THE PR. COMMISSIONER OF INCOME TAX vs. M/S. ANZ SUPPORT SERVICES INDIA PVT LTD

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ITA/318/2021HC KarnatakaKAHC01048450202130 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the appeal. The Court noted the assessee's submission regarding the tax effect being below the threshold stipulated in CBDT Circular No. 09/2024, which binds the Revenue. The Revenue requested liberty to revive the appeal if the case fell under the exceptions mentioned in the circulars. The Court granted this liberty. Consequently, the appeal was disposed of with the liberty as prayed for by the Revenue. The substantial question of law was kept open to be adjudicated in an appropriate proceeding. No specific finding was given on the merits of the substantial question of law raised by the Revenue.

What were the facts?

The Revenue, comprising the Principal Commissioner of Income Tax and the Income Tax Officer, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated August 6, 2021, passed by the Income Tax Appellate Tribunal, Bengaluru. The appeal pertains to Assessment Year 2014-2015 and challenges the Tribunal's decision in IT(TP)A No. 58/Bang/2019. The core of the dispute revolves around the period for realization of invoices for international transactions in the ITeS segment. The Revenue sought to set aside the Tribunal's order and confirm the order of the Dispute Resolution Panel (DRP) and the Deputy Commissioner of Income Tax.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal's order is perverse for considering a 60-day realization period agreed under an Advance Pricing Agreement (APA) for international transactions in the ITeS segment effective from April 1, 2017, onwards, to international transactions relating to Assessment Year 2014-2015, despite the APA specifically mentioning this period only for transactions from April 1, 2017, onwards, and that a clause applied for one assessment year cannot be applied to another. Assessee's Contention: The appeal should not be entertained as the tax effect is less than Rs. 2 Crores, citing Circular No. 09/2024 dated September 17, 2024, issued by the Central Board of Direct Taxes, which binds the Revenue. Revenue's Contention: The Revenue sought liberty to revive the appeal if the matter falls within the exceptions provided in Circular No. 09/2024 and Circular No. 5/2024 dated March 15, 2024.

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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NC: 2024:KHC:41149-DB ITA No. 318 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 318 OF 2021 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU - 560 095

2.

THE INCOME TAX OFFICER WARD - 1(1)(1) PRESENT ADDRESS DCIT, CIRCLE - 1(1)(1) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095 …APPELLANTS (BY SRI. SUSHAL TIWARI N.,ADVOCATE)

AND:

M/S. ANZ SUPPORT SERVICES INDIA PVT LTD EUCALYPTUS MANYATA EMBASSY BUSINESS PARK SEZ OUTER RING ROAD, NAGAVARA AND RACHENAHALLI VILLAGE K R PURAM HOBLI BENGALURU - 560 045 PAN. AAGCA5549M …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41149-DB ITA No. 318 of 2021

FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. 58/BANG/2019 DATED 06/08/2021 FOR ASSESSMENT YEAR 2014- 2015 ANNEXURE-D AND CONFIRM THE ORDER OF THE DRP COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU AND ETC.

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

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri. Sushal Tiwari. N., for appellants/Revenue and learned counsel Smt.Tanmayee Rajkumar, learned counsel for the respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 06.08.2021 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP) A No.58/Bang/2019 for the assessment year 2014- 15, raising the following substantial questions of law:

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NC: 2024:KHC:41149-DB ITA No. 318 of 2021

“1. Whether on the facts and in the circumstances of the case, the Tribunal order can be said as perverse in nature as Tribunal has considered the realization period of 60 days which has been agreed under Advance Pricing Agreement for the realization of invoices pertaining to international transactions in ITeS Segment effective from 1/4/2017 onwards to the international transactions relating to A.Y.2014-15 ignoring that in Advance Pricing Agreement, it has been specifically mentioned that only for international transaction from 1/4/2017 onwards, a realization period of 60 days shall be allowed to the assessee in respect of transactions in IEST Segment and for each year, a clause which has been specifically applied for an assessment year cannot be applied by and large to any other assessment year?”

3.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct

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NC: 2024:KHC:41149-DB ITA No. 318 of 2021

Taxes. It is also submitted that the aforesaid Circular binds the revenue.

4.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

5.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

BS List No.: 1 Sl No.: 45

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