THE COMMISSIONER OF INCOME TAX vs. M/S INTEL CORPORATION

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ITA/370/2017HC KarnatakaKAHC01032113201730 August 2019Bench: R DEVDAS,L.NARAYANA SWAMY4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court permitted the appellant-Revenue to withdraw the appeal. The reasoning was based on the introduction of Circular No. 17 of 2019, which revised the monetary limits for filing appeals. The Revenue submitted that the appeal might not be maintainable under these new limits. Furthermore, a communication from the Central Board of Direct Taxes dated August 20, 2019, clarified that the revised monetary limit is applicable to all pending appeals. The court also granted liberty to the appellant to seek revival of the appeal if it was found that the matter fell within the exceptions carved out in Clause 10 of Circular No. 3 of 2018. No decision was made on the merits of the original dispute.

What were the facts?

The appeal was filed by the Commissioner of Income Tax and the Deputy Commissioner of Income-Tax (appellants/Revenue) against an order of the Income-Tax Appellate Tribunal (ITAT), Bengaluru, dated November 29, 2016, concerning Assessment Year 2011-2012. The respondent is M/s. Intel Corporation. The appeal was filed under Section 260-A of the Income Tax Act, 1961. The Revenue sought to set aside the ITAT's order and confirm the orders of the Dispute Resolution Panel (DRP) and the Deputy Commissioner of Income-Tax. During the hearing, the Revenue brought to the court's notice Circular No. 17 of 2019, which amended the monetary limits for filing appeals. The Revenue submitted that the appeal might not be maintainable due to these revised limits and sought permission to withdraw.

What were the issues?

1. Whether the appeal is maintainable in light of the revised monetary limits for filing appeals as per Circular No. 17 of 2019, which increased the limit from Rs. 50,00,000/- to Rs. 1,00,00,000/-, and whether this circular applies to pending matters. Assessee's Contention: The assessee did not make any arguments as the appeal was permitted to be withdrawn by the Revenue. However, the Revenue argued that the appeal is not maintainable due to the revised monetary limits introduced by Circular No. 17 of 2019. The Revenue also referred to Circular No. 3 of 2018, Clause 10, which carves out exceptions, and stated that it was not possible at that stage to determine if the matter fell under any exception. The Revenue sought liberty to move the court for revival if an exception applied. The Revenue relied on Circular No. 17 of 2019 and Circular No. 3 of 2018, and a CBDT communication dated August 20, 2019.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2019 PRESENT THE HON’BLE MR.JUSTICE L. NARAYANA SWAMY AND THE HON’BLE MR.JUSTICE R. DEVDAS INCOME TAX APPEAL NO.370/2017 BETWEEN

1.

THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, 7TH FLOOR, BMTC BUILDING, 80 FEET ROAD,KORAMANGALA, BENGALURU-560095.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION, CIRCLE-1(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095.

... APPELLANTS

(BY SRI. K.V. ARAVIND AND SRI. DILIP.M., ADVOCATES)

AND

M/S. INTEL CORPORATION C/O INTEL TECHNOLOGY INDIA PVT.LTD., 5TH FLOOR, EMBASSY PARAGON, SITE 6/2 & 6/3, THOOBARAHALLI VILLAGE, NEAR KUNDALAHALLI GATE,

ITPL ROAD, BENGALURU. PAN:AABCI 9769G.

... RESPONDENT

(BY SRI. T. SURYANARAYANA, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:29/11/2016 PASSED IN ITA NO.135/BANG/2016, FOR THE ASSESSMENT YEAR 2011-2012 (ANNEXURE-D). PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BENGALURU IN IT(TP)A NO. 135/BANG/2016 DATED:29/11/2016 (ANNEXURE-D) AND CONFIRM THE ORDER OF THE DRP CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, CIRCLE-1(1), BENGALURU AND ETC.

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

J U D G M E N T The learned counsel for the appellant-Revenue brings to the notice of this Court a Circular bearing No.17 of 2019 dated 08th August, 2019 wherein the further enhancement of monetary limit for filing of appeals by the Departments before the Income- Tax Appellate Tribunals, High Courts and Special Leave Petitions/Appeals before the Supreme Court stands amended, and by the said amendment the earlier monetary limit of Rs.50,00,000/- (Rupees fifty lakh) has not been raised to

Rs.1,00,00,000/- (Rupees one crore). The earlier monetary limit was prescribed as per Circular No.3 of 2018 dated 11th July, 2018. In the light of the same, the learned counsel submits that the appeal is not maintainable and in view of the Circular, the appeal may be permitted to be withdrawn. Further, the learned counsel would also draw the attention of this Court to Clause 10 of the Circular No.3 of 2018 dated 11th July, 2018 wherein certain exceptions are carved out. The learned counsel submits that at the present stage it may not be possible for him to submit whether the matter falls under any of the exceptions. Therefore, it is prayed that liberty may be reserved to the appellants to move this Court, if it is found that the matter falls within the exception carved out in Clause 10 of Circular bearing Number 3 of 2018.

2.

On the query of the Court as to whether the Circular is applicable to pending matters, the learned counsel draws the attention of this Court to the communication dated 20th August, 2019 made by the Central Board of Direct Taxation to all the Chief Commissioners of Income Tax clarifying at paragraph No.3

that the monetary limit prescribed in Circular No.17 of 2019 is applicable to all pending Special Leave Petitions, Appeals, Cross Objections and References.

3.

In view of the above, we permit the appellant to withdraw the appeal for the reasons stated above. Liberty is also granted to the appellant to seek revival of this appeal, if it is found that the matter falls within the exception carved out in Clause 10 of Circular bearing No.3 of 2018.

Sd/- JUDGE

Sd/- JUDGE

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