Back
2026 Supreme(Online)(Kar) 56050
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF OCTOBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
INCOME TAX APPEAL NO. 249 OF 2021
BETWEEN:
1. PRINCIPAL COMMISSIONER OF INCOME TAX
BMTC COMPLEX, KORAMANGALA, BENGALURU.
2. THE DEPUTY INCOME TAX OFFICER
CIRCLE 7(1)(1), BANGALORE.
…APPELLANTS
(BY SRI. E.I. SANMATHI, ADVOCATE)
AND:
M/s. TRIDENT MICROSYSTEMS INDIA
PVT. LTD.,
NO. 2924, THIRD FLOOR,
14TH CROSS, K R ROAD,
BSK II STAGE, BANGALORE-560070
PAN :AADCN1384L
…RESPONDENT
(RESPONDENT SERVED-UNREPRESENTED)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14/08/2020 PASSED IN IT(TP)A NO. 2234/BANG/2016, FOR THE ASSESSMENT YEAR 2012-2013 (ANNEXURE-A) PRAYING TO 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 SET ASIDE THE APPELLATE ORDER DATED 14/08/2020 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. IT(TP)A NO. 2234/BANG/2016 (ANNEXURE-A) FOR THE ASSESSMENT YEAR 2012-2013 AS SOUGHT FOR IN THIS APPEAL.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(DR.CHILLAKUR SUMALATHA)
JUDGE
DS CT:TSM List No.: 1 Sl No.: 10
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF OCTOBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
INCOME TAX APPEAL NO. 249 OF 2021
BETWEEN:
1. PRINCIPAL COMMISSIONER OF INCOME TAX
BMTC COMPLEX, KORAMANGALA, BENGALURU.
2. THE DEPUTY INCOME TAX OFFICER
CIRCLE 7(1)(1), BANGALORE.
…APPELLANTS
(BY SRI. E.I. SANMATHI, ADVOCATE)
AND:
M/s. TRIDENT MICROSYSTEMS INDIA
PVT. LTD.,
NO. 2924, THIRD FLOOR,
14TH CROSS, K R ROAD,
BSK II STAGE, BANGALORE-560070
PAN :AADCN1384L
…RESPONDENT
(RESPONDENT SERVED-UNREPRESENTED)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14/08/2020 PASSED IN IT(TP)A NO. 2234/BANG/2016, FOR THE ASSESSMENT YEAR 2012-2013 (ANNEXURE-A) PRAYING TO 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 SET ASIDE THE APPELLATE ORDER DATED 14/08/2020 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. IT(TP)A NO. 2234/BANG/2016 (ANNEXURE-A) FOR THE ASSESSMENT YEAR 2012-2013 AS SOUGHT FOR IN THIS APPEAL.
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 DR. JUSTICE CHILLAKUR SUMALATHA
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE S.G.PANDIT)
1. This appeal is filed under Section 260A of the ITA Act, 1961 is directed against 14.08.2020 in IT(TP)A No.2234/BANG/2016 passed by the Income Tax Appellate Tribunal, 'A' Bench, Bangalore for the assessment year2012-13.
2. The above appeal was admitted for hearing on the following Substantial Questions of Law by order dated19.02.2025:
"1. Whether on facts and the circumstances of the case and in law, Tribunal's order can be said as perverse in nature as Tribunal has directed Transfer Pricing officer to exclude M/s.Genesys International Corporation Ltd on the ground of functional dissimilarity though the Transfer Pricing Officer after application of required tests rightly held that comparable-company's functions are similar to that of assessee?
2. Whether on the facts and in the circumstances of the case, the Tribunal is not justified in law in not appreciating that there is no direct relationship between turnover of comparable and the margin earned by the companies engaged in Software Development Services and as such excluding of comparable-companies on ground of turnover filter is unwarranted?
3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing Transfer Pricing Officer to exclude comparable's when TPO has satisfied all required tests set out in Rule 10B and as such, the order passed by Tribunal is perverse as Tribunal has ignored the materials brought on record by TPO?"
3. The above appeal relates to transfer pricing and particularly exclusion of comparables as directed by the ITAT.
4. In the matter of transfer pricing, the Co-ordinate Bench of this Court in ITA No.10/2011 and connected appeals between the Sap Labs India Private Limited and The Income Tax Officer and others, by judgment dated 28.08.2026 on considering the relevant judgments of the Hon'ble Apex, has recorded the following findings:
i. The Court concludes that Chapter X of the Income-tax Act, 1961 constitutes a self-contained code governing transfer pricing, providing a complete statutory framework for determination of the Arm's Length Price (ALP), maintenance of documentation, and assessment of international transactions.
ii. The initial burden of determining the ALP and maintaining the prescribed documentation rests upon the taxpayer, while the Transfer Pricing Officer can interfere with the taxpayer's determination only upon satisfaction of the conditions stipulated under Section 92C(3) of the Act.
iii. The selection or exclusion of comparables is essentially a factual and data-drive
