Ita/220/2021 Of The Pr. Commissioner Of Income Tax v. M/S. Aci Worldwide Solutions Pvt Ltd

Digitallysigned byBHARATHI SLocation:HIGH COURTOFKARNATAKA NC: 2024:KHC:39406-DB ITA No. 220 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23 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. 220 OF 2021 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560 095. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(1)(1), CIRCLE-1(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD,KORAMANGALA, BENGALURU-560 095. …APPELLANTS (BY SRI. RAVI RAJ Y V.,ADVOCATE A/W SRI. DILIP M, ADVOCATE) AND: M/S. ACI WORLDWIDE SOLUTIONS PVT LTD NO.9, SALARPURIA CAMBRIDGE MALL, CAMBRIDGE ROAD, ULSOOR, BENGALURU-560 008, PAN- …RESPONDENT (BY SRI. NARENDRA KUMAR J JAIN.,ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. TO 160/BANG/2016 DATED 27/04/2020 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-D AND CONFIRM THE ORDER OF THE DRP COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONR OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU 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 Raviraj Y.V, along with learned counsel Sri Dilip M, for appellants/Revenue and learned counsel Sri Narendra Kumar J Jain, 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 27.4.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.160/Bang/2016 for the assessment year 2011-2012, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law excluding comparable’s namely, Persistent Systems & Solutions Ltd., Persistent Systems Ltd., E – Zest Solutions Ltd., Larsen & Tourbo Infotech Ltd., Tata Elxi Ltd., Acropetal Technologies Ltd., E-Infochips Ltd., ICRA Technologies Ltd., ICC International Agencies Ltd and Asian Business Exhibition & Conference Ltd on the ground of functional dissimilarity when the said companies satisfied qualitative and quantitative filers applied by Transfer Pricing Officer and they are functionally similar to that of assessee. Therefore, the order passed by Tribunal is perverse in nature? 2. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal has directed the assessing authority to exclude comparable even when the TPO has chosen proper comparable by application of all required tests? 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority/transfer pricing officer to re-consider the matter to file of transfer Pricing Officer/Assessing Officer in case of comparable’s namely Sasken Communication Technologies Ltd., Evoke Technologies Ltd and R.S. Software India Ltd even though the assessing authority/Transfer Pricing Officer had passed order in accordance with Rule 10B of the Rules?” 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. 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 questions of law are kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE