AFFLE ( INDIA ) LIMITED vs. ADDITIONAL COMMISSIONER OF INCOME TAX TRANSFER PRICING 1(1) MUMBAI AND ORS

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WP/6599/2024HC BombayHCBM01022067202407 April 2025Bench: HON'BLE SHRI JUSTICE M.S. SONAK,HON'BLE SHRI JUSTICE JITENDRA SHANTILAL JAIN3 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court held that it would not be appropriate to entertain the Writ Petition when a statutory appeal against the impugned order dated 10.10.2023 was already pending. The Court reasoned that all contentions raised by the Petitioner, including the issue of non-compliance with the principles of natural justice, could be effectively considered and decided in the pending Appeal. Accordingly, the High Court disposed of the Writ Petition with liberty to the Petitioner to pursue the pending Appeal. The Appeal was directed to be disposed of expeditiously by 14.08.2025. The interim order that had restrained the Respondents from enforcing the impugned order was continued until the disposal of the Appeal. All contentions of all parties were explicitly left open for consideration in the Appeal.

What were the facts?

The Petitioner, Affle (India) Limited, filed a Writ Petition before the Bombay High Court challenging an Order dated 10.10.2023 passed under Section 271(G) of the Income-tax Act, 1961, by the Additional Commissioner of Income Tax, Transfer Pricing 1(1), Mumbai. The Petitioner contended that the penalty order was passed before the conclusion of assessment proceedings and that inadequate opportunity was granted to reply to the show cause notice. The Revenue pointed out that an Appeal against the impugned order was already pending before the appellate authority. The High Court noted that all contentions, including the violation of natural justice, could be considered in the pending Appeal.

What were the issues?

1. Whether the High Court should entertain a Writ Petition challenging an order when a statutory appeal against that order is already pending before the appellate authority, and if so, under what circumstances? 2. Whether the Petitioner was denied principles of natural justice in the penalty proceedings leading to the order dated 10.10.2023? Assessee's Contentions: The Petitioner argued that the penalty order under Section 271(G) was premature, having been passed before the assessment proceedings concluded. Furthermore, it was contended that the Petitioner was not afforded adequate opportunity to respond to the show cause notice concerning the penalty. The Petitioner relied on the principle of natural justice. Revenue's Contentions: The Revenue pointed out that a statutory appeal against the impugned order dated 10.10.2023 was already instituted and pending before the appellate authority. The Revenue submitted that it would not be appropriate for the High Court to entertain the Writ Petition in such circumstances.

Which sections of the Income-tax Act were involved?

Section 271(G)

AI-generated summary — verify with the full judgment below

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WP 6599-2024.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 6599 OF 2024 Affle (India) Limited .Petitioner Vs. The Additional Commissioner of Income Tax, .Respondents Transfer Pricing 1(1), Mumbai & ors. Mr. Atul K. Jasani, Advocate, for the Petitioner Mr. Akhileshwar Sharma, Advocate, for the Respondents CORAM : M. S. SONAK & JITENDRA JAIN, JJ.

DATE : 07.04.2025 P. C. 1. Heard learned Counsel for the parties. 2. This Petition challenges the Order dated 10.10.2023 under Section 271(G) of the Income-tax Act, 1961. 3. The Petitioner has admittedly instituted an Appeal against the Order dated 10.10.2023 and the same is pending. 4. Mr. Sharma, learned Counsel for the Revenue pointed this out to us and also referred the statement in paragraph 6 of the Affidavit filed on behalf of the Respondents. Since the Petitioner Anand 1 of 3

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WP 6599-2024.doc had raised the issue of non-compliance with principles of natural justice, initially, by Order dated 07.05.2024, notices were issued to the Respondents and until the next date, interim order was granted restraining the Respondents from enforcing the impugned order dated 10.10.2023. 5. Now replies have been filed on behalf of the Respondents. It is pointed out that an Appeal is also pending against the Order dated 10.10.2023. Accordingly, it would not be appropriate for this Court to entertain this Petition. Instead, all contentions raised, including the contention of violation of natural justice can always be considered in the pending Appeal. 6. The Appeal against the impugned Order dated 10.10.2023 is directed to be disposed of as expeditiously as possible and in any event by 14.08.2025. 7. All contentions of all parties are left open, including the contentions raised in this petition. 8. In the peculiar facts of this case, since one of the allegations was about breach of natural justice, the interim order granted by us will now operate until the disposal of the Appeal. 9. Mr. Jasani pointed out that it was a case where the impugned penalty order was made even before the conclusion of Anand 2 of 3

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WP 6599-2024.doc the assessment proceedings and in any event, inadequate opportunity was granted to the Petitioner to reply to the Show Cause Notice concerning the penalty proceedings. 10. The Petition is accordingly disposed of with liberty to the Petitioner to pursue the pending Appeal against the impugned Order dated 10.10.2023. The Appeal is ordered to be expeditiously disposed of by 14.08.2025. The interim order to operate until the disposal of the Appeal. 11. All contentions of all parties are explicitly left open. 12. The Petition is disposed of in the above terms without any costs order. 13. The parties to inform the Commissioner (Appeals) of this order so that the same is duly complied with.

(JITENDRA JAIN, J.) (M. S. SONAK, J.) Anand 3 of 3

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