THE COMMISSIONER OF INCOME TAX vs. M/S CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTANTS PVT LTD

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ITA/97/2022HC KarnatakaKAHC01030051202123 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal, granting the Revenue liberty to revive it if the case falls within exceptions of CBDT Circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that allowed the assessee's appeal, holding that DTA provisions override Section 206AA of the Income Tax Act. The Revenue questioned whether the Tribunal correctly applied Section 206AA, especially for non-residents without PAN.

What were the issues?

Whether DTA provisions override Section 206AA for non-residents without PAN, and if the Tribunal's order was perverse in not considering the spirit of Section 206AA.

Which sections of the Income-tax Act were involved?

Section 206AA,Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39411-DB ITA No. 97 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD 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. 97 OF 2022 BETWEEN:

1.

THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION, CIRCLE-1(2), 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095 …APPELLANTS (BY SRI. RAVI RAJ Y V.,ADVOCATE A/W SRI. DILIP M, ADVOCATE)

AND:

M/S CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTANTS PVT LTD NO.95/1 AND 95/2, E CITY TOWER-2, ELECTRONIC CITY PHASE-1, WEST, BENGALURU-560100. PAN:AAAC11994C. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39411-DB ITA No. 97 of 2022

FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 735/BANG/2020 DATED 05.04.2021 FOR ASSESSMENT YEAR 2011- 2012 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE-1(2) BENGALURU AND ETC.

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

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 Raviraj Y.V, along with learned counsel Sri Dilip M, for appellants/Revenue and learned counsel Smt Tanmayee Rajkumar, for the 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 5.4.2021 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.735/Bang/2020 for the assessment year 2011-12, raising the following substantial questions of law:

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NC: 2024:KHC:39411-DB ITA No. 97 of 2022

“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the appeal of the assessee holding that DTA provisions will override section 206AA of the act even if it is inconsistent with Income Tax Act, 1961 ignoring CBDT Circular No.5/2010 whereby it is clearly stated that provisions of section 206AA will also apply to non-residents where TDS is deducted on payments or credits made to them and the NR does not have a PAN. And also as per Notification dated 24.6.2016 whereby certain relaxation has been made in case of non-residents only if the details of documents specified in sub-rule (2) of the said notification are furnished?

2.

Whether, on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal has failed to consider the spirit of section 206AA of the Act?"

3.

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.

4.

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.

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NC: 2024:KHC:39411-DB ITA No. 97 of 2022

5.

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 questions of law are kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

ND List No.: 3 Sl No.: 26

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