Non-disposal of Appeal due to Pandemic: ITAT further extends Stay Order for Dell International till September [Read Order]

Non-disposal of Appeal due to Pandemic: ITAT further extends Stay Order for Dell International till September [Read Order]

ITAT - Dell International - Taxscan

In a major relief to Dell International Services India Private Limited, the Income Tax Appellate Tribunal (ITAT), Bangalore Bench allowed a further extension of stay to the Company since the appeal filed was not disposed due to the COVID-19 pandemic.

Earlier, the Tribunal granted a stay order in August last year where the proceedings to recover the tax dues were freezed for six months.

The dispute is related to the benefit of deduction under Section 10A of Income Tax Act for amounts settled under Indo-U.S.A. Mutual Agreement Procedure (MAP). The Assessee, M/s. Dell International Services India Private Limited was rendering Software Development Services (SWD) as well as Information Technology Enabled Services (ITES) to its AE. As far as international transaction of rendering ITES services is concerned, the assessee received a consideration of Rs.629,43,81,078 towards call centre services and Rs.149,59,17,786 towards back-office support services. Both the aforesaid services were classified as ITES. As regards the ITES segment, the TPO found that there was a shortfall in the price received by the assessee from AE and the shortfall was added to the total income of the assessee as an adjustment under Section 92 of the Act. Against the aforesaid addition, the assessee preferred an appeal before the CIT(Appeals).

Before the Tribunal, the assessee contended that the Tribunal on various dates on six occasions from 23.3.2020 to 23.3.2021 and adjourned due to virtual hearing due to COVID-19 pandemic and posting of appeals in physical hearing due to voluminous paperbook and technical glitches and the delay in non-disposal of the appeals is not attributable to the assessee.

The division bench including Judicial Member Beena Pillai and Accountant Member Chandra Poojari allowed the above contentions and observed that the appeals were listed for hearing and adjourned and the delay for non-disposal of the appeals is not attributable to the assessee.

“Considering the overall facts and circumstances of the case and following the decision rendered by Hon’ble Delhi High Court in the case of Pepsi Foods Pvt. Ltd. 376 ITR 87 (Delhi) which was confirmed by the Hon’ble Supreme Court in [2021] 126 taxmann.com 69 (SC) and the decision rendered by the coordinate bench in the case of SAP Labs (I) Pvt. Ltd. 67 Taxmann.com 78, we grant extension of stay in all these cases for a period upto 30th September, 2021, or till the disposal of the appeals, whichever is earlier. The assessee shall not seek adjournment of the appeals and cooperate in disposal of the appeals,” the Tribunal said.

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