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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF NOVEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 726 OF 2023
BETWEEN:
PR. COMMISSIONER OF INCOME TAX-5 BMTC COMPLEX KORAMANGALA BANGALORE.
…APPELLANT (BY SRI. SANMATHI E I.,ADVOCATE) AND:
M/S ORIGAMI CELLULO PVT LTD NO. 126A, SRIRANGA COMPLEX ASWATHNAGAR ABOVE CANARA BANK BENGALURU 560 094
…RESPONDENT (BY SRI. A SHANKAR., SENIOR ADVOCATE FOR SRI. AKANKSH ASHOK.,ADVOCATE)
Digitally Signed by REKHA R Location : High Court of Karnataka
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 15/09/2021 PASSED IN ITA NO.394/BANG/2020, FOR THE ASSESSMENT YEAR 2015-2016. PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO (1) DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 15/09/2021 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT- ASSESSEES CASE, IN APPEAL PROCEEDINGS IN ITA NO.394/BANG/2020 FOR A.Y.2015-2016 (ANNEXURE- A).
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)
The Revenue is in appeal as against the Income Tax Appellate Tribunal's Order dated 15.09.2021 in ITA No.394/Bang/2020, and the Revenue proposes the following substantial questions of law. 1. Whether, in the facts and circumstances of the case, the Tribunal is right in law in quashing the order passed under section 263 of the Act by relying on decision of Kolkota Tribunal Bench in case of DVC Emta Coal Mines Ltd v/s ACIT (ITA No.2430-2432/KOL/2017 dated 1/5/2019) ignoring that as per Instruction No.3/2016 dated 10/3/2016, if the reason or one of the reasons for selection of a case for scrutiny is a Transfer Pricing risk parameter, the case has to be mandatorily referred to the Transfer Pricing Officer under section 92CA of the Act. 2. Whether, in the facts and circumstances of the case, the Tribunal is right in law in holding that assessing authority is
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
right in law in not referring the matter to Transfer Pricing Officer under section 92CA of the Act ignoring that omission of Section 92BA(i) of the Act w.e.f 1/4/2017 which does not allow assessing officer to overlook the crystallised instructions with regard to the reference to Transfer Pricing Officer when reason is Transfer Pricing risk and when domestic transactions are also part of parameters of TP risk.
The appeal is belated by 539 days. The Deputy Commissioner of Income Tax has filed an affidavit in support of the application. Sri E I Sanmathi, the learned counsel for the appellant- Revenue and Sri A Shankar, the learned Senior Counsel for the respondent-assessee, are heard on the question of delay and the proposed questions. The delay is condoned being satisfied with the reasons offered by the afore Deputy Commissioner of Income Tax.
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
The substantial questions of law proposed are essentially premised in whether the proceedings could be justified with the omission of provisions of Section 92BA[i] of the Income Tax Act, 1961 by the Finance Act, 2017 with effect from 01.04.2017. This question has been answered against the Revenue by the Co-ordinate Benches of this Court in the following two decisions: [a] ''Principal Commissioner of Income Tax - 7 v. Texport Overseas [P.] Ltd.,1 [b] Pr. Commissioner of Income Tax - 2 and Another v. M/s. TT Steel Service India Pvt. Ltd.,2
In fact, in the decision of M/s. TT Steel Service India Pvt. Ltd., [supra], this Court has observed as under:
"8. At this stage, we may state here that the judgment of the Co-ordinate Bench in PR. Commissioner of Income Tax-7 and another Vs.
1 [2020] 114 taxmann.com 568 [Karnataka]
2 ITA No.665/2023 disposed of on 14.10.2024.
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
M/s, Texport Overseas Private Limited was taken in appeal to the Hon’ble Supreme Court, but the tax effect being less than prescribed limit, the appeal was withdrawn. Since the issue with regard question Nos. 1 to 3 is covered by the judgment of Co-ordinate Bench of this Court, for parity of reasons, we hold, the questions are not sustainable. Insofar as, question No.4 is concerned, though the learned Senior Counsel for the respondent has also relied upon another judgment of Bombay High Court in the case of Commissioner of Income Tax-8, Mumbai Vs Phoenix Mecvano (India)(P.) Ltd. [2019] 108 taxmann.com 124 (Bombay) wherein according to him, the appeal was filed against the order of the Tribunal, wherein Tribunal has relied upon the judgment of the Bombay High Court in the case of Commissioner of Income-tax Vs Thyssen Krupp Industries India (P.) Ltd., (supra) which judgment (in the case of Commissioner of Income Tax-8, Mumbai Vs Phoenix Mecvano (India)(P.) Ltd (supra)) was taken in appeal before the Hon'ble Supreme Court the same was dismissed in SLP No.2234/2018 dated 05.02.2018.
In view of the fact that the issue relatable to question No.4 is covered by the judgment of
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HC-KAR NC: 2025:KHC:47261-DB ITA No. 726 of 2023
the High Court of Bombay in Commissioner of Income-tax Vs Thyssen Krupp Industries India (P.) Ltd., and also Commissioner of Income Tax- 8, Mumbai Vs Phoenix Mecvano (India)(P.) Ltd., which have attained finality till the Hon'ble Supreme Court, we find no merit insofar as question No.4 is concerned. Accordingly, the appeal being without merit is dismissed. The questions of law are answered in favour of Assessee and against the Revenue."
In the light of this opinion, this Court is of the considered view that the proposed substantial questions of law cannot be sustained and consequentially, the appeal is rejected.
Sd/- (B M SHYAM PRASAD) JUDGE
Sd/- (T.M.NADAF) JUDGE
AN/-