आयकर अपीलीय न्यायाधिकरण में , हैदराबाद ‘बी’ बेंच , हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “B” Bench, Hyderabad , , श्री विजय पाल राि माननीय उपाध्यक्ष एिं श्री मंजूनाथ जी माननीय लेखा सदस्य SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT AND SHRI MANJUNATHA G, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.1395/Hyd/2024 (निर्धारण वर्ा/ Assessment Year: 2021-22)

M/s. Callidus Cloud (India Vs. The Deputy Commissioner of Private Limited, Income-tax, Hyderabad. Circle – 1(1), Hyderabad.

PAN : AAABCO0022A (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदाता का प्रतततितित्व/ : Shri Alisagar Rampurawala, Assessee C.A.

Represented by राजस्व का प्रतततितित्व/ : Shri Narendra Kumar Naik, Department Represented by CIT-DR सुिवाई समाप्त होिे की ततति/ : 08.12.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 10.12.2025 Date of Pronouncement

O R D E R

PER MANJUNATHA G., A.M :

This appeal filed by the assessee is against the final assessment order passed under Sections 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income-tax Act, 1961 (for short “the Act”), dated

23.10.2024, in pursuance to the Directions dated 19.09.2024 of the learned Dispute Resolution Panel–1 (“DRP”), Bengaluru, passed under Section 144C(5) of the Act, pertaining to the assessment year 2021-22.

2. The grounds raised by the assessee read as under :

“1. General Ground

1.1. On the facts and in the circumstances of the case and in law, the Final Assessment Order, to the extent prejudicial to the Appellant, is not in conformity with the procedures laid out in Section 144B of the Act and is bad in law, void ab initio and contrary to the facts and circumstances of the case and is liable to be quashed.

2. Legal Ground – Timelines under Section 153 of the Act

2.1. On the facts and in the circumstances of the case and in law, the Final Assessment Order dated 23.10.2024 passed by the Assessment Unit under Section 143(3) r.w.s. Section 144C(13) r.w.s. Section 144B of the Act is barred by limitation and therefore is void-ab-initio, bad in law and is liable to be quashed.

Document Identification Number

2.2. On the facts and in the circumstances of the case and in law, the Hon'ble DRP erred in issuing the directions quoting the Document Identification Number manually on the body of the said directions dated 19.09.2024 in contravention of CBDT Circular No. 19 of 2019, thereby rendering such directions invalid and deemed never to have been issued as per para 4 of the said Circular.

2.3. On the facts and in the circumstances of the case and in law, the Final Assessment Order dated 23.10.2024 passed under Section 143(3) r.w.s. Section 144C(13) of the Act by the Assessment Unit pursuant to invalid directions passed by the Hon'ble DRP is illegal and therefore null and void and liable to be quashed.

3. Software Development (‘SWD’) Services Segment (Tax Effect:

₹83,31,809/-)

3.1. On the facts and in the circumstances of the case and in law, the Hon'ble DRP / the Assessment Unit / learned TPO erred in making an upward adjustment of ₹3,31,04,770/- to the transfer price of the Appellant’s international transactions in respect of SWD services provided by the Appellant to its AEs.

3.2. On the facts and in the circumstances of the case, the Hon'ble DRP /

the Assessment Unit / learned TPO erred in:

(a) Rejection of Appellant’s comparability analysis and application of additional filters:

i. Selection of time period as per Rule 10B(5) using only current year data (FY 2020–21)

ii. Rejection of companies with different financial year ending iii. Rejection of companies having persistent losses based on PBT instead of operating profit/loss iv. Exclusion of companies whose services revenue is less than 75% of total operating revenue v. Exclusion of companies whose export service income is less than 75%

of sales vi. Exclusion of companies whose employee cost is less than 25% of turnover (b) Use of non-contemporaneous data not available in the public domain at the time of preparing TP documentation.

(c) Inclusion of compa