DCIT, INTERNATIONAL TAXATION, CIRCLE-2(1), BENGALURU, BENGALURU vs. ANDREW TELECOMMUNICATION SYSTEMS (SINGAPORE) PTE LIMITED, SINGAPORE

PER KESHAV DUBEY, JUDICIAL MEMBER:

1. Whether on the facts and in the circumstances of the case and in law, the CIT(A)-12, was right in ignoring the fact that in intimation u/s 143(1) adjustments can be made in respect of incorrect claim? 2. Whether on the facts and in the circumstances of the case and in law, the CIT(A)-12 was right in not considering the fact that the Indian entity had made TDS on payments made and are reflected in 26AS and the assessee has not submitted receipts in relation to payments made?

3. Whether on the facts and circumstances of the case and in law, the CIT(A)-12, erred in not considering the fact that the payments received by the assessee company for Management Service Fees are not taxable as Royalty without considering that the processes were triggered from India, thereby making the source of such income accrue/arise out of India, for the assessee to earn the income and the payments were made by the deductor by collecting it from the ultimate prayer i.e., the end consumer in India for services rendered?

268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of --

(a) the same assessee for any other assessment year; or (b) any other assessee for the same or any other assessment year.

(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.

(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub- section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.

(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.] Further, recently the CBDT issued circular U/s 268A of the Act for filing appeals by the department before the ITAT, High Courts & SLPs/appeals before Supreme Court vide circular No. 5/2024 dated 15/03/2024 in supersession of Circular No. 3/2018 dated 11/07/2018, Circular No.17/2019 dated 08.08.2019 & Board’s letter in F.No.279/Misc.142/2007-ITJ(Pt) dated 20/08/2018.

It is not in dispute that the Board’s orders/instructions/directions issued to the Income Tax authorities are binding on them. Therefore in our view the revenue ought to have withdrawn the Appeal as directed after the circular No.09/2024 dated 17/09/2024 came into Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 4 of 7 force especially when their case does not falls under the exceptions as enumerated in the circular No.05/2024 dated 15/03/2024.

Further we have also gone through the recent CBDT Circular No.9/2024 dated 17.9.2024, which is an amendment to Circular No. 5 of 2024 dated 15/03/2024, reproduced below for ease of reference & convenience :-

4.1 On going through the above circular, we noted that as a step towards management of litigation, it has been decided by the Board to revise the monetary limits for filing appeals in Income tax cases before the Income Tax Appellate Tribunal to Rs.60 lakhs instead of existing Rs.50 lakhs. Further in paragraph-5 of the above Circular we find that, the modifications shall come into effect from the date of issuance of the Circular i.e. on & from & w.e.f. 17/09/2024. Further, it is stated that this Circular will apply to SLP/Appeals to be filed henceforth in SC/HCs/Tribunal. Further, it is also stated that it shall also apply to the SLP/Appeals pending before Supreme Court/High Court/Tribunal, which may accordingly be withdrawn.

4.2 On going through the present appeal of the revenue, we take a note of the fact that total tax effect is Rs.56,18,477/-, which is way below the monetary limit specified under the Board’s above circular dated 17/09/2024. Further, on going through the circular we also take a note that the said circular shall also apply to the SLPs/appeals pending before Supreme Court/ High Courts/ Tribunals which may accordingly be withdrawn. The Revenue also could not point out any exceptional circumstances where the decision to appeal/file SLP shall be taken on merits without regard to the tax effect and the monetary limit. Similarly, we are also of the opinion that the Hon’ble Delhi High Court in the case of CIT Vs. Delhi Race Club Ltd. in order dated 3.3.2011 by following the earlier order dated 2.8.2010 in ITA No.179/1991 in the case of CIT Delhi-III Vs. M/s. P.S. Jain & Co. held that such circular would also be applicable to pending cases.

4.3 From the ratio laid down by the Hon’ble Delhi High Court, it is clear that orders/instructions/directions issued by CBDT by way of circular are applicable for pending cases also. Therefore, keeping in view the ratio laid down in the aforesaid referred to cases, we are of the considered view that the Circular No.9/2024 dated 17.9.2024, issued by the CBDT are also applicable for the pending cases and in the said circular monetary tax limit for not filing the appeal before the income tax appellate tribunal is Rs.60 lakhs whereas in the present appeal the tax effect as stated by the ld. DR is Rs.56,18,477/- only. Further, it is also affirmed in the circular that it shall also apply to the SLP/Appeals pending before Supreme Court/High Court/Tribunal, which may accordingly be withdrawn.

Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 7 of 7 In view of the above, without going into the merit of the case, we dismiss the appeal filed by the revenue as not maintainable.

Asst. Registrar, ITAT, Bangalore.