DCIT, INTERNATIONAL TAXATION, CIRCLE-2(1), BENGALURU, BENGALURU V. ANDREW TELECOMMUNICATION SYSTEMS (SINGAPORE) PTE LIMITED, SINGAPORE

ITA 1651/BANG/2024

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, International Taxation Circle-2(1), Bangalore against Andrew Telecommunication Systems (Singapore) Pte. Ltd. concerning the assessment year 2018-19. The appeal was directed against the order of the CIT(A)-12, which had addressed issues related to incorrect claims and the taxability of management service fees as royalty. The revenue contended that the CIT(A) had erred in ignoring certain facts regarding TDS on payments and the taxability of income sourced from India. However, the appeal was dismissed based on the monetary limits set by the CBDT, which restricts the filing of appeals by the revenue unless the tax effect exceeds Rs. 60 lakhs.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34090 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-11-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 27-08-2024
• Other Referred Cases: CIT Vs. Delhi Race Club Ltd., CIT Delhi-III Vs. M/s. P.S. Jain & Co.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KETAN VED.
• Assessee Lawyers: V. PARITHIVEL
• Keywords: Tax effect; TDS
• Section: 250; 143(1); 208; 268A

Judgement Text

"ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER IT(IT)A No.1651/Bang/2024 Assessment Year : 2018-19 DCIT International Taxation Circle-2(1) Bangalore Vs. Andrew Telecommunication Systems (Singapore) Pte. Limited No.51, 2 08 04 The Signature Changli Business Park 208 Singapore 486 066 PAN NO :AALCA6675R APPELLANT RESPONDENT Appellant by : Sri Ketan Ved., A.R. Respondent by : Shri V. Parithivel, D.R. Date of Hearing : 18.11.2024 Date of Pronouncement : 25.11.2024 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of revenue is directed against the order of ld. CIT(A) for the assessment year 2018-19 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). The Revenue has raised following grounds of appeal: 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A)-12, was right in ignoring the fact that in intimation u/s 143(1) adjustments can be made in respect of incorrect claim? 2. Whether on the facts and in the circumstances of the case and in law, the CIT(A)-12 was right in not considering the fact that the Indian entity had made TDS on payments made and are reflected in 26AS and the assessee has not submitted receipts in relation to payments made? ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 2 of 7 3. Whether on the facts and circumstances of the case and in law, the CIT(A)-12, erred in not considering the fact that the payments received by the assessee company for Management Service Fees are not taxable as Royalty without considering that the processes were triggered from India, thereby making the source of such income accrue/arise out of India, for the assessee to earn the income and the payments were made by the deductor by collecting it from the ultimate prayer i.e., the end consumer in India for services rendered? 2. At the outset, the ld. A.R. of the assessee brought to our knowledge of the CBDT Circular No.09/2024 dated 17.9.2024 and vehemently submitted that as the tax effect in the present appeal is less than Rs.60,00,000/- accordingly the revenue appeal is not maintainable & liable to be dismissed. 3. The ld. D.R. on the other hand, submitted that at the time of filing the appeal on 27/08/2024, the monetary limit was only Rs.50 lakhs in terms of Circular No. 5/2024 dated 15/03/2024 but subsequently on 17/09/2024, the CBDT vide another circular has increased the limit to Rs. 60 lakhs by way of amendment to the Circular 5 of 2024. Further he admitted the fact that the tax effect in the present appeal is only Rs.56,18,477/- 4. We have heard the rival submissions and perused the materials available on record. Before proceeding further it is appropriate to take note of the Section 268A of the Act for the purpose of this case which read as under- [Filing of appeal or application for reference by income-tax authority. 268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter. ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 3 of 7 (2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of -- (a) the same assessee for any other assessment year; or (b) any other assessee for the same or any other assessment year. (3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case. (4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub- section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.] Further, recently the CBDT issued circular U/s 268A of the Act for filing appeals by the department before the ITAT, High Courts & SLPs/appeals before Supreme Court vide circular No. 5/2024 dated 15/03/2024 in supersession of Circular No. 3/2018 dated 11/07/2018, Circular No.17/2019 dated 08.08.2019 & Board’s letter in F.No.279/Misc.142/2007-ITJ(Pt) dated 20/08/2018. It is not in dispute that the Board’s orders/instructions/directions issued to the Income Tax authorities are binding on them. Therefore in our view the revenue ought to have withdrawn the Appeal as directed after the circular No.09/2024 dated 17/09/2024 came into ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 4 of 7 force especially when their case does not falls under the exceptions as enumerated in the circular No.05/2024 dated 15/03/2024. Further we have also gone through the recent CBDT Circular No.9/2024 dated 17.9.2024, which is an amendment to Circular No. 5 of 2024 dated 15/03/2024, reproduced below for ease of reference & convenience :- ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 5 of 7 4.1 On going through the above circular, we noted that as a step towards management of litigation, it has been decided by the Board to revise the monetary limits for filing appeals in Income tax cases before the Income Tax Appellate Tribunal to Rs.60 lakhs instead of existing Rs.50 lakhs. Further in paragraph-5 of the above Circular we find that, the modifications shall come into effect from the date of issuance of the Circular i.e. on & from & w.e.f. 17/09/2024. Further, it is stated that this Circular will apply to SLP/Appeals to be filed henceforth in SC/HCs/Tribunal. Further, it is also stated that it shall also apply to the SLP/Appeals pending before Supreme Court/High Court/Tribunal, which may accordingly be withdrawn. ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 6 of 7 4.2 On going through the present appeal of the revenue, we take a note of the fact that total tax effect is Rs.56,18,477/-, which is way below the monetary limit specified under the Board’s above circular dated 17/09/2024. Further, on going through the circular we also take a note that the said circular shall also apply to the SLPs/appeals pending before Supreme Court/ High Courts/ Tribunals which may accordingly be withdrawn. The Revenue also could not point out any exceptional circumstances where the decision to appeal/file SLP shall be taken on merits without regard to the tax effect and the monetary limit. Similarly, we are also of the opinion that the Hon’ble Delhi High Court in the case of CIT Vs. Delhi Race Club Ltd. in ITA No.128/2008 order dated 3.3.2011 by following the earlier order dated 2.8.2010 in ITA No.179/1991 in the case of CIT Delhi-III Vs. M/s. P.S. Jain & Co. held that such circular would also be applicable to pending cases. 4.3 From the ratio laid down by the Hon’ble Delhi High Court, it is clear that orders/instructions/directions issued by CBDT by way of circular are applicable for pending cases also. Therefore, keeping in view the ratio laid down in the aforesaid referred to cases, we are of the considered view that the Circular No.9/2024 dated 17.9.2024, issued by the CBDT are also applicable for the pending cases and in the said circular monetary tax limit for not filing the appeal before the income tax appellate tribunal is Rs.60 lakhs whereas in the present appeal the tax effect as stated by the ld. DR is Rs.56,18,477/- only. Further, it is also affirmed in the circular that it shall also apply to the SLP/Appeals pending before Supreme Court/High Court/Tribunal, which may accordingly be withdrawn. ITA No.1651/Bang/2024 Andrew Telecommunication Systems (Singapore) Pte. Ltd., Singapore Page 7 of 7 In view of the above, without going into the merit of the case, we dismiss the appeal filed by the revenue as not maintainable. 5. In the result, appeal of the revenue stands dismissed. Order pronounced in the open court on 25th Nov, 2024 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 25th Nov, 2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "