TMI Blog2021 (8) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... a workman within the meaning of Section 2(s) of the Industrial Disputes Act so long as the Software Engineer does not discharge any supervisory role. The period of 300 days as mentioned under Section 80JJAA of the Act could be taken into consideration both in the previous year and the succeeding year for the purpose or availing benefit under Section 80JJAA. It is not required that the workman works for entire 300 days in the previous year. The software engineer being workman having satisfied the period of 300 days, the assessee is entitled to claim deduction under Section 80JJAA - Decided in favour of assessee. - ITA No.1163/Bang/2012, ITA No.1175/Bang/2012, 987 & 1513/Bang/2015 - - - Dated:- 9-8-2021 - Shri N.V. Vasudevan, Vice President And Shri Chandra Poojari, Accountant Member For the Appellant : Shri K.R. Vasudevan, Advocate For the Respondent : Shri Muzaffar Hussain, CIT(DR)(ITAT), Bengaluru ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER These appeals are by the assessee and revenue against the respective orders of the CIT(Appeals) for different assessment years. The appeals for the AY 2008-09 are cross appeals by both parties and for AYs 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich comes to ₹ 3,28,000/- per year. Therefore, any person drawing a sum of ₹ 3,28,000/- and having technical qualifications would be an independent executive and cannot be treated as workman. Therefore, the claim for deduction under Section 80JJA of the Act was disallowed. However, the Tribunal by placing reliance on the decision of the Tribunal in the case of TEXAS INSTRUMENTS (INDIA) P. LTD. , supra allowed the claim of the assessee. It is pertinent to note that the decision of TEXAS INSTRUMENTS (INDIA) P. LTD. supra was challenged before this Court in ITA No.535/2007 and ITA No.537/2007 and the matter was remitted by an order dated 17.02.2014 to decide the matter afresh. However, we find that the Tribunal in paragraph 6.5.4 has rather recorded the conclusions and has failed to assign any reasons. Therefore, the matter insofar as it pertains to claim of the assessee for deduction under Section 80JAA of the Act requires reconsideration by the Tribunal. Accordingly, the second substantial question of law is answered. The impugned order dated 21.02.2014 insofar as it dismisses the appeal of the revenue to the extent of challenge of the claim of the assessee under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n AYs 2009-10 2010-11 by the Hon ble High Court in the case of Texas Instruments (India) P. Ltd. 8. The ld. DR submitted that the issue of deduction u/s. 80JJA that in the present case for the AY 2008-09 the issue was not answered by the Hon ble High Court of Karnataka in ITA No.340/2014 by judgment dated 18.1.2021 and it was remanded to the Tribunal for fresh decision. 9. We have heard both the parties and perused the material on record. In the present case before us, as submitted by the ld. DR, in pursuance of the remand by the Hon ble High Court of Karnataka in ITA No.340/2014 by judgment dated 18.01.2021, the issue of deduction u/s. 80JJA of the Act is now taken up for adjudication for AY 2008-09 before the Tribunal. Similar issue has been considered by the Hon ble High Court of Karnataka in ITA Nos.141/2020 and 151/2020 in the case of in CIT v. Texas Instruments (India) P. Ltd. [2021] 127 taxmann.com 59 (for AY 2008-09) wherein, affirming the decision of the Tribunal dated 06.03.2020 [15 taxmann.com 154 (Bang. - Trib.)], the Hon ble jurisdictional High Court held as follows:- 16.1. The Assessee had claimed deduction under Sect on 80EAA of the Act on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. 16.4. In terms of section 2(s) of the ID Act, the definition of a workman is very wide inasmuch as the said definition would cover any person who has the technical knowledge, self skilled in an industry. It cannot be disputed that the Assessee's business is an industry. It also cannot be disputed that the employees of the Assessee are technical persons skilled in software development and, as such, engaged by the Assessee to render services in the industry being run by the Assessee. Thus the software engineer would also come within the purview and ambit of workman under Section 2(s) of the ID Act so long as such a person does not take a supervisory role. The software engineer per se would be a workman; a software engineer rendering supervisory work would not be a workman. In the present case, it is not the case of the Revenue that the persons employed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act that the present facts and circumstances would have to be considered. It is also required for the Assessing Officer, CITA, Income-tax Appellate Tribunal, as also any other officer to always interpret and or apply the provisions of the Act, taking into consideration the intent and purport of the said provision. 16.9. The meaning or interpretation now sought to be given by Sri. Aravind, learned Senior Panel counsel is that only if the employee were employed for a period of 300 days in a particular financial year, only then deductions could be claimed, if not the deductions could not be claimed even though such employee has been employed for 300 continuous days or more. 16.10. We would disagree with the said contention. What is required is for a person to be employed for a period of 300 days continuously. There is no such criteria made out for a person to be employed in any particular year or otherwise. If such a restrictive interpretation is given, then any person employed post 5th June of a particular year would not entitle the Assessee to claim any deduction. Thus in order to claim the benefit under Section 80JJ-AA, an employer would have to hire the workmen befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, has to be read liberally. In this aspect, we are also supported by the decision of the Apex Court in Mavilayi Service co-operative Bank Ltd's case (supra) , wherein the Apex Court has held that a benevolent provision has to be read liberally and reasonably and if there is an ambiguity in favour of the Assessee. 16.14. The Apex Court in the case Vatika Township (P.) Ltd. (supra) has also held similarly, in that if there is a benefit conferred by legislation, the said benefit being legislative's object, there would be a presumption that such a legislation would operate with retrospective effect by giving a purposive construction. Thus the clarificatory amendment of the year 2018 can also be said to apply retrospectively for the benefit of the Assessee even though the Revenue contends that there was no provision in the year 2007 permitting the Assessee to avail the benefit of deduction when the employee works for a period of 300 days in consecutive years. 16.15. In view thereof, the substantial question No.1 is answered by holding that the software professional/engineer is a workman within the meaning of Section 2(s) of ID Act, so long as such a software ..... X X X X Extracts X X X X X X X X Extracts X X X X
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