THE PR COMMISSIONER OF INCOME TAX vs. M/S CENDUIT (INDIA) SERVICES PVT LTD

THE PR. COMMISSIONER OF INCOME TAX, KORAMANGALA, BANGALORE.

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), BMTC COMPLEX, KORMANGALA, BANGALORE. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE) AND:

M/S CENDUIT (INDIA) SERVICES PVT LTD., OMEGA EMBASSY, TECHSQUARE, MARATHAHALLI, SARJAPUR OUTER RING ROAD, KADUBESANAHALLI, BANGALORE-560103, PAN AABCI6552K. …RESPONDENT

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 12.01.2021 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.227/Bang/2023 for the assessment year 2016-17, raising the following substantial questions of law: "1. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in directing the Transfer Pricing Officer to exclude

Whether on the facts and circumstances of the case and in law, the Tribunal was justified in disregarding the position of law that there could be differences between the enterprises compared under the Transaction Net Margin Method that are not likely to materially affect the price or cost charged or the profits accruing to such enterprises?

Whether on the facts and circumstances of the case and in law, the Tribunal was justified in not following its own decision in the case of M/s Societe General Global Solution Centre (P) Ltd Vs DCIT. Circle -12(3). Bangalore vide IT (TP) A No.118 (Bang)2011, the jurisdictional ITAT Bangalore has

Whether on the facts and circumstances of the case and in law, the Tribunal was justified in rejecting comparable cases by insistence on strict comparability under TNMM defeats the very purpose of the law relating to determination of Arms Length Price under income Tax Act?

Whether on the facts and circumstances of the case and in law, the Tribunal was justified in ruling a decision that education cess is an allowable expenditure, contravening the express provisions of the IT Act in section 40(a)(ii) vide Finance Act, 2022 with retrospective effect from A.Y.2005-06? "?

It is noticed that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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 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.

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.