PR. COMMISSIONER OF INCOME TAX 3 vs. INFINERA INDIA PVT LTD

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ITA/234/2021HC KarnatakaKAHC01004906202124 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the tax effect in the appeal was below the threshold stipulated in CBDT Circular No. 09/2024, making the appeal not maintainable. The appeal was disposed of with liberty to revive if exceptions applied.

What were the facts?

The Revenue appealed against an order of the Income Tax Appellate Tribunal concerning the assessment year 2011-12. The appeal raised substantial questions of law regarding the exclusion/inclusion of comparables in transfer pricing analysis.

What were the issues?

Whether the Tribunal correctly applied Rule 10B parameters in selecting comparables for transfer pricing, and if the tax effect threshold renders the appeal non-maintainable.

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:39710-DB ITA No. 234 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH 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. 234 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX 3, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE INCOME TAX OFFICER WARD-3 (1) (4), BMTC COMPLEX, KORAMANGALA, BENGALURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE) AND:

1.

INFINERA INDIA PVT LTD., NO.401, LEVEL 4, PRESTIGE SOLITAIRE, NO.6, BRUNTON ROAD, ASHOK NAGAR, BENGALURU-560025. …RESPONDENT

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 13/03/2020 PASSED IN IT(TP)A NO.1516/BANG/2018, FOR THE ASSESSMENT YEAR 2011-2012, PRAYING THIS HON’BLE COURT TO: 1. 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 ETC.

THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39710-DB ITA No. 234 of 2021

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

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

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue.

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 13.03.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1516/Bang/2018 for the assessment year 2011-12.

3.

This Court admitted the appeal on raising the following substantial questions of law: “1. Whether on the facts and circumstances of the case and in law, the Tribunal is right in law in excluding/including certain comparable’s ignoring the parameters of analysis prescribed under Rule 10B, which are exhaustive and, if so, whether it is

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NC: 2024:KHC:39710-DB ITA No. 234 of 2021

legally permissible to bypass the same partially or by implication?

2.

Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse since Tribunal has excluded certain comparable’s without going into reasons assigned by Transfer Pricing Officer?

3.

It is noticed that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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.

4.

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.

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NC: 2024:KHC:39710-DB ITA No. 234 of 2021

5.

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

MPK List No.: 2 Sl No.: 26

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