CUMMINS INDIA LIMITED,,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 1(1),, PUNE

ITA 632/PUN/2022Status: DisposedITAT Pune04 December 2025AY 2018-1952 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Ld.CIT(A) had rightly allowed the assessee's ground of appeal concerning the deduction under Section 80JJAA. The Tribunal observed that the delay in filing the return was not intentional but due to technical glitches, and the delay was minimal. Crucially, the report in Form No. 10DA, which contains details for calculating the deduction, was filed on 30/11/2018, the due date, and other audit reports were also furnished within the prescribed time. Relying on the decision of the Coordinate Bench in Symboisis Pharmaceuticals P. Ltd. vs. DCIT, the Tribunal found no reason to interfere with the CIT(A)'s finding. Therefore, the Revenue's ground of appeal on this issue was dismissed. Consequently, the assessee's similar ground of appeal for the grant of deduction under Section 80JJAA was also allowed. The remaining grounds raised by both the assessee and the Revenue were general and consequential, requiring no adjudication. The appeal of the assessee was partly allowed for statistical purposes, and the appeal of the Revenue was dismissed.

What were the facts?

The assessee, Cummins India Limited, filed its income tax return for Assessment Year 2018-19, with revised total incomes of Rs. 420,19,55,310/- and later Rs. 527,10,75,950/-. The CPC processed the return under Section 143(1)(a), determining income at Rs. 724,67,72,290/- by denying deductions under Section 80JJA (Rs. 60,72,090/-) and Section 10AA (Rs. 196,96,24,249/-) due to delayed filing. The case was selected for scrutiny, and a draft assessment order was passed on 03/09/2021, proposing Transfer Pricing (TP) adjustments of Rs. 12,70,86,646/- and other additions of Rs. 68,14,79,984/-. The Dispute Resolution Panel (DRP) issued directions on 18/05/2022. The Assessing Officer (AO) passed the final assessment order on 30/06/2022, assessing total income at Rs. 756,25,79,114/-. The Revenue is in appeal against the relief granted by the CIT(A) regarding the Section 80JJAA deduction, while the assessee is in appeal against the additions made in the assessment order.

What were the issues?

1. Whether the AO erred in not following due procedures laid down in the Income Tax regulations, particularly Section 144B, by not issuing a show cause notice or providing a personal hearing, rendering the assessment void? 2. Whether the AO, pursuant to DRP directions, erred in making an upward adjustment of Rs. 12,70,86,646/- concerning the international transaction of royalty payment, and rejecting the assessee's benchmarking of this transaction? 3. Whether the AO, pursuant to DRP directions, erred in upholding the Comparable Uncontrolled Price (CUP) method as the most appropriate method for benchmarking royalty payments for technology use, disregarding the assessee's Transactional Net Margin Method (TNMM) which aggregated royalty with manufacturing activity, and also erred in not following the principle of consistency by rejecting the aggregation approach accepted in earlier years? Assessee's Contention: The assessee argued that the AO failed to follow mandatory procedures under Section 144B, making the assessment void. Regarding TP, the assessee contended that the CUP method was wrongly applied, and the aggregation approach, accepted in prior years, should have been followed. The assessee also argued that the denial of deduction under Section 80JJAA by the CPC was incorrect as the delay in filing the return was due to technical issues and all other mandatory reports were filed on time. Revenue's Contention: The Revenue supported the adjustments made by the CPC regarding the denial of deduction under Section 80JJAA.

Which sections of the Income-tax Act were involved?

Section 143(1)(a),Section 143(3),Section 144C(13),Section 250,Section 144B,Section 92CA(3),Section 14A,Section 8D,Section 35(2AB),Section 115JB,Section 253,Section 144C(1),Section 144C(5),Section 139(1),Section 80JJAA,Section 10AA,Section 80JJA,Section 80AC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE “C” BENCHES : : PUNE

Before: DR.MANISH BORAD & MS. ASTHA CHANDRA

For Appellant: Shri J.D. Mistri, Sr. Advocate &, Shri Ketan Ved, Advocate
For Respondent: Shri Prakash L. Pathade, CIT-DR

Heard together (2 matters)

ITA No.632/PUN/2022
ITA No.1256/PUN/2023

Read from the judgment's own cause title. This page is filed under one of them.

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned cross appeals at the instance of assessee

and Revenue pertaining to Assessment Year 2018-19 are ITA Nos.632/PUN/ 2022 & ITA No. 1256/PUN/ 2023 (Cummins India Limited)

directed against the order dated 04/10/2023 passed by the Learned Commissioner of Income Tax (Appeals)-13, Pune (for short, “CIT(A)”) u/s. 250 of the Income Tax Act, 1961 (for short, “Act”) w

The order continues below.

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