THE COMMISSIONER OF INCOME TAX CIT (A) vs. M/S MIND TREE LTD

THE COMMISSIONER OF INCOME TAX CIT (A) CENTRAL CIRCLE, C R BUILDING, QUEEN'S ROAD, BENGALURU-560001

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE- 11(1) C R BUILDING, QUEEN'S ROAD, BENGALURU-560001 …APPELLANTS (BY SRI RAVIRAJ Y V, ADVOCATE A/W SRI. M DILIP .,ADVOCATE)

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 22.10.2020 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.349/Bang/2014 for the assessment year 2005-2006, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal erred in directing the TPO to exclude comparable namely, IGate Global Solutions, Flextronics

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 ignored the findings rendered by Transfer Pricing Officer and also materials brought on record by said officer which establishes that exclusion of comparable was in accordance with parameters of Rule 10B?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to exclude Bodhtree Consulting Ltd., Tata Elxsi Ltd., Expenses Software Ltd and Third ware Solutions Ltd on the ground of functional dissimilarity without considering the Transfer Pricing analysis made by TPO and ignoring materials brought on record by said authority?"

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