Ita/154/2022 Of Principal Commissioner Of Income Tax -3 v. M/S Ittiam Systems Pvt Ltd

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 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. 154 OF 2022 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX -3, BMTC COMPLEX, KORAMANGALA, BANGALORE. 2. INCOME TAX OFFICER, WARD-3(1)(2), BMTC COMPLEX, KORAMANGALA 6 BLOCK BENGALURU. BMTC COMPLEX, KORAMANGALA 6 BLOCK BENGALURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE) AND: 1. M/S ITTIAM SYSTEMS PVT LTD., NO.1, CONSULATE 1, RICHMOND ROAD, BENGALURU-560025, PAN AAAC17628B. …RESPONDENT (BY SMT TANMAYEE RAJKUMAR, ADVOCATE) THE APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 13/01/2021 PASSED IN ITA NO.2464/BANG/2017, FOR THE ASSESSMENT YEAR 2013-2014 PRAYING THIS HON’BLE COURT 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 ETC. 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 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 and learned counsel Smt.Tanmayee Rajkumar 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 13.01.2021 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2464/Bang/2017 for the assessment year 2013-14. 3. This Court, admitted the appeal on 21.02.2022 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 holding that the assessing authority is not right in restricting claim of assessee relating to Foreign Tax Credit in respect of USA, Japan and Germany even though assessee is not entitled for such claim as per section 90 of the Act coupled with provisions of respective Double Taxation Avoidance Agreement's (DTAA's) entered into by India? 2. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in holding that assessee is eligible for full claim made under section 90 of the Act relating to FTC even when conditions set out in said section are not satisfied in case of assessee with respect of restricted amount/turnover and when decision relied upon by Tribunal has reached finality?” 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 - 4 - 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. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE MPK List No.: 2 Sl No.: 0