THE PR COMMISSIONER OF INCOME TAX vs. ADC INDIA COMMUNICATIONS LTD

THE PR COMMISSIONER OF INCOME TAX 5TH FLOOR BMTC BUILDING 80 FEET ROAD KORMANGALA BENGALURU-560095.

THE ASST COMMISSIONER OF INCOME TAX CIRCLE-1(1) (1) 2ND FLOOR BMTC BUILDING 80 FEET ROAD KORMANGALA BENGALURU-560095. …APPELLANTS (BY SRI. DILIP M, ADVOCATE A/W SRI. RAVI RAJ Y V .,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 29.04.2022 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.79/Bang/2016 for the assessment year 2011- 12, raising the following substantial questions of law:

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 directed the assessing authority to exclude comparable even when the TPO has chosen proper comparable by application of all required tests?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority/transfer pricing officer to exclude comparables on basis of turnover even though the assessing authority/Transfer Pricing Officer had passed order in accordance with Rule 10B of the Rules and by applying RPM method as most appropriate method?

Whether on the facts and in the circumstances of the case, The Tribunal is right in law in directing the assessing authority to exclude comparable in list even when the TPO has chosen proper comparable by application of all required tests?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority to exclude certain comparable in list even when the TPO has chosen proper comparable by application of all required tests?

Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in setting aside disallowance made under section 40(a)(ia) read with section 9(1)(vii) of the Act to an extent of `1,36,42,976 as assessee failed to deduct TDS on said payment which is towards fees on technical serves ignoring that conditions set out in said provisions were fully satisfied in case of assessee to make such disallowance?

Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in setting aside disallowance made under section 40A(7) of the Act on claim of contribution made to approved gratuity fund ignoring that conditions set out in said provisions were fully satisfied in case of assessee to make such allowance?”

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

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 question of law is kept open to be adjudicated in an appropriate proceeding.