THE PR COMMISSIONER F INCOME TAX - 2 vs. M/S MICROCHIP TECHNOLOGIES (INDIA) PVT LTD

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ITA/247/2021HC KarnatakaKAHC01009668202124 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 the cited 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 the assessment year 2011-12. The assessee argued that the appeal should not be entertained due to low tax effect, citing CBDT circulars.

What were the issues?

Whether the ITAT correctly directed the exclusion of comparables in transfer pricing analysis, and if its order was perverse in doing so without considering the TPO's findings.

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:39765-DB ITA No. 247 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. 247 OF 2021 BETWEEN:

1.

THE PR. COMMISSIONER F INCOME TAX – 2, BMTC COMPLEX, KORAMANGALA, BENGALURU.

2.

THE ASSISTANT COMMISSIONER INCOME TAX CIRCLE 4(1)(2), BMTC COMPLEX, KORMANGALA, BANGALORE. …APPELLANTS (BY SRI SANMATHI E I.,ADVOCATE) AND:

1.

M/S MICROCHIP TECHNOLOGIES (INDIA) PVT LTD., NO 149-B, EPIP I PHASE, INDUSTRIAL AREA, WHITEFIELD, BANGALORE 569066, PAN NO AABCM9868J. …RESPONDENT (BY MISS MANASA ANANTHAN, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 04/09/2020 PASSED IN IT(TP)A NO.497/BANG/2016, FOR THE ASSESSMENT YEAR 2011-2012, PRAYING THIS HON’BLE COURT TO: (A) 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 AND ETC.

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

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39765-DB ITA No. 247 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 Miss.Manasa Ananthan 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 04.09.2020 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.497/Bang/2016 for the assessment year 2011-12.

3.

This

Court,

admitted the appeal on 25.05.2022 to consider the following substantial question of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in

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NC: 2024:KHC:39765-DB ITA No. 247 of 2021

law in directing Transfer Pricing Officer to exclude comparable’s by ignoring the parameters of analysis prescribed under Rule 10B, which are exhaustive and, if so, whether it is legally permissible to bypass the same partially or by implication?

2.

Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perve3rse in nature since Tribunal has directed Transfer Pricing Officer to exclude M/s.Accropetal Technologies Ltd., M/s.E-zest Solutions Ltd. And M/s.ICRA Techno Analytics Ltd., on ground of functional dissimilarity without considering findings of Transfer Pricing Officer in TPO order whereby the said authority has categorically are similar to that of assessee in respect of nature of filed they are involved?”

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 Taxes. It is also

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NC: 2024:KHC:39765-DB ITA No. 247 of 2021

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.:0

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