THE PR. COMMISSIONER OF INCOME -TAX CIT (A) vs. M/S FESTO INDIA PVT LTD

PDF · subscribers
ITA/119/2020HC KarnatakaKAHC01019973202027 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 liberty to the Revenue to revive it if exceptions under the relevant CBDT circulars apply. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order directing the Transfer Pricing Officer to consider an Advanced Pricing Agreement (APA) for earlier assessment years. The assessee argued the appeal should not be entertained due to low tax effect as per CBDT circulars.

What were the issues?

Whether an APA entered for future assessment years can be applied to current assessment years, and if the ITAT's direction to consider it was perverse. The applicability of CBDT circulars regarding tax effect was also a key consideration.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:40410-DB ITA No. 119 of 2020

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH 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. 119 OF 2020

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME -TAX, 5th FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 11(3), PRESENT ADDRESS, DCIT, CIRCLE 3(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. …APPELLANTS

(BY SRI. SUSHAL TIWARI, ADVOCATE)

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:40410-DB ITA No. 119 of 2020

AND:

M/S FESTO INDIA PVT. LTD., 237B, BOMMASANDRA, INDUSTRIAL AREA, BENGALURU 560 099, PAN AAACF 2940F …RESPONDENT

(BY SRI. NAGESHWAR RAO, ADVOCATE; (SRI. MALLAHAR RAO, DESIGNATED AS AAG)

THIS ITA / INCOME TAX APPEAL IF FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 21/11/2019 PASSED IN IT(TP)A NO.969/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ETC.

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

- 3 -

NC: 2024:KHC:40410-DB ITA No. 119 of 2020

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri. Sushal Tiwari for appellants/Revenue and learned counsel Sri. Nageshwar Rao 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 21.11.2019 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.969/Bang/2014 for the assessment year 2009-10.

3.

This

Court,

admitted the appeal on 06.10.2020 to consider the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing officer to consider terms of Advanced Pricing Agreement (APA) entered into by assessee for assessment

- 4 -

NC: 2024:KHC:40410-DB ITA No. 119 of 2020

years 2014-15 to 2018-19 for present assessment years though it falls it is not covered in APA and mere concurrence of FAR cannot held as a basis to apply APA parameters?

2.

Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature since Tribunal has directed the Transfer Pricing officer to consider terms of Advanced Pricing Agreement (APA) entered into by assessee for assessment years 2014-15 to 2018-19 to consider the same for present assessment years even when the terms of the APA cannot be applied to assessment years under consideration?

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 -

NC: 2024:KHC:40410-DB ITA No. 119 of 2020

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

SMJ List No.: 4 Sl No.: 22

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →