Wp/26370/2015 Of M/S Teleradiology Solutions Pvt Ltd v. Dy. Commr. Of Income Tax - Circle 12(4)

IN THR HIGH COURT OF KARNATAKA AT BRBNGALURU Dated this the 18[th]day of April, 2016 — Betore THE HON’BLE DR JUSTICE VINEET KOTHARIWrit Petitions 26370 c/w 26371 c/w 26369 c/w26368 / 2015 (T) Between M/s Teleradiology Solutions Pvt Ltd. 7Gl1lm Vishveshwaraiah Industrial AreITPL Road, Opp: Graphite India Bangalore 48 - by its Managing Director Common Dr Arjun Kalyanpur_Petitioner (By Sri M V Seshachala, Sr. Counsel For Sri Aravind V Chavan, Adv.) And In WP 26370/2015. 1Dy. Commr. Of Income Tax — Circle 12(4) 14/3, 4[ )]Floor, Rashtrothana Bhavan Nrupathunga Road, Bengaluru 2)Commissioner of Income Tax VII|C R Building, Queens RoadC R Building, Queens Road Bengaluru 3Commr. Of Income Tax (Appeals) - 7. C R Building, Queens Road Bengaluru Respondents 2 In WP 26371/2015 & 26369/2015| 1 Joint Commr. Of Income Tax (OSD)Circle 12(4), # 14/3, 4[ )]Floor|Rashtrothana Bhavan.Nrupathunga Road, BengaluruCircle 12(4), # 14/3, 4[ )]Floor|Rashtrothana Bhavan.Nrupathunga Road, Bengaluru ?)Commissioner of Income Tax VII|C R Building, Queens RoadC R Building, Queens Road Bengaluru 3Commr. Of Income Tax (Appeals) - 7.C R Building, Queens RoadBengaluruC R Building, Queens RoadBengaluru 4Asst. Commr. Of Income Tax, Circle 12(4)_# 14/3,4[ )]Floor, Rashtrothana BhavanNrupathunga Road, BengaluruRespondents|# 14/3,4[ )]Floor, Rashtrothana BhavanNrupathunga Road, BengaluruRespondents| In WP 26368/15 1Joint Commr. Of Income Tax (OSD)Circle 12(4), # 14/3, 4[ )]Floor|Rashtrothana Bhavan|Nrupathunga Road, BengaluruCircle 12(4), # 14/3, 4[ )]Floor|Rashtrothana Bhavan|Nrupathunga Road, Bengaluru oDCommissioner of Income Tax VII|C R Building, Queens RoadBengaluruC R Building, Queens RoadBengaluru 3Commr. Of Income Tax (Appeals) - 7.C R Building, Queens RoadBengaluruRespondentsC R Building, Queens RoadBengaluruRespondents (By Sri Jeevan J Neeralgi, CGSC) Petitions are filed under Art.226 / 227 of the|Constitution of India praying to quash the order dated)10.6.2015 — annexure E passed by 3[ra]respondent in all.these cases, etc. 3 The Petitions coming on for Preliminary hearing thisday, Court made the following: ORDER In these four cases the challenge is laid to the|interlocutory order passed by the Commissioner of Income|Tax (Appeals) rejecting the stay application filed by the)assessee. The impugned demand raised against the|assessee was rejected by the Assessing Authority denying it|the deduction of income under S.10A of the Income Tax|Act, 1961 read with Explanation (11) defining the term)‘computer soitware’. 2)The assessee carries on the business of rendering|medical transcription of the diagnostic images taken oOfvarious patients with the help of advanced equipments and|machineries of the various patients. Such medical)transcriptions are exported outside the country and the)assessee claims deduction in respect of the said income for|these assessment years, which was denied by _ thAssessing Authority and aggrieved with which, the)assessee filed regular appeals before the Commissioner ot 4 Income Tax (Appeals) for these four assessment years. By)the impugned order passed on 10.06.2015, the learnedCommissioner of Income Tax (Appeals) rejected the stay)applications and aggrieved by the same, assessee has)approached this Court by filing the present writ petitions. 2)The assessee carries on the business of rendering|medical transcription of the diagnostic images taken oOfvarious patients with the help of advanced equipments and|machineries of the various patients. Such medical)transcriptions are exported outside the country and the)assessee claims deduction in respect of the said income for|these assessment years, which was denied by _ thAssessing Authority and aggrieved with which, the)assessee filed regular appeals before the Commissioner ot 4 Income Tax (Appeals) for these four assessment years. By)the impugned order passed on 10.06.2015, the learnedCommissioner of Income Tax (Appeals) rejected the stay)applications and aggrieved by the same, assessee has)approached this Court by filing the present writ petitions. 3During the course of arguments, learned Senior|counsel Mr M V Seshachala brought to the notice of the)Court that in view oft the recent Office Memorandum otCentral Board of Direct Taxes (CBDT) dated 29.2.2016, in)partial modification of Instruction 1914 dated 21.3.2016)which provides for guidelines of the stay of demand at the)first appellate stage, CBDT has directed that in cases)where the outstanding demand is disputed betore the|Commissioner of Income Tax (Appeals), the Assessing)Officer shall grant stay of demand till disposal of the first)appeal on payment of 19% of the disputed demand, unlessthe case was in the exception category of para B of such|Circular. 5 q Learned counsel for the petitioners/assessee urged|that since the impugned order was passed by the!Commissioner of Income Tax (Appeals) way back on)10.6.2015 and despite lapse of more than one year, sincethe learned Commissioner otf Income Tax has not decided|the appeals finally, he may be directed to decide such|pending appeals before him expeditiously and the writ|petitions may be disposed of with appropriate directions. 5On the other hand, learned counsel for the Revenue|submitted that even while the Commissioner of Income Tax|(Appeals) is directed to decide the pending appeals, the|assesssee should be directed to comply with the conditions|of the recent [Instructions of CBDT dated 29.2.2016. The!assessee company should be directed to pay at least 19%|of the disputed demand of Rs.24.16 crores in terms of the)recent Instructions of the CBDT.. 6| have heard learned counsel on both sides and/perused the record. 6 TThe prayer made by learned counsel for petitioners|appears to be justified and deserves acceptance. Though|there was no interim stay granted by this Court against theproceedings and hearing of appeals pending before the)Commissioner of Income Tax (Appeals) and he could have|decided the pending appeals before him on merits by now,but in view of the admitted position that these appeals|having not been decided for the last more than one year or|so, it appears appropriate and expedient to dispose of these|writ petitions with a direction to the Commissioner otIncome Tax (Appeals) to decide the pending appeals)expeditiously preferably within a period of six months from|today. ©The assessee or its authorised representative may|appear in the first instance before the Commissioner of)Income Tax (Appeals) on17[th]May, 2016. The petitionershall deposit 15% of the total disputed demand under the|impugned assessment orders within a period of one monthfrom today and the Commissioner of Income Tax (Appeals) may thereafter, decide the appeals in accordance with law) 7 on merits within the aforesaid stipulated period. The) assesee will be free to raise all contentions on merits beforethe Commissioner of Income Tax (Appeals). QWith the above observations, these writ petitions are| disposed of. No costs. Copy of the order be sent to the|parties forthwith. an. Sd/-| Judge