PR COMMISSIONER OF INCOME TAX - 2 vs. M/S PARAMETRICS TECHNOLOGY PVT LTD

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ITA/277/2021HC KarnatakaKAHC01024712202124 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal with liberty to the revenue to revive it if exceptions under CBDT circulars apply. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order concerning transfer pricing adjustments for assessment year 2011-12. The assessee argued the appeal should not be entertained due to low tax effect, citing CBDT circulars.

What were the issues?

Whether the Tribunal was right in its transfer pricing adjustment decision, considering previous years and the TPO's findings. The appeal was also considered in light of CBDT circulars regarding tax effect.

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:39727-DB ITA No. 277 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH 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. 277 OF 2021 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX – 2, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -5(1) (2), BMTC COMPLEX, KORAMANGALA, BENGALURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE)

AND: 1. M/S PARAMETRICS TECHNOLOGY PVT LTD., 4TH FLOOR, PHOENIX TOWERS, NO.16 AND 16/1, MUSUEM ROAD, BANGALORE - 560025, PAN AABCP2629J. …RESPONDENT

(BY SMT TANMAYEE RAJKUMAR, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 13/05/2020 PASSED IN ITA NO.359/BANG/2016, FOR THE ASSESSMENT YEAR 2011-2012, PRAYING THIS HON’BLE COURT TO: (1) DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT.

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

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39727-DB ITA No. 277 of 2021

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.Sanmathi.E.I., for appellants/Revenue and learned counsel Smt.Tanmayee Rajkumar for 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 13.05.2020 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.359/Bang/2016 for the assessment year 2011-12.

3.

This

Court,

admitted the appeal on 17.02.2022 to consider the following substantial question of law: “i) Whether on the facts and in the circumstances of the case, the Tribunal is right in

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NC: 2024:KHC:39727-DB ITA No. 277 of 2021

law in holding Transfer pricing adjustment that the Transfer pricing Officer has already accepted the payment of 40% of maintenance services by the assessee in the earlier year, therefore, there is no reason to take a different view for this year ignoring that in taxation matters, each year is difference and there is no res-judicata in tax matter?

ii) Whether on the facts in the circumstances of the case, the order of the Tribunal can be said as perverse in nature as Tribunal has set aside Transfer pricing adjustment made by Transfer Pricing officer by ignoring findings of the TPO was based on critical inputs gathered through various questionnaires issued to assessee and the information collected, whereas the TPO purely based on the facts applied the profit split method logically and allotted only 10% of the technical services fees received from the maintenance services receipts from the customers to AE?”

4.

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:39727-DB ITA No. 277 of 2021

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

5.

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.

6.

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

MPK List No.: 2 Sl No.: 29

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