The Punjab and Haryana High Court has held that the circular issued by the Central Board Of Direct Taxes (CBDT) prescribing monetary limits to file appeal/SLP is not applicable on international tax appeal involving the provisions of Double Taxation Avoidance Treaty (DTAA).
The bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has observed that the monetary limits prescribed in Circular No. 5/2024 shall not be applicable on in respect of litigation arising out of disputes related to TDS/TCS matters in both domestic and International taxation charges where dispute relates to the determination of the nature of transaction such that the liability to deduct TDS/TCS thereon or otherwise is under question. The circular shall also not be applicable on appeals of International taxation charges where the dispute relates to the applicability of the provisions of a Double Taxation Avoidance Agreement.
Background
The department has argued that the case does not fall within the ambit of Circular bearing No.9/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes on the basis of monetary limit, as the same falls in exception as per para 3.1 of Circular No.5/2024 dated 15.03.2024.
Clause l(ii) of para 3.1 of Circular No.5/2024 to submit that the issue involved in the present case relates to Double Taxation Avoidance Agreement and would therefore fall in the exceptions.
Upon a pointed query raised by the Court regarding issue having been
finally adjudicated by the Supreme Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr, it has been submitted by learned counsel that the review petition has been filed with regard to the judgement.
Conclusion – Monetary Limits To File Appeal
The court while dismissing the departmnet’s appeal held that the case does not falling within exception to clause l(ii) of para 3.1 which is only with respect to litigation arising out of disputes related to TDS/TCS matters in both domestic and international taxation charges, wherein disputes relating to appeals of international taxation charges with the applicability of provisions of Double Taxation Avoidance Agreement would fall.
Read More: CBDT Issues Revised Guidelines For Compounding of Offences Under Income Tax Act, 1961
Case Details
Case Title: Commissioner Of Income Tax (International Taxation) Versus Perfetti Van Melle Ict B.V.
Case No.: ITA-40-2023 (O&M)
Date: 14.10.2024
Counsel For Appellant: Urvashi Dhugga
Counsel For Respondent: Deepak Chopra
