M/s Wand Equity Portfolio II LP vs. The Deputy Commissioner of Income Tax - 2

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WP/45285/2018HC TelanganaHBHC01083539201809 September 2020Bench: M.S.RAMACHANDRA RAO,T.AMARNATH GOUD4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court permitted the petitioner to withdraw the Writ Petition. This decision was based on letters dated July 1, 2020, and August 13, 2020, issued by the Joint Commissioner of Income Tax (OSD), International Taxation-2, Hyderabad. The judgment does not explicitly state the content of these letters, but their issuance appears to have led to the petitioner's decision to withdraw. Consequently, the Writ Petition was dismissed as withdrawn. The court also noted that pending miscellaneous petitions would stand dismissed. No costs were awarded. The specific issues raised in the writ petition regarding the validity of the Section 148 notice and the situs of gains were not decided on merits due to the withdrawal.

What were the facts?

The petitioner, M/s Wand Equity Portfolio II LP, a US-based entity, filed a Writ Petition before the High Court of Telangana at Hyderabad. The petition challenged a Notice under Section 148 of the Income Tax Act, 1961, issued by the Deputy Commissioner of Income Tax for Assessment Year 2012-13. The notice was dated July 6, 2018. The petitioner sought to quash this notice, arguing it was illegal and unenforceable, and to restrain the respondents from taking any steps pursuant to it. During the pendency of the writ petition, additional material papers were filed, including a letter from SeedWorks Mauritius, a clarification letter from the respondent, a Form-S, and an order dated August 13, 2020, dropping reassessment proceedings against the petitioner.

What were the issues?

1. Whether the Notice under Section 148 of the Income Tax Act, 1961, issued for AY 2012-13 is valid, proper, and legal? (Question of law and fact, concerning Section 148 of the IT Act). Assessee's Contention: The assessee sought to declare the notice illegal and unenforceable and to quash it. The specific grounds for challenging the notice are not detailed in the provided text, but the prayer indicates a challenge to its validity. Revenue's Contention: The revenue issued the notice under Section 148, implying their belief that income had escaped assessment. Their arguments are not explicitly recorded in the judgment, but their action of issuing the notice suggests their stance. 2. Whether the gains from the transaction arise in the hands of the Petitioner? (Question of law and fact, concerning the taxability of gains). Assessee's Contention: The assessee sought to direct the respondents to eschew from taking into consideration the ruling to the extent it observes/finds that the gains from the transaction arise in the hands of the Petitioner. This implies the assessee disputed the situs of taxation. Revenue's Contention: The revenue's position, as implied by the issuance of the notice and the potential ruling mentioned, is that the gains are taxable in the hands of the petitioner.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY ,THE NINTH DAY OF SEPTEIMBER TWO THOUSAND AND IWENTY PRESENT THE HON'BLE SRI JUSTICE M.S. RAMACHANDRA RAO AND THE HON'BLE SRI JUSTICE T. AMARNATH GOUD WRIT PETITION NO: 45285 OF 2018 lvl/s Wand Equity Portfolio ll LP, 260 Crandon Bloulevard, 32 # 75, Key Biscayne, Florida - 33149, United States of America Through its Authorized Signatory, l\/r. Srinivas Reddy, Kumbham. Between: AND 1. 2. 3. ...PETITIONER The Deputy Commissioner of lncome Tax - 2, lnternational Taxation Aayakar Bhavan, Basheerbagh Hyderabad - 500 004. The Commissioner of lncome Tax, (lnternational Taxation and Transfer Pricing) Aayakar Bhavan, Basheerbagh Hyderabad - 500 004. The Union of lndia, through the Secretary, Ministry of Finance, Government of lndla, North Block, New Delhi '1 10 101. ...RES'ONDENTS Petition under Article 226 o'f lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Certiorari, or a writ in the nature of Certiorari, or any other appropriate writ, order or direction under Article 2261227 of the Constitution of lndia, calling for the records of the Petitioners case so far as they relate to the issue of the lmpugned Notice under section 148 for AY 2012-13 bearing reference no. F.No.DClT(lT)-2l14Bl 2018-19 dated 6th July 2018 and after going through and examining the question of the validity, propriety and legality thereof, be pleased to declare the same to be illegal and unenforceable, and, quash the same and directing the Respondents to eschew from taking into consideration the Ruling to the extent it observes / finds that the gains from the Transaction arise in the hands of the Petitioner. lA NO: 2 OF 2018 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to respondents be restained from taking any steps pursuant to the lmpugned Notice under section 148 fot AY 2012-13 bearing reference no. F.No. DCtT(lT)-2114812018-19 dated 6th July 2018.

il2il lA NO: 1 OF 2020 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the additional material papers (1) Letter filed by SeedWorks Mauritius with the Designated Authority, (2) Clarification Letter dated July 01 ,2020 issued by the Respondent No.1, (3) a copy of the Form-S issued by the Designated Authority/Respondent No.2, and (4) a copy of order dated August 13, 2020 dropping the reassessment proceedings against the Petitioner. Counsel for the Petitioner: SRI NISHANTH THAKUR ADVOCATE APPEARING FOR SRI. ROHIT POGULA Counsel for the Respondents: Ms. K. MAMATA, The Court made the following: ORDER

HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND HONOI-IRABLE SRI JUSTICE T.AMARNATH GOUD \,ry.RIT PETITION NO..I5285 OF 20l8 lPer Sri Justice M.S.Ramachqndra Rao) Heard Sri Nishanth Thakur, leamed counsel appearing for Sri Rohit Pogula, leamed counsel for the petitioner and Ms. K.Mamata, leamed counsel for the respondents. 2. Having regard to the letters dt.01.07.2020 and 13.08.2020 issued by the Joint Commissioner of Income Tax (OSD), International Taxation-2, Hyderabad, the learned counsel fol the petitioner seeks to withdraw this Writ Petition. 3. Therefore, the petitioner is permitted to withdraw this Writ Petition in view of the above referred letters. 4. The Writ Petition is accordingly dismissed as withdrawn. No costs. 5. Pending miscellaneous petitions, if any, in this Writ Petition shall also stand dismissed. /iTRUE COPY// To, 1. One CC to Sri Rohit Pogula Advocate IOPU-Q] i. 6;;6d i; N/; x. Mama-ta, Advocate [oPUc] 3. Two CD Copies CHR ORDER: SD/-B,SATYAVATHI ASSISTANT REG'STRAR secrtoMrrtcrn

HIGH COURT DATED:0910912020 ORDER W.P.No.45285 of 2018 DISMISSING THE WRIT PETITION AS WITHDRAWN WITHOUT COSTS 1trE ST4 16r ( e o zUC EP ,16 S o * i,ATC , I WDr .t1

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