Ita/826/2007 Of M/S Aztee Software & Technology Services Ltd v. The Assistant Commissioner Of Income Tax

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 10[TH|]DAY OF JULY 2012 PRESENT THR HON BLE MR.JUSTICE D.V.SHYLENDRA KUMAR AN THR HON'BLB MR. JUSTICK B. MANOHAR ITA No.826/2007 c/w ITA No.827 /2007 ITA.NO.826/ 200 BETWEEN: M/S.AZTEE SOFTWARE & TECHNOLOGYSERVICES LIMITED,NO.23, 3 ‘A’ CROSS,18 MAIN, 6 BLOCK,KORAMANGALA,BANGALORE — 560 O68.~ APPELLAN (BY SMT.S.R.ANURADHA, ADVOCATE) AND: THE ASSISTANT COMMISSIONER OF INCOME TAXCIRCLE 11(1), 9 FLOOR,BANGALORE._ RESPONDEN (BY SRI.M.V.SESHACHALA, ADVOCATE) ITA FILED U/S.260-A OF I.T.ACT, 1961 ARISING OUTOFORDERDATED|12-0 /-2007PASSEDINITA.NO.584/Bang/2006 FOR THE ASSESSMENT YEAR2002-2003, PRAYING TO FORMULALTE THE SUBSTANTIALQUESTIONS OF LAW STATED THEREIN AND ALLOW THEAPPEAL AND SEIT ASIDE THE ORDER DATED 12-0/7-20OFITAT,SPECIALBENCH,BANGALORE,INITA.NO.584/B/2006 AND CONFIRM THE ORDER OF THECIT(A) ON THE ISSUES RAISED IN THE INTEREST OFJUSTICE AND EQUITY. ITA.NO.827 /200 BETWEEN: M/S.AZTEE SOFTWARE & TECHNOLOGYSERVICES LIMITED,NO.23, 3 ‘A’ CROSS,18 MAIN, 6 BLOCK,KORAMANGALA,BANGALORE — 560 O68.~ APPELLANT (BY SMT.S.R.ANURADHA, ADVOCATE) AND:THER ASSISTANT COMMISSIONEBR OF INCOME TCIRCLE 11(1), 9 FLOOR,BANGALORE._ RESPONDEN (BY SRI.M.V.SESHACHALA, ADVOCATE) ITA FILED U/S.260-A OF I.T.ACT, 1961 ARISING OUTOFORDERDATED|12-0 /-2007PASSEDINITA.NO.585/Bang/2006 FOR THE ASSESSMENT YEAR2002-2003, PRAYING TO FORMULALTE THE SUBSTANTIALQUESTIONS OF LAW STATED THEREIN AND ALLOW THEAPPEAL AND SEIT ASIDE THE ORDER DATED 12-0/7-20OFITAT,SPECIALBENCH,BANGALORE,INITA.NO.589/B/2006 AND CONFIRM THE ORDER OF THECIT(A) ON THE ISSUES RAISED IN THE INTEREST OFJUSTICE AND EQUITY.THESK APPEALS COMING ON FOR HERARING THIDAY,SHYLENDRAKUMAR.J...DBLIVEREBDTHERKFOLLOWIN JUDGMEBN RE:: ITA NO. 826/2007 This appeal by the assessee under Section 260-Aof the Income Tax Act, 1961 is against the order of theTribunal dated 12-07-2007 in I T A No.584/Bang/2006. ? The assessee iS a company engaged in thebusiness of development and export of software. Theassessment year is 2002-03. 3.The appeal had been admitted on 21-10-2008 butwithout reference to any questions of law and thematter had been directed to be listed for final hearing. 4The respondent is served and represented byori.M.V.Seshachala, learned Standing Counsel. 5.Appearing on behalf of the appellant-assessee,omt.S.R.Anuradha, learned counsel submits that thereare some subsequent developments which had takenplace subsequent to the filing of the appeal, thecompany in question has got merged with anothercompany and therefore, the successor company mayhave to come on record. For such reason, she seeks ashort accommodation. 6.On the other hand, Sri.Seshachala, learnedcounsel has drawn our attention to paragraph 1/70 othe order of the Tribunal reading as under: 3.The appeal had been admitted on 21-10-2008 butwithout reference to any questions of law and thematter had been directed to be listed for final hearing. 4The respondent is served and represented byori.M.V.Seshachala, learned Standing Counsel. 5.Appearing on behalf of the appellant-assessee,omt.S.R.Anuradha, learned counsel submits that thereare some subsequent developments which had takenplace subsequent to the filing of the appeal, thecompany in question has got merged with anothercompany and therefore, the successor company mayhave to come on record. For such reason, she seeks ashort accommodation. 6.On the other hand, Sri.Seshachala, learnedcounsel has drawn our attention to paragraph 1/70 othe order of the Tribunal reading as under: “In the light of above discussion, Wwe seaside the impugned order of the Commissionerof Income Tax (Appeals) and restore thematter to the file of the Assessing officer whomay again refer the question of determinationof Arm’s Length price to the Transfer PricingOfficer. In our view, Transfer Pricing OfficerShould use his power and first call upon thetaxpayer to furnish ALP and all material andinformation which he is obliged to maintainunder Rule 10D of the Income Tax Rules. Itwould be appropriate to consider and makesuitable adjustments in the Arm’s Length pricedetermined by the taxpayer and on the basisof information furnished by him or otherwiseavailable with revenue authorities. By this, wedo not mean to suggest that Transfer PricingOfficer cannot determine ALP on some methodotherthanfurnishedby|the|Taxpayer.However, as we have discussed above, anychanges in the most appropriate method ofcomputing the arms length price is to be dealtwith by way of a speaking order. T.P.O. is alsoat liberty to collect independent relevantinformationof|comparableuncontrolledtransactions. Letthe revenueauthoritiesdetermine fresh ALP in the light of aboveObservation and in accordance with theregulations. Be that as it may a fair andreasonable Arm’s Length Price should bedetermined as enjoined by the directions of theBoard to its officer. With the above hopefulobservation, we remand the matter back to thefile of the Assessing Officer.” T.We notice that in this appeal, the assessee hasraised as many as 30 substantial questions of law. Inour considered opinion, it is not really necessary toconsider any of these questions, as in the first instance,the order of the Tribunal is not at all adverse to theinterest of the appellant but is one to set aside the orderpassed by the Lower Appellate Authority and remandingthe matter. We notice that all questions are leit open,]for redetermination by the Lower Appellate Authority. 8.In a matter which is remanded for a reexamination, no question of law arises for examinationby the High Court in an appeal under Section 260-A ofthe Act, unless any part of the remand order sulfferfrom a patent illegality or is an order perverse in nature,and is leit to the Lower Appellate Authority toredetermine. QOin this view of the matter, we do not propose toexamine this appeal on merits any further but dismiss the appeal without expressing any opinion on any of theaspects and leaving it open to the assessee to urge allsuch contentions as are available to the assessee beforethe authority to which the matter is remanded. RE:: IT A No.827/2006 1Q,This appeal by the very assessee as above inrespect of the assessment year 2002-03, insofar as itrelates to partially allowing the appeal of the revenuebefore the Tribunal in ITA No.585/Bang/2006 and bothappeals having disposed of by the common order. 11)The order of ClT(Appeals) having been set asidethe matter is remanded. Even the order passed in theappeal of the revenue also being to the same effect andfor the reasons indicated above, we do not propose toexamine this appeal also on merits but dispose of the 5<<=5>�5;�:6C:"5A=C�5?�H=�#9:>=�C:;F:;;:67���������� ���!� ����9:;�5<<=5>�:;�5>;��C:;F:;;=C�E�D�A9=�H=D@�D=5;�6� �����������������C 2��������������������C 2����������� F<J 2K