Ita/92/2021 Of Pr Commissioner Of Income Tax v. M/S Rambus Chip Technologies India Pvt Ltd

Digitally signedby BHARATHISLocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:40082-DBITA No. 92 of 2021 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. 92 OF 2021 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDINGS, QUEENS ROAD, BANGALORE-560 001. CENTRAL REVENUE BUILDINGS, QUEENS ROAD, BANGALORE-560 001. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5 (1)(1), BANGALORE. …APPELLANTS CIRCLE 5 (1)(1), BANGALORE. …APPELLANTS (BY SRI. SANMATHI E.I., ADVOCATE) AND: M/S. RAMBUS CHIP TECHNOLOGIES (INDIA) PVT. LTD., 12 FLOOR, TOWER C AND D, IBC KNOWLEDGE PARK, 4/1, BANNERGATTA ROAD, BANGALORE-AACCR8522M. PINCODE 560 083. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE) - 2 - NC: 2024:KHC:40082-DBITA No. 92 of 2021 THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 10/01/2020 PASSED IN ITA NO.978/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012. 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 10/01/2020 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH, BENGALURU, IN APPEAL PROCEEDINGS IN ITA NO. 978/BANG/2017 FOR ASSESSMENT YEAR 2011-2012 (ANNEXURE-A) AS SOUGHT FOR IN THIS APPEAL, AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. 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 - 3 - 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 10.01.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short ‘Appellate Authority’) in ITA.No.978/Bang/2017 for the assessment year 2011-12. 3. This Court, admitted the appeal on 22.8.2022 to consider the following substantial questions of law: 1. "Whether on the facts and circumstances of the case, the Tribunal is right in excluding comparable namely, M/s.Acropol Technologies Ltd on the ground that it fails the revenue segment from SWD service > 75% filter applied by the TPO without dealing with the issue of application of filters in case of a particular segment of a company being compared with the assessee and has merely relied upon its earlier order"? 2. "Whether on the facts and circumstances of the case, the Tribunal is right in excluding comparable's namely, M/S.ICRA Technologies Ltd, M/s.Persistent Systems Ltd and M/s.Sasken Communication Technologies Ltd on the ground that it fails RPT filter of 15% when 25% RPT filter is proper one which has been consistently applied by TPO in several cases and without giving reasons for adopting 15% RPT"? 3. 'Whether on the facts and circumstances of the case, the Tribunal is right in law in including comparable namely, M/s.FCS Software Solutions Pvt.Ltd by relying on its earlier order without considering the materials brought on record by Transfer Pricing Officer with regard to present assessment year and as such the order passed by Tribunal can be said as perverse in nature"? 4. Whether on the facts and circumstances of the case, the Tribunal is right in law in excluding and including certain comparable's without analyzing the materials brought on record by ТРО"? 4. Learned counsel for the assessee submits that 3. 'Whether on the facts and circumstances of the case, the Tribunal is right in law in including comparable namely, M/s.FCS Software Solutions Pvt.Ltd by relying on its earlier order without considering the materials brought on record by Transfer Pricing Officer with regard to present assessment year and as such the order passed by Tribunal can be said as perverse in nature"? 4. Whether on the facts and circumstances of the case, the Tribunal is right in law in excluding and including certain comparable's without analyzing the materials brought on record by ТРО"? 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 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