HT GLOBAL IT SOLUTIONS HOLDINGS LIMITED vs. COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION-2, DELHI & ORS.

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W.P.(C)/12438/2024HC DelhiDLHC01057862202420 November 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA6 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court, in view of the consensus between the parties, disposed of the petition without delving into the validity or legality of the impugned order. The Court granted the petitioner an opportunity to contest the issue of transfer of jurisdiction to Mumbai. The petitioner was directed to file its representation regarding the transfer within two weeks from the date of the order. The concerned officer was directed to afford the petitioner an opportunity of being heard and pass an appropriate order expeditiously, preferably within four weeks thereafter. It was clarified that the period from January 9, 2024, to the date of the fresh order under Section 127 would be excluded for the purpose of limitation for all purposes. This order was passed with the consent of the parties.

What were the facts?

The petitioner, HT Global IT Solutions Holdings Limited, filed a writ petition before the Delhi High Court challenging an order dated January 9, 2024, passed by the Commissioner of Income Tax (Respondent No. 1) under Section 127 of the Income Tax Act, 1961. This order transferred the petitioner's case. The petitioner also challenged a subsequent communication dated June 25, 2024, issued by Respondent No. 2 and consequential actions. The primary grievance was that the impugned order was passed in violation of the principles of natural justice. The Revenue contended that the petitioner had obtained its Permanent Account Number (PAN) incorrectly without disclosing its Mumbai-based investment, and thus, the Mumbai Commissionerate should have jurisdiction. The Revenue also raised concerns about limitation periods if the court interfered at that stage.

What were the issues?

1. Whether the impugned order dated January 9, 2024, passed by Respondent No. 1 under Section 127 of the Income Tax Act, 1961, is vitiated for violation of the principles of natural justice? Assessee's Contention: The petitioner argued that the impugned order was passed in violation of the principles of natural justice. During arguments, the petitioner's counsel stated that if granted an opportunity to be heard, the petitioner would not raise the ground of limitation, irrespective of any delay. Revenue's Contention: The Revenue contended that the petitioner obtained its PAN incorrectly without disclosing its Mumbai investment, implying the Mumbai Commissionerate has jurisdiction. The Revenue also submitted that interference by the court at this stage could lead to further proceedings being barred by limitation. The Revenue agreed to the petitioner being heard, provided the period from the date of the impugned order (January 9, 2024) to the date of the fresh order is excluded from the limitation period.

Which sections of the Income-tax Act were involved?

Section 127,Section 153

AI-generated summary — verify with the full judgment below

W.P.(C) 12438/2024 Page 1 of 6

$~70 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 12438/2024 & CM APPL. 51748/2024

HT GLOBAL IT SOLUTIONS HOLDINGS LIMITED .....Petitioner Through: Mr Percy Pardiwala, Sr Advocate with Mr Harsh Kapadia, and Mr Prakash Kumar, Advocates.

versus

COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION-2, DELHI & ORS. .....Respondents Through: Mr N Vankatraman, ASG, Mr Ruchir Bhatia, SSC, Mr Anant Mann, JSC and Mr Abhishek Anand, Advocate.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

20.11.2024 1. The petitioner has filed the present petition, inter alia, praying as under:- “i. issue a writ in the nature of Certiorari or any other order or appropriate direction to quash and set aside: (a)the impugned order dated 09.01.2024 passed by Respondent No.1 under section 127 of the Income Tax Act, 1961; (b) the impugned communication dated 25.06.2024 issued by Respondent No. 2; and (c) the consequential notices / communications/ actions sent/undertaken pursuant to the impugned order dated This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

W.P.(C) 12438/2024 Page 2 of 6

09.01.2024 under section 127 of the Income Tax Act, 1961 by Respondent No. 2 and/or any other Revenue authority. ii. Issue a writ in the nature of mandamus or any other order or appropriate direction to Respondent No. 1 and / or Respondent No. 2: (a) to forthwith withdraw and/or cancel the impugned order dated 09.01.2024 passed by Respondent No. 1 under section 127 of the Income Tax Act, 1961; (b) to forthwith withdraw and/or cancel the impugned communication dated 25.06.2024 issued by Respondent No. 2; (c) to forthwith withdraw and/ or cancel the consequential notices / communications/ actions sent/ undertaken pursuant to the impugned order dated 09.01.2024 under section 127 of the Income Tax Act, 1961 by Respondent No. 2 and/or any other Revenue authority; and (d) to forthwith forbear from taking any steps whatsoever pursuant to or in implementation of the transfer order dated 09.01.2024. iii. Issue a writ of prohibition or a writ in the nature of prohibition, prohibiting Respondents from taking any steps or coercive action pursuant to the impugned transfer order dated 09.01.2024. iv. Pending the hearing and final disposal of the present petition, this Hon'ble Court may be pleased to stay the operation of: (a) the impugned order dated 09.01.2024 passed by Respondent No. 1 under section 127 of the Income Tax Act, 1961; This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

W.P.(C) 12438/2024 Page 3 of 6

(b) the impugned communication dated 25.06.2024 issued by Respondent No. 2; and (c) the consequential assessment proceedings undertaken by Respondent No. 2 pursuant to the impugned order dated 09.01.2024 passed under section 127 of the Income Tax Act, 1961. v. To issue order(s), direction(s), writ(s), or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice; and vi. To award Costs of and incidental to this petition be paid by the Respondents.”

2.

Apart from other grounds, the petitioner claims that the impugned order dated 09.01.2024 (hereafter the impugned order) is vitiated as it has been passed in violation of the principles of natural justice. 3. Mr. Venkatraman, the learned Additional Solicitor General (ASG) countered the said submission. He submits that the petitioner has obtained the Permanent Account Number (PAN) incorrectly, without disclosing the company in which it has invested the funds is in Mumbai. The petitioner should have obtained the PAN from the Mumbai Commissionerate. He also submits that had the petitioner proceeded in accordance with law, the Income tax Authorities of the Mumbai Commissionerate would have the jurisdiction to complete the assessment proceedings under the Income Tax Act, 1961 (hereafter the Act). 4. It is also pointed out that in the event this court interferes with the impugned order at this stage, further proceedings may be barred by This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

W.P.(C) 12438/2024 Page 4 of 6

limitation. 5. Mr. Pardiwala, the learned senior counsel for the petitioner submitted, during the course of his arguments, that if the petitioner is granted an opportunity to be heard, the petitioner would not raise the ground of limitation irrespective of any delay so occasioned. 6. Mr. Venkatraman, the learned ASG was agreeable to the same, subject to the condition that the period from the date of the impugned order (that is, 09.01.2024) and the date on which the order is passed pursuant to hearing, which may be afforded to the petitioner, be completely excluded from the period of the limitation. 7. Mr Pardiwala was also agreeable to the same. Therefore, on 05.11.2024, this court considered it apposite to grant the petitioner the time for filing an affidavit to the said effect. The affidavit has since been filed wherein it has been, inter alia, affirmed as under:- “4. As mentioned during the course of the hearing, the Petitioner hereby states that if the Order is set aside and an opportunity of being heard is provided to the Petitioner before transferring the case to any jurisdiction in accordance with the provisions of section 127 of the Act, it will not challenge the validity of the on-going assessment proceeding for the Assessment Year 2022-23 on the ground that such proceeding is barred by limitation provided under section 153 of the Act solely on the ground of Respondent No.2 exercising jurisdiction pursuant to the Order which is declared as being unlawful and bad in law for not following the mandate of the section 127 of the Act.” This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

W.P.(C) 12438/2024 Page 5 of 6

8.

Mr. Vankatraman has some apprehension regarding the last sentence of paragraph no. 4 of the affidavit. In view of the consensus between the parties, this court had suggested that a consent order be passed without going into the dispute raised in this petition. The learned ASG had consented that the petitioner may be granted an opportunity to contest the issue of transfer of the jurisdiction to Mumbai, without the impugned order being declared as illegal or contrary to law. However, the last sentence of paragraph no.4 of the affidavit appears to be in variance with the aforesaid suggestion. 9. Undisputedly, a consensus between the parties on the lines as suggested by counsel, would obviate the requirement of examining the validity or legality of the impugned order in the present petition. 10. Mr Pardiwala, states on instructions, that the last line of paragraph no.4 be read as omitted. He submits that there is no ambiguity in the suggestion made during the course of the proceedings and the petitioner is agreeable to the said course. 11. Thus, without going into the question of validity of the impugned order, this court consider it apposite to dispose of the above captioned petition by granting the petitioner another opportunity to contest the issue of transfer of the jurisdiction to Mumbai. 12. The petitioner would file its representation regarding the transfer of the jurisdiction to Mumbai within the period of two weeks from date. The concerned officer shall after affording an opportunity to the petitioner of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

W.P.(C) 12438/2024 Page 6 of 6

being heard, pass an appropriate order, as expeditiously as possible and preferably within the period of four weeks thereafter. 13. It is clarified that the period from the date of the impugned order, that is, 09.01.2024 and the date on which the concerned officer passes the fresh order under Section 127 of the Act, would be excluded for the purpose of limitation for all purposes. 14. This order is passed with the consent of the parties. 15. The petition is disposed of in the aforesaid terms. Pending application also stands disposed of.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J NOVEMBER 20, 2024 M

Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 12:00:43

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