In a recent case, 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 Revenue has strenuously 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.
Upon a pointed query raised by the Court regarding the issue having been finally adjudicated by the Supreme Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr., reported in (2022), it has been submitted by counsel that the review petition has been filed with regard to the said judgment.
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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.
The division 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.
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While dismissing the departmnet’s appeal , the court 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. Urvashi Dhugga appeared for the appellant and Deepak Chopra appeared for the respondent
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