ITAT Bangalore Dismisses Revenue's Appeal: Administrative Burden Cannot Justify Delayed Filing

Case Overview

Case: DCIT Vs Alten Global Technologies (ITAT Bangalore)
Assessment Year: 2020-21
**Appeal No.😗* ITA 2673/Bangalore/2025
Order Date: 07th April, 2026

The Income Tax Appellate Tribunal, Bangalore Bench, recently passed a significant order dismissing an appeal preferred by the Deputy Commissioner of Income Tax, Circle-1(1)(1), Bengaluru, against M/s. Alten Global Technologies Private Limited for Assessment Year 2020-21. The dismissal was not on merits but on a threshold issue — the Revenue's failure to satisfactorily explain the inordinate delay in filing the appeal before the Tribunal. The order serves as a firm reminder that tax authorities, like assessees, are equally bound by procedural discipline and limitation requirements.

Background of the Case

The Assessment and Appellate History

The Assessing Officer had passed an assessment order against the assessee, M/s. Alten Global Technologies Private Limited, making several disallowances under Section 40(a)(i) of the Income Tax Act, 1961. These disallowances pertained to payments made to various foreign entities, where the Revenue's position was that such payments attracted tax deduction at source obligations under Section 195 of the Act.

The assessee challenged the assessment order before the Commissioner of Income Tax (Appeals), who, vide order dated 02.07.2025, ruled in favour of the assessee and deleted the disallowances. Aggrieved by this outcome, the Revenue filed an appeal before the ITAT Bangalore, which was registered as ITA 2673/Bangalore/2025.

Substantive Grounds Raised by the Revenue

Before the delay issue overtook the proceedings entirely, it is worth examining what the Revenue had sought to challenge before the Tribunal. The grounds of appeal raised by the Assessing Officer touched upon several important questions of international taxation and TDS applicability.

Ground 1: Payments to Accord North America LLC, USA

Whether the CIT(A) erred in deleting the disallowance under Section 40(a)(i) concerning payments made to Accord North America LLC, USA, by incorrectly classifying the services as managerial rather than taxable as FTS/FIS under Section 9(1)(vii) or Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA), without duly considering that the services were technical or consultancy in nature and taxable in India, thereby necessitating TDS under Section 195.

The Revenue contended that the CIT(A) erred in treating these payments as managerial in nature, thereby exempting them from TDS obligations. The Revenue's stand was that the services rendered by the US entity constituted Fees for Technical Services (FTS) or Fees for Included Services (FIS) as defined under Section 9(1)(vii) of the Income Tax Act, 1961, read with Article 12 of the India-USA DTAA, making tax deduction mandatory under Section 195.

Ground 2: Exhibition and Stall Charges to Farnborough International Ltd., UK

Whether the CIT(A) erred in deleting the disallowance of payments made to Farnborough International Ltd., UK, by concluding, incorrectly, that exhibition/stall charges do not constitute consultancy or managerial services, while disregarding the applicability of Section 9(1)(vii) and the resulting TDS obligation.