M/S HUAWEI TELECOMMUNICATIONS (INDIA) COMPANY PVT. LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, DELHI & ANR.

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W.P.(C)/13543/2024HC DelhiDLHC01065025202403 December 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the directions for a special audit under Section 142(2A) of the Income Tax Act, 1961, were required to be set aside. The reasoning was that these directions were a consequence of the notice issued under Section 148 of the Act for reopening the assessment for AY 2012-13. As this Section 148 notice had already been set aside by the Court in a previous writ petition (W.P.(C) 15957/2023), the subsequent special audit directions were rendered unsustainable. The Court found that the special audit directions were based on an invalid foundation, and therefore, they must also be quashed. The operative direction was to set aside the impugned directions for the special audit.

What were the facts?

The petitioner, M/s Huawei Telecommunications (India) Company Pvt. Ltd., filed a writ petition before the Delhi High Court challenging directions for a special audit under Section 142(2A) of the Income Tax Act, 1961, for Assessment Year 2012-13. These directions were issued by the Assistant Commissioner of Income Tax, Central Circle-2, Delhi. The special audit was initiated pursuant to a notice under Section 148 of the Act, reopening the assessment for AY 2012-13. However, this Section 148 notice had previously been set aside by the same High Court in a separate writ petition (W.P.(C) 15957/2023). The petitioner sought quashing of the Section 142(2A) directions and the related notice dated 05.07.2024.

What were the issues?

1. Whether the directions for a special audit under Section 142(2A) of the Income Tax Act, 1961, are liable to be quashed when the underlying notice under Section 148 of the Act, which initiated the reopening of assessment, has already been set aside by the High Court. Assessee's Contention: The petitioner argued that since the Section 148 notice was quashed, the subsequent directions for a special audit, which were consequential to the reopening, are illegal, arbitrary, and without jurisdiction. They relied on the principle that a consequence cannot survive without its cause. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments. The revenue was represented by Mr. Indruj Rai, SSC.

Which sections of the Income-tax Act were involved?

Section 142(2A),Section 148

AI-generated summary — verify with the full judgment below

$~55 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13543/2024 & CM APPL. 56650/2024 (Stay) M/S HUAWEI TELECOMMUNICATIONS (INDIA) COMPANY PVT. LTD.

.....Petitioner

Through: Counsel (appearance not given)

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, DELHI & ANR.

.....Respondents

Through: Mr. Indruj Rai, SSC.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

03.12.2024 1. The petitioner has filed the present petition, inter-alia, praying as under: “(a) Issue a Writ of Certiori or any other appropriate Writ, order or direction of like nature, to call for the records and quash the Impugned Directions dated 13.09.2024(ANNEXURE-P1 at Pg Nos. 89-106), and the Impugned Notice dated 05.07.2024 (ANNEXURE-P2 at Pg. Nos. 107-117) issued under Section 142(2A) of the Act for AY 2012-13 issued by the Respondent No. 1, being illegal, arbitrary and without jurisdiction”

2.

The petitioner essentially impugns the directions issued by respondent no. 1 for conduct of a special audit under Section 142(2A) of the Income Tax Act, 1961 (hereafter the Act), in respect of the assessment year (AY) 2012-13. The assessment for the said assessment year was reopened 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 09/12/2024 at 13:04:00

pursuant to a notice dated 31.03.2023, issued under Section 148 of the Act. The said notice has since been set aside by an order passed by this Court in W.P.(C) 15957/2023. Consequently, the directions for conduct of special audit under Section 142(2A) of the Act are also required to be set aside. It is so directed. 3. The petition is disposed of in the aforesaid terms.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J DECEMBER 03, 2024/at

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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 09/12/2024 at 13:04:00

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