PR COMMISSIONER OF INCOME TAX vs. M/S RAMBUS CHIP TECHNOLOGIES INDIA PVT LTD

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ITA/83/2021HC KarnatakaKAHC01024543202025 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal, granting the Revenue liberty to revive it if it falls within exceptions under CBDT circulars. The substantial question of law was kept open.

What were the facts?

The Revenue appealed against an ITAT order concerning the exclusion of a comparable company in a transfer pricing assessment. The assessee argued that the appeal should not be entertained due to low tax effect, citing CBDT circulars.

What were the issues?

Whether the Tribunal was correct in excluding a comparable company based on functional dissimilarity, and whether the appeal is maintainable due to low tax effect as per CBDT circulars.

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:40083-DB ITA No. 83 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH 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. 83 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDINGS, QUEENS ROAD, BANGALORE 560 001

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1), BANGALORE …APPELLANTS (BY SRI. SANMATHI E I., ADVOCATE) AND:

M/S. RAMBUS CHIP TECHNOLOGIES (INDIA) PVT. LTD., 12TH FLOOR, TOWER C AND D, IBC KNOWLEDGE PARK, 4/1, BANNERGHATTA ROAD, BANGALORE AACCR8522M PIN CODE 560 083. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE)

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40083-DB ITA No. 83 of 2021

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 10/01/2020 PASSED IN IT(TP)A NO.1029/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012 PRAYING TO 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 SET ASIDE THE APPELLATE ORDER DATED 10/01/2020 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH, BENGALURU, IN APPEAL PROCEEDINGS IN IT(TP)A NO. 1029/BANG/2017 FOR ASSESSMENT YEAR 2011-2012 (ANNEXURE-A) AS SOUGHT FOR IN THIS APPEAL, AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

THIS APPEAL, COMING ON FOR 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

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NC: 2024:KHC:40083-DB ITA No. 83 of 2021

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 10.01.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short ‘Appellate Authority’) in IT[TP]A.No.1029/Bang/2017 for the assessment year 2011-12.

3.

This Court, admitted the appeal on 22.8.2022 to consider the following substantial question of law:

"Whether on the facts and circumstances of the case, the Tribunal is right in excluding comparable namely, E-Infochips Ltd on the basis of functional dissimilarity when the Transfer Pricing Officer has chosen the comparable's after application of all the

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NC: 2024:KHC:40083-DB ITA No. 83 of 2021

tests as prescribed in Rules and ignoring the materials brought on record by Transfer Pricing Officer and as such the order passed by Tribunal is perverse in nature?"

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 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

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NC: 2024:KHC:40083-DB ITA No. 83 of 2021

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

SMJ List No.: 2 Sl No.: 16

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