M/S. SPRINKLR INDIA PRIVATE LIMITED,BENGALURU V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1)(1), BENGALURU

SA 37/BANG/2024

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Sprinklr India Private Limited filed a stay application under section 253(7) of the Income Tax Act, 1961, seeking to stay a disputed demand of Rs.8,40,48,110 arising from an assessment order for the assessment year 2020-21. The demand was based on a transfer pricing adjustment concerning software development services provided to an Associated Enterprise. The assessee had already deposited 20% of the demand and had filed an APA application covering the rollback period that includes the assessment year in question. The Tribunal considered the payment made and the pending APA application, which could potentially affect the assessment for the year 2020-21, and decided to stay the remaining demand for 180 days or until the appeal's disposal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470106 (ITAT-BANGALORE)
• Appeal Type: Stay Application
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARITHIVEL V.
• Assessee Lawyers: TATA KRISHNA
• Keywords: Opportunity of being heard; Transfer pricing; Application of stay
• Section: 143(3); 6; 10; 2

Judgement Text

"SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER SP No.37/Bang/2024 (Arising out of IT(TP)A No.1384/Bang/2024 Assessment Year: 2020-21 M/s. Sprinklr India Private Limited 3rd Floor, East Wing Building No.3 Block B Divyashree 770 Town Centre Off HAL Airport Road Yamlur PO Bangalore 560 037 Karnataka PAN NO : AAQCS9370N Vs. ACIT Circle-6(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri Tata Krishna, A.R. Respondent by : Sri Parithivel V., D.R. Date of Hearing : 28.03.2025 Date of Pronouncement : 28.03.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This stay application u/s 253(7) of the Income Tax Act,1961 (in short “The Act”) filed by the assessee seeking stay of disputed demand of Rs.8,40,48,110/- (vide notice of demand u/s 156 of the Act dated 24.5.2024 placed in page no.23 of the stay application bunch) arising out of the assessment order passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Act dated 24.5.2024. The assessee has stated the following reasons in its application for seeking stay- SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 2 of 10 SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 3 of 10 SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 4 of 10 SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 5 of 10 SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 6 of 10 SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 7 of 10 2. At the outset, the ld. Counsel for the assessee drew our attention on a letter dated 24.2.2025 issued by DC/ACIT, Circle- 6(1)(1), Bangalore requesting to pay the outstanding demand otherwise the necessary coercive action will be taken by way of the attachment of bank accounts u/s 226(3) of the Act, which are reproduced below for ease of reference and convenience: SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 8 of 10 2.1 Further, the ld. A.R. of the assessee submitted that after receiving the above letter, the assessee on very next day i.e. on 25.2.2025 had voluntarily deposited 20% of the total outstanding demand as raised for the AY 2020-21 amounting to Rs.1,68,09,622/- vide challan no.03517, which are reproduced below for ease of reference and convenience: 2.2. Further, on merits of the case, the ld. A.R. of the assessee vehemently submitted that for the impugned assessment SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 9 of 10 year 2020-21, the only addition made is TP adjustment in respect of provision of software development services by the assessee to its Associated Enterprise (“AE”). It is submitted that the assessee has filed an application for Advance Pricing Agreement (“APA”) in Form No.3CED and Form No.3CEDA on 15.6.2022. The ld. A.R. also submitted that so far as assessee is concerned, assessee has complied its procedure and the APA application made by the assessee covers the future period of 5 years from FYs 2023-24 to 2027-28 (AYs 2024-25 to 2028-29) and roll back period of 4 years of FYs 2019-20 to 2022-23 (AYs 2020-21 to 2023-24). Thus, it is submitted that the assessment year i.e. 2020-21 for which the impugned appeal is pending before this Tribunal falls within the roll back period of the APA application under Rule 10MA. Lastly, the ld. A.R. submitted that the outcome of the APA proceedings has a direct bearing on the impugned assessment year 2020-21 and prayed that the impugned demand may be stayed till the APA is finalized. 3. The ld. D.R. on the other hand had no serious objection in granting the stay as the assessee has already paid 20% of the outstanding demand amounting to Rs.1,68,09,622/-. 4. We have heard the rival submissions and perused the materials available on record. A perusal of the provisions of section 254(1) of the Act shows that the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. After analyzing the fact, considering the submissions made by the ld. A.R. & ld. D.R. and also the material placed on record, we cannot brush aside the fact that the assessee has already paid 20% of the outstanding demand amounting to Rs.1,68,09,622/- on 25.2.2025 vide challan no.03517. Further, we also take a note of the fact that the assessee has filed an application for Advance Pricing Agreement (APA) in form No.3CED SP No.37/Bang/2024 Sprinklr India Private Limited, Bangalore Page 10 of 10 and Form No.3CEDA on 15.6.2022 and it covers the future period of 5 years from AY 2024-25 to 2028-29 and roll back period of 4 years from the AY 2020-21 to 2023-24. Further, the assessment year 2020- 21 for which the impugned appeal is pending before this Tribunal falls within the roll back period of APA application under Rule 10MA. We are of the opinion that as rightly contended by the AR of the assessee, the outcome of the APA proceeding has a direct bearing on the impugned AY 2020-21. Being So, we are of the opinion that as the assessee has already paid 20% of the outstanding demand, the balance of the outstanding demand amounting to Rs. 6,72,38,488/- for the Asst. year 2020-21 are stayed for a period of 180 days from the date of issue of this order or till disposal of the appeal, whichever is earlier. The stay petition is disposed of as per the terms indicated above. 5. In the result, stay application filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 28th Mar, 2025 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 28th Mar, 2025. 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. "