PR COMMISSIONER OF INCOME TAX vs. M/S ALTAIR ENGINEERING INC

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ITA/135/2024HC KarnatakaKAHC01020066202408 October 2025Bench: B M SHYAM PRASAD,T.M.NADAF5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that a co-ordinate bench had already decided the issue in favor of the assessee for a prior assessment year, citing the Supreme Court judgment in Engineering Analysis Centre of Excellence (P) Ltd. The court found no difference in facts or law presented by the Revenue.

What were the facts?

The Revenue appealed an ITAT order concerning the assessment year 2021-22. The core issue was whether royalty could be charged on the sale of software. The assessee presented a prior High Court order for assessment year 2019-20 in their favor.

What were the issues?

Whether the sale of software constitutes royalty for tax purposes, and if a prior High Court decision on the same issue for a different assessment year binds the current appeal.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:39639-DB ITA No. 135 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. 135 OF 2024 BETWEEN:

1.

PR COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) KORAMANGALA BANGALORE

2.

THE INCOME TAX OFFICER INTERNATIONAL TAXATION, BMTC COMPLEX, KORAMANGALA BANGALORE

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

M/S ALTAIR ENGINEERING INC 1820, EAST BIG BEAVER ROAD, TROY M1 999999 UNITED STATES, PAN AAICA 7762Q

Digitally signed by MADHUSHREE H Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:39639-DB ITA No. 135 of 2024

REP BY ITS DIRECTOR

…RESPONDENT (BY SRI. K.K.CHYTHANYA, SENIOR ADVOCATE FOR SRI. TATA KRISHNA., ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 4-12-2023 PASSED IN IT (IT)A NO.734/BANG/2023 FOR THE ASSESSMENT YEAR 2021-22 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAYBE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 4/12/2023 PASSED BY THE INCOME TAX APPELLATE TRI8BUNAL, C BENCH, BANGALORE AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A NO.734/BANG/2023 FOR A.Y.2021-22 (ANNEXURE-A).

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

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HC-KAR NC: 2025:KHC:39639-DB ITA No. 135 of 2024

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 04.12.2023 in IT(IT)A No.734/Bang/2023 by the Income Tax Appellate Tribunal "C" Bench, Bengaluru [for short, 'the Tribunal'], and the Tribunal's order is relevant to the Assessment Year 2021-22. The Revenue proposes substantial question on whether royalty could be charged in the facts and circumstances of this case, but Mr. K. K. Chythanya, the learned Senior counsel for the assessee - the respondent, places on record a copy of the order dated 12.08.2025 by a Co-ordinate Bench of this Court in Income Tax Appeal No.708/2023 to support the assessee's case that this question is no longer res integra as it is answered in its favour by the Coordinate Bench for the Assessment Year 2019-20.

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HC-KAR NC: 2025:KHC:39639-DB ITA No. 135 of 2024

Mr. E. I. Sanmathi, the learned Senior Standing Counsel for the Revenue, is heard and the records perused. It remains indisputable that a Co-ordinate Bench of this Court in the assessee's own case for the relevant Assessment Year 2019-20 in the afore appeal has upheld the assessee's case against the liability to pay royalty.

The Coordinate Bench's order in its material part reads as under:

"8. A careful perusal of the order of the Tribunal, it is clear that the Tribunal has analyzed the terms of the agreement and held that in view of the judgment of the Hon'ble Apex Court in the case of ENGINEERING ANALYSIS CENTRE OF EXCELLENCE (P) LTD., (supra) the amount in question regarding sale of software is not taxable as 'Royalty'.

9.

This Court is of the view that the issue raised in the appeal is covered by the judgment of the Hon'ble Apex Court in ENGINEERING ANALYSIS CENTRE OF EXCELLENCE (P) LTD., (supra). The revenue

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HC-KAR NC: 2025:KHC:39639-DB ITA No. 135 of 2024

has not demonstrated any difference in facts or in law. Hence, no substantial questions of law would arise for consideration. Accordingly, appeal stands dismissed."

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

Sd/- (B M SHYAM PRASAD) JUDGE

Sd/- (T.M.NADAF) JUDGE

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