Ita/470/2023 Of The Pr Commissioner Of Income Tax v. Onmobile Global Ltd

Digitally signedby BHARATHISLocation: HIGHCOURT OFKARNATAKA ITA No. 470 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 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. 470 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU 560001 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU 560001 2. THE ASST. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 5 (1) (2), PRESENT ADDRESS DCIT, CENTRAL CIRCLE 1 (2), 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU 560001 OF INCOME TAX CIRCLE 5 (1) (2), PRESENT ADDRESS DCIT, CENTRAL CIRCLE 1 (2), 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU 560001 …APPELLANTS (BY SRI. DILIP M.,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE) AND: ONMOBILE GLOBAL LTD TOWER #1, 94/1C AND 94/2, VEERASANDRA VILLAGE, ATTIBELE HOBLI, ANEKAL TALUK, ELECRONICS CITY, PHASE 1, BENGALURU 560100 PAN AAACO 3900E …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN MP NO. 58/BANG/2023 (IN IT(TP)A NO. 2560/BANG/2019) DATED 31/03/2023 FOR ASSESSMENT YEAR 2015-2016 ANNEXURE-E AND CONFIRM THE ORDER OFF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), 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. Dilip. M., along with Sri. Raviraj Y.V., for appellants/Revenue and learned counsel Smt. Tanmayee Rajkumar., learned counsel 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 31.03.2023 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in MP No.58/Bang/2023 (IT(TP)A No.260/Bang/2019 for the assessment year 2015-16, 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 in allowing the deduction of tax paid on outside India under section 40A(ia) of the Act by holding that tax paid outside India would be outside the ambit of definition of tax as defined in Section 2(43) of the Act ignoring that same is not allowable as the tax paid in India is Nil and allowing deduction would amount to paying the same from Government Treasury in the absence of any tax paid in India? circumstances of the case, the Tribunal is right in law in allowing the deduction of tax paid on outside India under section 40A(ia) of the Act by holding that tax paid outside India would be outside the ambit of definition of tax as defined in Section 2(43) of the Act ignoring that same is not allowable as the tax paid in India is Nil and allowing deduction would amount to paying the same from Government Treasury in the absence of any tax paid in India? 2. Whether on the facts and circumstances of the case, the Tribunal is right in law not appreciating the fact that assessing authority rightly made disallowance under section 40 (a)(ia) of the Act as conditions for invoking same are satisfied?” the case, the Tribunal is right in law not appreciating the fact that assessing authority rightly made disallowance under section 40 (a)(ia) of the Act as conditions for invoking same are satisfied?” 3. Learned counsel for the assessee submits that 2. Whether on the facts and circumstances of the case, the Tribunal is right in law not appreciating the fact that assessing authority rightly made disallowance under section 40 (a)(ia) of the Act as conditions for invoking same are satisfied?” the case, the Tribunal is right in law not appreciating the fact that assessing authority rightly made disallowance under section 40 (a)(ia) of the Act as conditions for invoking same are satisfied?” 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 BS - List No.: 4 Sl No.: 40