EIT SERVICES INDIA PRIVATE vs. ASSISTANT COMMISSIONER

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ITA/118/2017HC KarnatakaKAHC01038090201724 March 2021Bench: ALOK ARADHE,M.G.S. KAMAL5 pages
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What did the High Court hold?

The High Court held that substantial questions of law (i) and (iii) were rendered academic due to efflux of time. Substantial question of law (ii) was answered in favor of the assessee, following a Supreme Court decision.

What were the facts?

The assessee appealed against an ITAT order concerning assessment year 2004-2005. The appeal raised substantial questions of law regarding the scope of appeal before the Tribunal and the setting off of losses from units eligible for Section 10A deduction.

What were the issues?

Whether the Tribunal was justified in limiting appeals to issues arising from a Section 263 order, and whether losses from Section 10A eligible units could be set off against profits of other Section 10A eligible units.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 263,Section 143(3),Section 10A

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 24TH DAY OF MARCH, 2021

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE M.G.S. KAMAL

I.T.A. NO.118 OF 2017

BETWEEN:

EIT SERVICES INDIA PRIVATE LIMITED (FORMERLY KNOWN AS HEWLETT PACKARD GLOBALSOFT PVT. LTD.) 39/40, ELECTRONIC CITY, PHASE-II, HOSUR ROAD, BANGALORE-560 100 REPRESENTED HEREIN BY ITS DIRECTOR, MR. M.S. PRAKASH ...APPELLANT

(BY MS.MAHIMA GOUD, ADVOCATE FOR SRI T.SURYANARAYANA, ADVOCATE)

AND:

1.

ASSISTANT COMMISSIONER

OF INCOME-TAX-CIRCLE

3(1)(2)(ERSTWHILE DEPUTY COMMISSIONER

OF INCOME-TAX-CIRCLE

11(4), 2ND FLOOR, BMTC BUILDING,

80 FT ROAD, KORAMANGALA 6TH BLOCK

BANGALORE-560 095.

2.

PRINCIPAL COMMISSIONER

OF INCOME TAX-3

BMTC BUILDING,

KORAMANGALA 6TH BLOCK,

BANGALORE-560 095. …RESPONDENTS

(BY SRI E.I.SANMATHI, ADVOCATE FOR SRI K.V.ARVIND, ADVOCATE)

- - - THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX APPEAL ACT 1961, ARISING OUT OF ORDER DATED:17/10/2016 PASSED IN IT(TP)A NO.1211/BANG/2012, FOR THE ASSESSMENT YEAR 2004- 2005 ANNEXURE-K PRAYING TO (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE TRIBUNAL DATED:17/10/2016 PASSED IN IT(TP)A NO.1211(BANG)2012 (ANNEXURE-K), TO THE EXTENT QUESTIONED HEREIN; AND (iii) PASS SUCH OTHER OR SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT TO PASS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND EQUITY.

THIS ITA COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

Ms.Mahima Goud, learned counsel for Shri T.Suryanarayana, learned counsel for the assessee.

Shri E.I.Sanmathi, learned counsel for Shri K.V.Aravind, learned counsel for the revenue.

This appeal under Section 260-A of the Income Tax Act, 1961 has been filed by the assessee against the order dated 17.10.2016 passed by the Income Tax Appellate Tribunal.

2.

The appeal was admitted by a Bench of this Court by order dated 14.11.2017 on the following substantial questions of law:

"Whether on the facts, in the circumstances and on the grounds and contentions urged:

(i) the Tribunal was justified in holding that only issues arising out of order passed by the CIT under Section 263 of the Act can be appealed against before the Tribunal in the proceedings arising out of the order passed by the Assessing Officer under Section 143(3) of the Act pursuant to such order under Section 263 of the Act, although the CIT(A) himself had dismissed the appeal against the original assessment order as being infructuous for the reason that the CIT had set aside the assessment order to make a fresh assessment?

(ii) the Tribunal was justified in not adjudicating on the correctness or otherwise of

setting off of loss of a Unit eligible for deduction under Section 10A of the Act against the profits of other Units entitled for a similar deduction under Section 10A of the Act?

(iii) The Tribunal ought to have remanded the entire matter to the CIT(A) for de novo consideration of all the issues arising both from the original assessment order as well as from the order giving effect to the order passed under Section 263 of the Act?"

3.

When the matter was taken up today, learned counsel for the assessee submitted that the substantial questions of law namely substantial question Nos.(i) and (iii) have been rendered academic on account of efflux of time. It is further submitted that the second substantial question of law namely substantial question No.(ii) has been answered in favour of the assessee by a decision of the Hon'ble Supreme Court in the case of Commissioner of Income-tax vs. Yokogawa India Ltd. reported in (2017) 77 taxmann.com 41 (SC).

4.

The aforesaid aspect of the matter has not been disputed by the learned counsel for the revenue.

5.

In view of the aforesaid submission, it is not necessary for us to answer the substantial questions of law namely substantial question Nos.(i) and (iii) and the second substantial question of law namely substantial question No.(ii) is answered in favour of the assessee and against the revenue.

6.

In the result, the impugned order dated 17.10.2016 insofar as it contains the finding with regard to substantial question No.(ii) is hereby quashed. The appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE

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