VODAFONE QATAR P Q S C vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/5056/2023HC KarnatakaKAHC01011510202302 November 2023Bench: B M SHYAM PRASAD6 pages
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What did the High Court hold?

The High Court held that the writ petitions must stand disposed of, quashing the impugned assessment orders and penalty orders. This decision was made in light of the Division Bench's order dated July 14, 2023, and the disposal of similar writ petitions. However, the Court granted liberty to the petitioners to seek revival of these petitions, subject to the outcome of the Revenue's challenge before the Hon'ble Supreme Court against the Division Bench's order. The Court acknowledged that certain other petitioners had urged specific grounds. The operative direction was to quash the assessment and demand notices, with a conditional liberty to revive.

What were the facts?

The petitioner, Vodafone Qatar P Q S C, filed two writ petitions challenging the final assessment order dated December 23, 2022, passed by the Deputy Commissioner of Income Tax under Section 143(3) read with Section 147 and Section 144C of the Income Tax Act, 1961, for Assessment Year 2015-16. The petitions also challenged the demand notice issued under Section 156 of the Act. The core of the challenge was based on the contention that the petitioner, as a recipient of certain amounts from Indian entities, could not be subjected to assessment if a Division Bench's order dated July 14, 2023, in ITA No.160/2015 and connected matters, prevailed. The Revenue argued that this order was under challenge before the Supreme Court.

What were the issues?

1. Whether the writ petitions must 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. Assessee's Contention: The petitioner argued that they cannot be subject to assessment if the Division Bench's order dated July 14, 2023, prevails. In the event the Revenue succeeds in its challenge to this order before the Supreme Court, the petitioner sought liberty to revive these petitions. Revenue's Contention: The Revenue submitted that the Division Bench's order dated July 14, 2023, has been challenged before the Hon'ble Supreme Court. Therefore, the High Court should not make any observations on the merits of the petitioners' grounds regarding lack of opportunity or service of due notices.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 144C,Section 156

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP No. 5056 of 2023
WP No. 5112 of 2023

Read from the judgment's own cause title. This page is filed under one of them.

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

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. 5056 OF 2023 (T-IT) C/W WRIT PETITION NO. 5112 OF 2023 (T-IT) IN WP NO. 5056/2023 BETWEEN:

VODAFONE QATAR P Q S C MASHEIREB DOWNTOWN DOHA, ZONE 3, STREET 981, BUILDING 2, 4TH FLOOR, PO BOX 27727, DOHA, QATAR, PAN- AAHCV8797K REPRESENTED BY AUTHORISED SIGNATORY SHEIKH HAMAD ABDULLA J A AL-THANI AGE-43 YEARS, OCC-SERVICE R/O . MSHEIREB, DOWNTOWN DOHA, ZONE 3, STREET 981, BUILDING 2, 4TH FLOOR, PO BOX 27727, DOHA, QATAR. …PETITIONER (BY SRI. PAI DHUNGAT ANKUR, ADVOCATE) AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX ASSESSMENT CIRCLE 2(1) BMTC BUILDING, 80FT. ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560095.

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

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

2.

THE COMMISSIONER OF INCOME-TAX-2 BMTC BUILDING, 80FT. ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560095.

3.

VODAFONE IDEA LIMITED MARUTI INFOTECH CENTRE, 11/1, 12/1, KORAMANGALA, AMAR JYOTI LAYOUT, BENGALURU - 560-071. REPRESENTED BY ITS DIRECTORS. …RESPONDENTS (BY SRI. DILIP M.,ADVOCATE FOR R1& R2; R3 DISPENSED WITH VIDE ORDER DATED 02.11.2023)

THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FINAL ASSESSMENT ORDER PASSED BY THE R-1 IN ANN-N IMPUGNED FINAL ASSESSMENT ORDER DATED 23.12.2022 PASSED BY THE R-1 UNDER SECTION 143(3) READ WITH SECTION 147 READ WITH SECTION 144C OF THE IT ACT ALONG WITH DEMAND NOTICE ISSUED UNDER SECTION 156 OF THE IT ACT IN DIN AND ORDER NO.ITBA/AST/M/147/2022- 23/10482067673(1) FOR THE AY 2015-16. IN WP NO. 5112/2023 BETWEEN:

VODAFONE QATAR P Q S C MASHEIREB DOWNTOWN DOHA, ZONE 3, STREET 981, BUILDING 2, 4TH FLOOR, PO BOX 27727,

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

DOHA, QATAR PAN- AAHCV8797K

REPRESENTED BY AUTHORISED SIGNATORY SHEIKH HAMAD ABDULLA J A AL-THANI AGE-43 YEARS, OCC-SERVICE R/O . MSHEIREB DOWNTOWN DOHA, ZONE 3, STREET 981, BUILDING 2, 4TH FLOOR, PO BOX 27727, DOHA, QATAR. …PETITIONER (BY SRI. PAI DHUNGAT ANKUR.,ADVOCATE) AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX ASSESSMENT CIRCLE 2(1) BMTC BUILDING, 80FT. ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560095.

2.

THE COMMISSIONER OF INCOME-TAX-2 BMTC BUILDING, 80FT. ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560095.

3.

VODAFONE IDEA LIMITED MARUTI INFOTECH CENTRE, 11/1, 12/1, KORAMANGALA, AMAR JYOTI LAYOUT,

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

BENGALURU - 560-071. REPRESENTED BY ITS DIRECTORS. …RESPONDENTS (BY SRI. DILIP M.,ADVOCATE FOR R1& R2; R3 DISPENSED WITH VIDE ORDER DATED 02.11.2023)

THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FINAL ASSESSMENT ORDER PASSED BY THE R-1 IN ANN-N- IMPUGNED FINAL ASSESSMENT ORDER DATED 23.12.2022 PASSED BY THE R-1 UNDER SECTION 143(3) READ WITH SECTION 147 READ WITH SECTION 144C OF THE IT ACT ALONG WITH DEMAND NOTICE ISSUED UNDER SECTION 156 OF THE IT ACT IN DIN AND ORDER NO.ITBA/AST/M/147/2022- 23/10482067673(1) FOR THE AY 2015-16.

THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The question for consideration in these writ petitions would be whether they 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 WP

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

No.53137/2008 and in WP No.5867/2022 and connected matters in the light of such decision. Sri Pai Dhungat Ankur, the learned Counsel for the petitioners, and Sri M.Dilip, the learned counsel for the respondents, are heard for final disposal.

It remains undisputed that the petitioners, who are the recipients 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 petitioners’ grounds as against the lack of opportunity or service of due notices.

Sri Pai Dhungat Ankur, 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 petitioners must be reserved

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NC: 2023:KHC:38803 WP No. 5056 of 2023 C/W WP No. 5112 of 2023

liberty to seek revival of these petitions if these petitions stand disposed of in the light of the Division Bench’s order 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 petitions must stand disposed of quashing the impugned assessment orders as also the penalty orders but with liberty to the petitioners to seek revival of these petitions 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 stand disposed of.

SD/- JUDGE

AN/-

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