WIPRO ENTERPRISES PRIVATE LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME-TAX

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WP/18686/2023HC KarnatakaKAHC01043640202306 February 2024Author: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition, setting aside the impugned order dated July 28, 2023, passed by the TPO under Section 92CA(3) of the Income Tax Act, 1961. The matter was remitted back to the TPO for reconsideration afresh. The Court held that the TPO had not considered the relevant statutory provisions and the judgments relied upon by the petitioner, which were rendered prior to the impugned order. Without expressing any opinion on the merits of the rival contentions, the Court found it just and appropriate to allow the TPO to pass fresh orders after considering the relevant statutory provisions and the cited judicial precedents. Liberty was granted to the petitioner to submit additional pleadings and documents, and the TPO was directed to provide a sufficient and reasonable opportunity to the petitioner. All rival contentions on all aspects were kept open.

What were the facts?

The petitioner, Wipro Enterprises Private Limited, filed a writ petition before the High Court of Karnataka challenging an order passed by the Deputy Commissioner of Income-Tax, Transfer Pricing Officer (TPO) under Section 92CA(3) of the Income Tax Act, 1961, dated July 28, 2023, for Assessment Year 2020-21. The petitioner contended that the TPO erred by not considering relevant statutory provisions and numerous High Court judgments, some of which were confirmed by the Supreme Court. The petitioner sought to quash the TPO's order and have the matter remitted back for fresh consideration. The revenue argued that the petition lacked merit and that the petitioner had not produced the cited judgments, disentitling them to any indulgence.

What were the issues?

1. Whether the impugned order passed by the Transfer Pricing Officer (TPO) under Section 92CA(3) of the Income Tax Act, 1961, is liable to be quashed for non-consideration of relevant statutory provisions and judicial precedents? Assessee's contentions: The petitioner argued that the TPO committed an error by passing the impugned order without appreciating the relevant statutory provisions and several High Court judgments, including those confirmed by the Apex Court. These judgments, relied upon by the petitioner, were rendered prior to the impugned order. The non-consideration of these would vitiate the order, necessitating its setting aside and remittance for reconsideration. Revenue's contentions: The revenue contended that the petition had no merit and was liable to be dismissed. They further submitted that the petitioner did not produce the cited judgments, and therefore, was not entitled to any indulgence.

Which sections of the Income-tax Act were involved?

Section 92CA(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 18686 OF 2023 (T-IT) BETWEEN:

WIPRO ENTERPRISES PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 WIPRO HOUSE, NO.8, 7TH MAIN, 80 FEET ROAD, KORAMANGALA 1ST BLOCK, BENGALURU – 560 034 REPRESENTED HEREIN BY ITS CHIEF TAXATION OFFICER, MR. SURESH PARAMESWARAN

…PETITIONER (BY SRI. SANDEEP HUILGOL., ADVOCATE)

AND:

1.

THE DEPUTY COMMISSIONER OF INCOME-TAX TRANSFER PRICING OFFICER 2(2)(2) BANGALORE BMTC BUILDING, 80 FEET ROAD,

2.

THE DEPUTY COMMISSIONER OF

INCOME TAX,CIRCLE 7(1)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD,

3.

THE ADDITIONAL/ JOINT / DEPUTY/ ASSISTANT COMMISSIONER, OF INCOME TAX /INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT,

Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA

2ND FLOOR, JAWARHARLAL NEHRU STADIUM NEW DELHI - 110 003.

4.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-2,

BANGALORE BMTC BUILDING, 80 FEET ROAD, …RESPONDENTS (BY SRI.SUSHAL TIWARI., ADVOCATE)

THIS WP IS FILED UNDER ARTICLE

OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER BEARING ITBA/ TPO/F/92CA3/2023-24/1054716147(1) DATED 28/07/2023 PASSED BY R1 UNDER SECTION 92CA(3) OF THE INCOME-TAX ACT, 1961, FOR THE AY 2020-21 (ANNEXURE-A) & ETC.,

THIS PETITION, COMING ON FOR PRELIMINARY HEARING , THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

In this petition, petitioner is aggrieved by the impugned order passed by the respondent No.1 (Transfer Pricing Officer) – TPO under Section 92CA(3) of the Income Tax Act dated 28.07.2023 and for other reliefs: “a) Quashing the order bearing ITBA/TPO/F/92CA3/2023- 24/1054716147(1) dated 28.07.2023 passed by Respondent No.1 under section 92 CA(3) of the Income Tax Act, 1961, for the AY 2020-21 (Annexure – A) and b) Pass such other or further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case, and 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 memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that the respondent No.1 – TPO committed an error in passing the impugned order without considering or appreciating the relevant statutory provisions as well as the judgment of various High Courts as stated below: 1. Commissioner of Income Tax-3 vs M/s. Thyssen Krupp Industries India Pvt. Ltd., 381 IR 413 2. Commissioner of Income Tax vs Tara Jewels Exports Pvt. Ltd. Order dated 05.10.2025 in ITA No.1814/2013 (HC- Bombay) 3. Commissioner of Income Tax vs Keihin Panalfa Ltd. 381 ITR 407 (Delhi) 4. CIT vs Petro Araldite Pvt Ltd., (Bombay) Order dated 24.11.2015. 5. CIT vs Hindustan Uniliever Ltd., 394 ITR 73 (Bombay) 6. CIT vs ALSTOM Projects India Ltd., 394 ITR 141 (Bombay) 7. CIT vs Phoenix Mecano (India) Pvt. Ltd., (2019) 414 ITR 704 (Bombay)

8.

CIT-I vs Hindustan Unilever Ltd., SLP(C) No.(s) 22381/2017 Order dated 29.10.2018 (SC) 9. CIT vs Phoenix Mecano (India) Pvt. Ltd., SLP (civil) Diary No.2234/2018 Order dated 05.02.2018 (SC).

4.

It is submitted that non consideration of the relevant statutory provisions as well as the law laid down by the various High Courts which have been confirmed by the Apex Court would vitiate the impugned order which deserves to be set aside and the matter be remitted back to the respondent No.1 – TPO for reconsideration afresh in accordance with law. 5. Per contra, learned counsel for respondents would submit that there is not merit in the petition and same is liable to be dismissed. It is submitted that if sufficient opportunities were granted to the petitioner who did not produce the aforesaid judgments and as such they are not entitled to any indulgence in the present petition. 6. I have given my anxious consideration to the rival submissions and perused the material on record.

7.

As rightly contended by the learned counsel for the petitioner, the aforesaid judgments relied upon the petitioner which were rendered prior to the impugned order have not been considered by the respondent No.1 – TPO before passing the impugned order which also does not take into account the relevant statutory provisions before passing the impugned order. Under these circumstances, without expressing any opinion on the merit/demerits of the rival contentions and in order to enable the first respondent – TPO to pass fresh orders after consideration of the relevant statutory provisions and the judgments of various High Courts referred to supra, I deem it just and appropriate to set aside the impugned order and remit the matter back to the first respondent for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER

(i) Petitioner is hereby allowed.

(ii) Impugned order dated 28.07.2023 passed by the respondent No.1 (Transfer Pricing Officer) – TPO under Section 92CA(3) of the Income Tax Act, 1961, is hereby set aside.

(iii) Matter is remitted back to the respondent No.1 – TPO for reconsideration afresh bearing in mind the aforesaid judgments and the relevant statutory provisions, in this regard. (iv) All rival contentions on all aspects of the matter, are kept open and no opinion is expressed on the same. (v) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, case law before the first respondent who shall consider the same and proceed further, in accordance with law. (vi) It is made clear that the respondent shall provide sufficient and reasonable opportunity to the petitioner and hear him and proceed further in the matter.

Sd/- JUDGE

DHA List No.: 2 Sl No.: 0

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