KORN FERRY (US),CALIFORNIA V. ACIT,CIRCLE-2(1)(2),INT.TAX, DELHI

SA 103/DEL/2025

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The case involves Korn Ferry (US), which filed a stay application against the Assistant Commissioner of Income Tax concerning an outstanding tax demand for the assessment year 2022-23. The demand arose from transfer pricing adjustments on four issues: Service fees, Reimbursement of Subscription Charges, Reimbursement of Business Referral Expenses, and Digital Product License Fees. The assessee argued that two of these issues were favorably resolved in previous years and that the rectification application pending under section 154 of the Income Tax Act could significantly reduce the outstanding demand. The Department of Revenue opposed the stay, suggesting a 20% deposit of the outstanding demand. However, the Tribunal noted the non-compliance of the Assessing Officer with its previous directions and the potential for a refund based on the current adjustments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312735 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2022-2023
• Other Referred Cases: Assessee's own case for AY 2020-21 and 2021-22
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAJNA PARAMITA
• Keywords: Transfer pricing; Application of stay
• Section: 154; 2

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “डी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं मनीष अŤवाल, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER SA No. 103/Del/2025 (Arising out of ITA No.1184/Del/2025, A.Y 2022-23) Korn Ferry (US), 1900 Avenue of the Stars, Suite 1500, Los Angeles, California, United States PAN: AAFCK-6169-C ...... आवेदक/Applicant बनाम Vs. Assistant Commissioner of Income Tax, Circle 2(1)(2), International Tax, E-2 Block, Civic Centre, Minto Road, New Delhi ..... ᮧितवादी/Respondent आवेदक/Applicant : S/Shri Rohan Khare, Ashish Sarda & Pulkit Pandey, Advocates ŮितवादीȪारा/Respondent by : Ms. Prajna Paramita, CIT- DR सुनवाई कᳱ ितिथ/ Date of hearing : 29/04/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : 29/04/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This application has been filed by the assessee seeking stay on recovery of outstanding demand for assessment year 2022-23. 2. The ld. Counsel for the assessee submits that the assessee’s application for rectification u/s. 154 of the Act dated 13.01.2025 is still pending for final disposal at the end of Assessing Officer (AO) despite specific directions from the Tribunal vide interim 2 SA No.103/DEL/2025 order dated 07.03.2025. He further submitted that in impugned assessment year Transfer Pricing adjustment was made on four issues i.e. Service fees, Reimbursement of Subscription Charges, Reimbursement of business referral expenses & Digital Product License Fees. 3. The tax demand as per assessment order after adjustment on TP issues is Rs.1,54,72,451/-. He further contended that if assessee application for rectification is accepted the outstanding demand would be reduced to Rs.40,45,860/-. He further contended that out of four above said issues, two issues are squarely covered in favour of the assessee i.e. Service Fees and Reimbursement of Subscription Charges, by the order of Tribunal in assessee’s own case for AY 2020-21 and 2021-22. The outstanding demand in the case of the remaining two issues i.e. Reimbursement of Business Travel Expenses and Digital Product License Fees, after adjustment against advance taxes paid the assessee would be entitle to refund of Rs.59,86,345/-. He thus, prayed for stay on recovery of outstanding demand for the impugned assessment year without further deposit of any taxes. 4. Per contra, ld. DR vehemently opposed the Stay Application and prayed for direction to the assessee for deposit of 20% of outstanding demand in the impugned assessment year. 5. Both sides heard. It is an undisputed fact that the assessee application for rectification u/s. 154 of the Act is still pending before the AO, despite specific directions from the Tribunal to decide the same within 45 days from the date of receipt of Tribunal order dated 07.03.2025. The AO has not bothered to comply with directions of the Tribunal. The ld. DR as endorsed the statement made by ld. Counsel that out of four issues, two issues have been considered by the Tribunal in assessee’s own case in AY 3 SA No.103/DEL/2025 2020-21 and 2021-22. In so far as tax demand arising from adjustment on account of Reimbursement of Business Travel Expenditure and Digital Product License Fees the contention of ld. Counsel for assessee is that after adjustment of advance taxes, the assessee would be entitle for refund. The Revenue has not controverted the statement made at bar by the Counsel for the assessee. Thus, prima facie we are of considered view that assessee deserves the benefit of stay. The outstanding demand for impugned assessment year is stayed for a period of 180 days from the date of this order or till the disposal of appeal, whichever is earlier. 6. This Stay Application was listed alongwith appeal today. The ld. Counsel for the assessee pointed that necessary paper books have already been filed. 7. The Stay Application of the assessee is allowed. Order pronounced in the open court on Tuesday the 29th day of April, 2025. Sd/- Sd/- (MANISH AGARWAL) (VIKAS AWASTHY) लेखाकार सद˟/ACCOUNTANT MEMBER Ɋाियक सद˟/JUDICIAL MEMBER िदʟी / Delhi, ᳰदनांक/Dated 06/05/2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. 4 SA No.103/DEL/2025 BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "