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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL NO. 723 OF 2023 BETWEEN:
PR. COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), KORMANGALA, BANGALORE.
THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE 1(2), KORMANGALA, BANGALORE. …APPELLANTS
(BY SRI. SANMATHI E. I., ADV.)
AND:
M/S. PLURALSIGHT LLC 182N UNION AVENUE, FARMINGTON, UTAH FOREIGN, UNITED STATES OF AMERICA PAN: AAHCP5337K …RESPONDENT
(BY SRI. T. SURYANARAYANA, SR. ADV. FOR SMT. TANMAYEE RAJKUMAR, ADV.)
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 21/08/2023 PASSED IN ITA NO. 37/BANG/2023, FOR THE ASSESSMENT YEAR 2016-17, PRAYING TO 1). DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH
Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA
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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON’BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 21/08/2023 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN ITA NO. 37/BANG/2023 FOR A.Y 2016-17. (ANNEXURE A) AND ETC.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE S.G.PANDIT)
This appeal by the Revenue under Section 260-A of the Income Tax Act, 1961 is directed against the order dated 21.08.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru in appeal proceedings in ITA.No.37/Bang/2023 for the assessment year 2016-17, raising the following substantial questions of law:
“1. Whether on the facts an din the circumstances of the case, the Tribunal’s order is perverse in nature in setting aside the additions made in assessment order by relying
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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
the judgment of Hon’ble Apex Court in case of Engineering Analysis Centre of Excellence Pvt Ltd Vs. CIT (reported in 432 ITR page 471) without appreciating that in the case of assesse are not similar and even when Review Petition filed by Revenue is pending for adjudication before Supreme Court in case Engineering Analysis Centre of Excellence?
Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in disregarding the findings rendered by assessing officer that the provisions of the DTAA between India-US with regard to Royalty are to be interpreted in harmony with the Section 9 of the Act?
Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in holding nature of services rendered cannot be said as Fee for Technical Services ignoring that the conditions set out definition clause of in Explanation 2 to Section 9(1)(vii) of the Act and the Double
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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
Taxation Avoidance Agreement as well are fully satisfied in present case?
Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in ignoring the various clauses of the Agreement which signified that the overseas entity through the employees rendered technical, managerial and consultancy services, thus satisfying FTS as per the provisions of the Act and also under DTAA?”
The Tax effect shown in the appeal memorandum is Rs.1,27,10,934/-.
Heard learned counsel Sri.E.I.Sanmathi for appellants/Revenue and learned senior counsel Sri.T.Suryanarayana for Smt.Tanmayee Rajkumar, learned counsel for the respondent. Perused the entire appeal papers.
Learned senior counsel Sri.T.Suryanarayana for respondent referring to Circular No.9/2024 dated 17.09.2024 submits that the appeal would not be
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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
maintainable in view of increasing the monetary limit to Rs.2,00,00,000/- to file appeal. It is also submitted that the said Circular would apply to the pending appeals before the Hon’ble Supreme Court, High Courts and the Tribunals.
On the other hand, learned counsel Sri.Sanmathi.E.I., for appellants/Revenue would submit that this case would fall under exception clause 3.1(l) and
(ii) of Circular No.5/2024 dated 15.03.2024, since it is a case arising out of the DTAA.
On perusal of the exception clause, it is seen that the appeals of International taxation charges where the dispute relates to the applicability of the provisions of a Double Taxation Avoidance Agreement or otherwise is made exception.
But, in the instant appeal, applicability of the provisions of Double Taxation Avoidance Agreement is not
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HC-KAR NC: 2025:KHC:31119-DB ITA No. 723 of 2023
in question. Therefore, the contention of the learned counsel for the appellant/Revenue is unsustainable.
In view of the fact that the tax effect is less than Rs.2,00,00,000/-, the appeal stands rejected.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (K. V. ARAVIND) JUDGE
NC CT:bms List No.: 1 Sl No.: 24