THE PR. COMMISSIONER OF INCOME TAX vs. M/S TEJAS NETWORKS LTD

THE PR. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, LTU, PRESENT ADDRESS, DCIT, CENTRAL CIRCLE-2(1), C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001. …APPELLANTS

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 09.02.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.694/Bang/2016 for the assessment year 2011-12.

This Court, admitted the appeal on 05.12.2022 to consider the following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal is justified in directing Transfer Pricing Officer to adopt 0.5% as Corporate guarantee by relying on the decision rendered by co-ordinate bench in case of Medrich

"Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in directing Transfer Pricing Officer to adopt 0.5% as Corporate guarantee ignoring the findings of DRP and TPO which were well supported with materials establishing the need for variation from claim made by assessee"?

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

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the

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.