Ita/173/2021 Of Principal Commissioner Of Income Tax v. M/S Technotree Convergence Ltd

Digitallysigned byBHARATHI SLocation:HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25 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. 173 OF 2021 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BMTC COMPLEX, KORAMANGALA, BENGALURU. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -16(1), NEW DELHI. 3. INCOME TAX OFFICER, WARD - 16(2), NEW DELHI …APPELLANTS (BY SRI. SANMATHI E I., ADVOCATE) AND: M/S. TECHNOTREE CONVERGENCE LTD., 16 FLOOR, DLF BUILDING NO.5, TOWER-III, GURGOAN-122 002 PAN: …RESPONDENT (BY SRI. K.R. VASUDEVAN, ADVOCATE A/W SRI. ANKUR P.D., ADVOCATE) THIS ITA/ INCOME TAX IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:03.06.2020 PASSED IN ITA NO.2815 AND 2830/DEL/2013 FOR THE ASSSESSMENT YEAR 2008-09 (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 ETC. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA - 3 - ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri. E.I.Sanmathi for appellants/Revenue and learned counsel Sri. K.R.Vasudevan along with learned counsel Sri. Ankur.P.D., for the 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 03.6.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short ‘Appellate Authority’) in ITA.Nos.2815 & 2830/Del/2013 for the assessment year 2008-09, raising the following substantial questions of law: (1) "Whether on the facts and circumstances of the case, the Tribunal was right in law in setting aside disallowance made under section 40(a)(ia) of the Act in respect of payments made by assessee in foreign currency by holding that the provisions of section 195 are not applicable in the facts of present case ignoring that assessee had failed to establish nature of payments and even during the appellate proceedings, the assessee had not submitted complete details about the nature of services rendered by the payees for which commission has been paid and whether this would fall beyond the scope for fee for technical services?" (2) "Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that the nature of commission payments are not in dispute when the assessing authority has clearly disputed the same and made disallowance under section 40(a)(ia) of the Act since all the conditions set out in said provision was fulfilled"? 3. 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. 4. 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. 5. 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