PRINCIPAL COMMISSIONER OF INCOME TAX vs. M/S BLUE YONDER INC

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ITA/120/2024HC KarnatakaKAHC01017781202408 October 2025Bench: B M SHYAM PRASAD,T.M.NADAF7 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeal, reiterating that the assessee cannot be called upon to pay royalty. The court noted that similar matters have been decided against the Revenue, even when review petitions were pending.

What were the facts?

The Revenue appealed an ITAT order that ruled the assessee was not liable to pay royalty. The assessee's case was similar to previous years where it was held that royalty was not payable, based on a Supreme Court decision.

What were the issues?

Whether the assessee is liable to pay royalty on its income. Whether the pendency of a review petition before the Supreme Court warrants reopening of concluded matters.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO.120 OF 2024

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) KORAMANGALA, BANGALORE

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, CIRCLE 1(2) KORMANGALA, BANGALORE …APPELLANTS

(BY SRI. E. I. SANMATHI, ADVOCATE) AND:

M/S BLUE YONDER INC (FORMERLY KNOWN AS JDA SOFTWARE INC.) C/O BLUE YONDER INDIA PVT LTD

Digitally signed by MADHUSHREE H Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

TOWER A, MANTRI COMMERCIO DEVARABEESANAHALLI, OUTER RING ROAD, VARTHUR HOBLI, BENGALURU-560103 REP BY ITS DIRECTOR

…RESPONDENT

(BY MS. TANMAYEE RAJKUMAR, ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED Under SECION 260-A OF THE INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 03.01.2024 PASSED IN IT(IT)A NO. 401/BANG/2023 FOR THE ASSESSMENT YEAR 2019-20PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 03.01.2024 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A No. 401/Bang/2023 For A.Y 2019-20 (Annexure A).

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)

The Revenue is aggrieved by the order dated 03.01.2024 in IT(IT)A No.401/Bang/2023 on the file of the Income Tax Appellate Tribunal "A" Bench, Bengaluru [for short, 'the Tribunal']. The Tribunal, by this impugned order dated 03.01.2024, has allowed the assessee's appeal relevant to the Assessment Year 2019-20 opining that the assessee cannot be called upon to pay royalty.

2.

Mr. E. I. Sanmathi, the learned Senior standing counsel for the appellants, and

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

Ms. Tanmayee Rajkumar, the learned counsel for the assessee, are heard for final disposal. The learned counsels do not dispute that in the assessee's own case relevant to the Assessment Years 2008-09 and 2010-11 [as also the Assessment Year 2014-15] it is finally held that the assessee cannot be called upon to pay royalty. The final order relevant to the Assessment Years 2008-09 and 2010-11 are by this Court, and the order relevant to the Assessment Year 2014-15 is by the Tribunal. This Court's order is dated 29.05.2023 in Income Tax Appeal No. 977/2017.

3.

In the circumstances of this case, this Court is of the view that this appeal must be rejected in reiteration of the finding that the assessee cannot be called upon to pay royalty. At this stage, Mr. E. I. Sanmathi submits that this Court may reserve liberty to the revenue to reopen the appeal based on the outcome in the review petition in

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

R.P.(C)No.001422-001497/2021. The learned counsel submits that the decisions in favour of the assessee is essentially because of the decision of the Apex Court in Engineering Analysis Centre of Excellence Private Limited Vs. Commissioner of Income Tax and Another reported in AIR 2021 SC 124 and a review petition is pending as against such decision.

4.

In reply, Ms. Tanmayee Rajkumar submits that the Apex Court has been disposing of the petitions filed against similar orders without reserving liberty when it is brought to its attention that a review petition is pending consideration. In this regard, the learned counsel places on record the order of the Apex Court in the case of Deputy Director of Income Tax & Anr. Vs. M/s. Vodafone Idea Ltd., in SLP (Civil) Diary No(s). 24154/2024.

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

5.

The Apex Court's order in this regard reads as under:

"During the course of submissions, we realised that this petition is covered by the judgment of this Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr. reported in (2022) 3 SCC 321, which has been followed in other cases also. When this fact was brought to the notice of the learned senior counsel appearing for the petitioners, it was pointed out that in similar matters, this Court has issued notice. The submission of learned senior counsel was also that there is a Review Petition pending before this Court and notice issued was in order. That is no reason for entertaining any subsequent matter having regard to the Explanation of Order XLVII Rule 1 of the Code of Civil Procedure, 1908. At this stage, learned senior counsel for the respondent has brought to our notice order dated 23.04.2024 passed by a three- Judge Bench of this Court in Review Petition (C) Diary No(s).35475/2023 etc. titled "The Commissioner of Income Tax vs. GE India Technology Private Limited Etc.", whereby a

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HC-KAR NC: 2025:KHC:39643-DB ITA No. 120 of 2024

three-Judge Bench of this Court had dismissed the said Review Petitions both on the ground of delay as well as on merits."

In the light of the afore, the appeal stands dismissed.

Sd/- (B M SHYAM PRASAD) JUDGE

Sd/- (T.M.NADAF) JUDGE

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