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2024 Supreme(Online)(KAR) 27969
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. 329 OF 2019 BETWEEN:
1. THE PR. COMMISSIONER OF INCOME TAX CIT(A), 5TH FLOOR BMTC BUILDING, 80 FEET ROAD KORAMANGALA, BENGALURU-560095.
2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(1)(1)
2ND FLOOR, BMTC BUILDING
80 FEET ROAD, KORAMANGALA BENGALURU-560095.
…APPELLANTS (BY SRI. SUSHAL TIWARI, ADV.)
AND:
M/S. CSG SYSTEMS INTERNATIONAL PVT. LTD., (FORMERLY KNOWN AS M/S. INDEPENDENT Digitally signed by TECHNOLOGY SYSTEMS (INDIA) PVT. LTD.,)
MARIGANGAIAH DIVYASHREE TOWERS, 4TH FLOOR PREMAKU MARI NO.55, GURUPPANNA PALYA Location: HIGH MADIVALA RANGE, BENGALURU-560029 COURT OF PAN: AABCI 2954B.
KARNATAKA …RESPONDENT (BY SRI. K.R. VASUDEVAN, ADV. A/W SRI ANKUR P.D., ADV.)
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 16/11/2018PASSED IN CO NO.159/BANG/2015 IN (IT(TP)A NO.1086/BANG/2013), FOR THE ASSESSMENT YEAR 2008-2009, PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN C.O.NO.159/BANG/2015 IN (IT(TP)A NO. 1086/BANG/2013) DATED 16/11/2018 FOR ASSESSMENT YEAR 2008-2009 ANNEXURE-D CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), BENGALURU AND ETC.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
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.Sushal Tiwari., for appellants/Revenue and learned counsel Sri.K.R.Vasudevan along with Sri.Ankur.P.D., learned counsel 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 16.11.2018 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in C.O.No.159/Bang/2015 (in IT(TP)A.No.1086/Bang/2013)
for the assessment year 2008-09.
3. This Court, admitted the appeal on
18.10.2019 to consider the following substantial question of law:
“1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in excluding certain comparables on thebasis of functional dissimilarity by following its earlier judgment which has not reached finality and even when the Transfer Pricing Officer has considered the comparables on the basis of qualitative and quantitative filters?
2. Whether on the facts and in the circumstances of the case, Tribunal is right in law in directing Transfer Pricing Officer to exclude certain comparable’s on basis of turnover filter even when the TPO has rightly chosen the comparable’s in accordance with provisions of the Act and rules prescribed thereunder?”
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. 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.
JUDGE
