE IN BOTH THE YEARS WOULD FALL OUTSIDE THE SCOPE OF SEC.254(2) OF THE A CT. ACCORDINGLY WE REJECT THIS PLEA OF THE ASSESSEE IN BOTH THE YEA RS. 16. IN VIEW OF THE FOREGOING DISCUSSIONS WE REC ALL THE ORDERS PASSED BY TRIBUNAL IN AY 2008-09 AND 2009-10 FOR TH E LIMITED PURPOSE OF ADJUDICATING THE GROUND NO.1 IN BOTH ASS ESSMENT YEAR 2008-09 AND AY 2009-10. 17. IN THE RESULT BOTH THE MISCELLANEOUS APPLIC ATIONS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE DATED 16 TH MAR 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT BANGALORE