M/S NCELL AXIATA LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/25138/2022HC KarnatakaKAHC01057820202202 November 2023Bench: B M SHYAM PRASAD4 pages
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What did the High Court hold?

The Court held that the writ petition must stand disposed of by quashing the impugned assessment and penalty orders. However, the petitioner was granted liberty to seek revival of the petition, subject to the outcome of the Revenue's challenge before the Hon'ble Supreme Court against the Division Bench's order dated July 14, 2023, in ITA No. 160/2015 and other connected matters. This decision was made considering that certain other petitioners had urged specific grounds. The Court did not make observations on the merits of the petitioner's specific grounds regarding lack of opportunity or service of notices, deferring to the pending Supreme Court proceedings.

What were the facts?

The petitioner, M/s Ncell Axiata Limited, a foreign entity, filed a writ petition challenging a notice initiating reassessment proceedings for Assessment Year 2012-13, dated March 28, 2019, and a final assessment order passed under Section 143(3) read with Section 147 and Section 144C(3) of the Income Tax Act, 1961, dated November 23, 2021. The petitioner argued that it could not be subject to assessment if a Division Bench's order dated July 14, 2023, in ITA No. 160/2015, prevailed. The Revenue contended that this order was under challenge before the Supreme Court and therefore, the Court should not make observations on the merits of the petitioner's grounds regarding lack of opportunity or service of notices. The petitioner sought liberty to revive the petition if the Revenue's challenge to the Division Bench's order was successful.

What were the issues?

1. Whether the writ petition should be disposed of in light of the Division Bench's order dated July 14, 2023, in ITA No. 160/2015 and connected matters, and the disposal of similar writ petitions. (Question of law and fact, turning on the applicability of the Division Bench's order). Assessee's Contention: The petitioner argued that if the Division Bench's order dated July 14, 2023, prevails, it cannot be subject to assessment. The petitioner also sought liberty to revive the petition if the Revenue succeeded in its challenge to this order before the Supreme Court. Revenue's Contention: The Revenue submitted that the Division Bench's order dated July 14, 2023, has been challenged before the Supreme Court. Therefore, the Court should not make any observations on the merits of the petitioner's grounds concerning lack of opportunity or service of due notices.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 144C(3)

AI-generated summary — verify with the full judgment below

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NC: 2023:KHC:39006 WP No. 25138 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25138 OF 2022 (T-IT) BETWEEN:

M/S NCELL AXIATA LIMITED (FORMERLY KNOWN AS M/S NCELL PRIVATE LIMITED) OFFICE AT EKANTAKUNA LALIPUR METROPOLITAN CITY, WARD NO. 04 NEPAL,

REP BY ITS CHIEF FINANCIAL OFFICER (CFO) MR. ANUPAM BHAT, S/O SRI, MAKHAN LAL BHAT AGED BOUT 57 YEARS, OFFICE AT EKANTAKUNA LALIPUR METROPOLITAN CITY WARD NO. 04 NEPAL

…PETITIONER (BY SRI. KAMAL SAWHNEY, ADVOCATE FOR SRI.MOHAMMED SHAKEEB M MULLA.,ADVOCATE) AND:

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION CIRCLE 2(2) ROOM NO. 430 4TH FLOOR, BMTC BUILDING, 80 ft ROAD, 6th BLOCK, KORAMANGALA BENGALURU 560095

…RESPONDENT (BY SRI. DILIP M.,ADVOCATE)

Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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NC: 2023:KHC:39006 WP No. 25138 of 2022

THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED NOTICE ISSUED VIDE F. NO. 148/DCIT (IT)/C-2(1)/2018-19 DATED 28.03.2019 (ANNEXURE -A) ISSUED BY THE RESPONDENT INITIATING REASSESSMENT PROCEEDINGS IN THE CASE OF THE PETITIONER FOR AY 2012-13; QUASHING THE IMPUGNED FINAL ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 147 READ WITH SECTION 144C (3) OF INCOME ACT, 1961 DATED 23.11.2021 (ANNEXURE- B) PASSED BY THE RESPONDENT FOR BEING ILLEGAL AND WITHOUT JURISDICTIONAL.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The question for consideration in this writ petition would be whether it must stand disposed of in the light of the Division Bench’s order dated 14.07.2023 in ITA No.160/2015 and connected matters and the disposal of similar writ petitions in WP No.51999/2019 connected with W.P.No.53137/2008 and in W.P.No.5867/2022 and connected matters in the light of such decision. Sri.Kamal Sawhney, the learned Counsel for the petitioners, and Sri M.Dilip, the learned counsel

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NC: 2023:KHC:39006 WP No. 25138 of 2022

standing for the respondent, are heard for final disposal of the petition.

It remains undisputed that the petitioner, who is the recipient of certain amounts from Indian entities, cannot be subject to assessment if the Division Bench’s order dated 14.07.2023 prevails. However, Sri M.Dilip submits that the order dated 14.07.2023 has been called in question by the Revenue before the Hon’ble Supreme Court, and therefore this Court, may not make any observation on the merits of the petitioner’ grounds as against the lack of opportunity or service of due notices.

Sri Kamal Sawhney, in rejoinder, submits that in the unlikely event of the Revenue succeeding in its challenge against the Division Bench’s order dated 14.07.2023, the petitioner must be reserved liberty to seek revival of this petition if this petition stands disposed of in the light of the Division Bench’s order

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NC: 2023:KHC:39006 WP No. 25138 of 2022

dated 14.07.2023 and the later disposal of the other similar petitions.

These submissions are considered, and this Court is of the considered view that the petition must stand disposed of quashing the impugned assessment orders as also the penalty orders but with liberty to the petitioner to seek revival of this petition subject to the outcome of the challenge by the Revenue before the Hon’ble Supreme Court as against the Division Bench’s order dated 14.07.2023 in ITA No.160/2015 and other matters as certain other petitioner’s specific grounds are urged.

The petitions stands disposed of.

Sd/- JUDGE

SA ct:sr

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