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2021 (2) TMI 1322 - AT - Income TaxTP Adjustment - Re-characterization of the assessee as a high-end information technology enabled service (ITES)/knowledge process outsourcing (KPO) service provider - TPO has re-characterized the assessee as a KPO service provider - HELD THAT:- Assessee has drew our attention to the Safe Harbour Rules, 2017 issued by the Central Board of Direct Taxes (CBDT) ON 07-06-2017, wherein, various services have been classified under ITeS and KPO categories. As contention of assessee, the services provided by the assessee are coming under the ITeS category even under the Safe Harbour Rules, 2017 of the CBDT, all the aspects have not at all been examined either by the TPO or by learned DRP while re-characterising the assessee as a high-end ITeS/KPO service provider. We restore the issue to the AO for considering assessee’s claim that it is a low end ITeS service provider and not a KPO service provider. While doing so, the Assessing Officer must verify all the documentary evidences furnished by the assessee to demonstrate the exact nature of services provided to the AEs. Further, the Assessing Officer will also examine assessee’s claim that there is no change in the nature of service provided in earlier years, wherein, it has been accepted as a low end ITeS provider. Needless to mention, the Assessing Officer must provide reasonable opportunity of being heard to the assessee before deciding the issue. Assessee’s appeal is partly allowed for statistical purpose.
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