EMIRATES TELECOMMUNICATIONS GROUP COMPANY vs. THE DEPUTY COMMISSIONER OF INCOME TAX

PDF · subscribers
/4539/2024HC KarnatakaKAHC01008127202407 March 2024Author: S.R.KRISHNA KUMAR4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court of Karnataka allowed the petition. The Court noted that the revenue's counsel did not dispute that the issue in controversy, relating to the taxability of monies paid to non-resident entities, was held in favour of the assessee in the cited judgments of the High Court. Therefore, following the precedent set in M/s. Vodafone Idea Limited, M/s. Deutsche Telekom Ag, Darmstadt, and MCI International Inc., the Court found that the impugned notices and order deserved to be quashed. The ratio decidendi is that if a similar issue has been decided in favour of the assessee by a coordinate bench or division bench of the High Court, and the revenue does not contest this, then the impugned reassessment proceedings initiated under Section 148 and 148A should be quashed. The operative direction was to quash the impugned Notice dated 22.03.2022 (Annexure-A), the impugned order dated 07.04.2022 (Annexure-B), and the impugned notice dated 07.04.2022 (Annexure-C).

What were the facts?

The petitioner, Emirates Telecommunications Group Company (Etisalat Group), filed a writ petition before the High Court of Karnataka challenging a notice under Section 148 dated April 7, 2022, and an order under Section 148A(d) dated April 7, 2022, issued by the Deputy Commissioner of Income Tax, International Taxation, Circle-2(2), Bengaluru. These actions initiated reassessment proceedings for Assessment Year 2018-19. The petitioner sought to quash these notices and the order. The respondents are the Deputy Commissioner of Income Tax and the Principal Chief Commissioner of Income Tax.

What were the issues?

1. Whether the notice under Section 148 dated 07.04.2022, initiating reassessment proceedings for AY 2018-19, is liable to be quashed? (Question of law) 2. Whether the order under Section 148A(d) dated 07.04.2022, passed by the Assessing Officer for AY 2018-19, is liable to be quashed? (Question of law) The petitioner contended that the issues involved were squarely covered by previous judgments of the High Court of Karnataka in M/s. Vodafone Idea Limited Vs. District Director of Income Tax, M/s. Deutsche Telekom Ag, Darmstadt. Vs The Joint Commissioner of Income Tax, and MCI International Inc. V/s Deputy Commissioner of Income Tax. The revenue, through its counsel, did not dispute that the controversy regarding the taxability of monies paid to non-resident entities was decided in favour of the assessee in the aforementioned judgments and submitted that appropriate orders could be passed.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF MARCH, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 4539 OF 2024 (T-IT) BETWEEN:

EMIRATES TELECOMMUNICATIONS GROUP COMPANY (ETISALAT GROUP) P.J.S.C. (ETISALAT) (EARLIER KNOWN AS EMIRATES TELECOMMUNICATIONS CORPORATION) E AND HEAD OFFICE BUILDING -A INTERSECTION OF SHEIKH ZAYED THE 1ST STREET SHEIKH RASHID BIN SAEED AL MAKTOUM ROAD PO BOX 3838, ABU DHABI, UAE, REPRESENTED BY ITS AUTHORISED SIGNATORY MR. MOHAMED KARIM BENNIS …PETITIONER (BY SRI. HERPREET SINGH AJMANI FOR SMT. PRERNA PONAPPA.,ADVOCATES)

AND:

1.

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 – 560 095.

2.

THE PR. CHIEF COMMISSIONER

OF INCOME TAX (INTL TAXN), NEW DELHI. …RESPONDENTS (BY SRI.M.DILIP .,ADVOCATE)

THIS W.P IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO i) QUASH THE NOTICE UNDER SECTION 148 DATED 07/04/2022 BEARING DIN AND NOTICE NO. ITBA/AST/S/148.1/2022- 23/1042634288(1) (ANNEXURE-C) ISSUED BY THE ASSESSING OFFICER INITIATING REASSESSMENT PROCEEDINGS IN THE CASE OF THE PETITIONER FOR AY 2018-19 AND ETC.

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE OURT MADE THE FOLLOWING: ORDER

In this petition, petitioner seeks for the following reliefs:- (1) Issue a writ of certiorari or similar writ, order or direction quashing the notice under Section 148 dated 07.04.2022 bearing DIN and Notice no. ITBA/AST/S/148_1/2022- 23/1042634288(1) (ANNEXURE -C) issued by the Assessing Officer initiating reassessment proceedings in the case of the Petitioner for AY 2018-19; (ii) Issue a writ of certiorari or similar writ, order or direction quashing the order dated 07.04.2022 under Section 148A(d) bearing DIN and Notice no. ITBA/AST/F/148A/2022- 23/1042634122(1) (marked as ANNEXURE - B) passed by the Assessing Officer under section 148A(d) of the Act for AY 2018- 19; (iii) Issue any other writ, order or direction as deemed fit and appropriate by this Hon'ble Court in the facts and circumstances of the case, in the interests of justice and equity.

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the issue in controversy involved in

the present petition is squarely covered by the judgment of the Hon’ble Division Bench of this Court in the case of M/s. Vodafone Idea Limited Vs. District Director of Income Tax and Others- ITA No.160/2015 and connected matters dated 14.07.2023. The said judgment was followed by the co-ordinate Bench of this Court in the case of M/s. Deutsche Telekom Ag, Darmstadt. Vs The Joint Commissioner of Income Tax - W.P.No.51999/2019 and connected matters dated 23.08.2023. 3.1 It is further submitted that the aforesaid judgment was also followed by this Court under identical circumstances arising out of proceedings under Section 148A of the Income Tax Act, 1961, in the case of MCI International Inc. V/s Deputy Commissioner of Income Tax - W.P.No.38059/2019 dated 13.10.2023. It is therefore submitted that the impugned Notice dated 22.03.2022 vide Annexure-A as well as the impugned order and impugned Notice both dated 07.04.2022 vide Annexures-B and C respectively deserve to be quashed.

4.

Per contra, learned counsel for the respondents does not dispute that the issue in controversy involved in the present petition relating to taxability of monies paid to non-resident entities was

held in favour of the assessee in the aforesaid judgments of this Court. It is therefore submitted that appropriate orders may be passed by this Court in the present petition also. 5. In view of the aforesaid facts and circumstances and on perusal of the judgment of this Court referred to supra, I am of the view that the impugned orders and Notice referred to above deserve to be quashed. 6. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned Notice at Annexure – A dated 22.03.2022, impugned order at Annexure-B dated 07.04.2022 and impugned notice at Annexure-C dated 07.04.2022 issued / passed by the respondents are hereby quashed.

Sd/- JUDGE

DHA/SRL List No.: 1 Sl No.: 20

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →