Ita/97/2022 Of The Commissioner Of Income Tax v. M/S Cgi Information Systems And Management Consultants Pvt Ltd

NC: 2024:KHC:39411-DBITA No. 97 of 2022 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. 97 OF 2022 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION, CIRCLE-1(2), 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095 …APPELLANTS Digitallysigned by(BY SRI. RAVI RAJ Y V.,ADVOCATE A/W BHARATHI S SRI. DILIP M, ADVOCATE) Location:HIGH COURTAND:OFKARNATAKAM/S CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTANTS PVT LTD NO.95/1 AND 95/2, E CITY TOWER-2, ELECTRONIC CITY PHASE-1, WEST, BENGALURU-560100. PAN:AAAC11994C. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO - 2 - FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 735/BANG/2020 DATED 05.04.2021 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE-1(2) BENGALURU AND ETC. THIS APPEAL, COMING ON FOR FINAL 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 Smt Tanmayee Rajkumar, 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 5.4.2021 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.735/Bang/2020 for the assessment year 2011-12, raising the following substantial questions of law: - 3 - “1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the appeal of the assessee holding that DTA provisions will override section 206AA of the act even if it is inconsistent with Income Tax Act, 1961 ignoring CBDT Circular No.5/2010 whereby it is clearly stated that provisions of section 206AA will also apply to non-residents where TDS is deducted on payments or credits made to them and the NR does not have a PAN. And also as per Notification dated 24.6.2016 whereby certain relaxation has been made in case of non-residents only if the details of documents specified in sub-rule (2) of the said notification are furnished? 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 failed to consider the spirit of section 206AA of the Act?" 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 ND List No.: 3 Sl No.: 26