MARVELL INDIA PRIVATE LIMITED vs. NATIONAL FACELESS ASSESSMENT CENTRE DELHI

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 15TH DAY OF DECEMBER, 2021 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.19933 OF 2021 (T-IT) BETWEEN: MARVELL INDIA PRIVATE LIMITED 10TH AND 11TH FLOOR, TOWER D AND E GLOBAL TECHNOLOGY PARK MARATHAHALLI-SARJAPUR OUTER RING ROAD, BANGALORE-560 103 KARNATAKA REPRESENTED BY THAKER PRADIPKUMAR …PETITIONER (BY SRI MUKESH BUTANI, ADVOCATE SRI SHREYASH SHAH, ADVOCATE MS.AKSHARA RAO, ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE, DELHI THROUGH PR. CHIEF COMMISSIONER OF INCOME TAX/ DEPUTY COMMISSIONER OF INCOME TAX 2ND FLOOR, JAWAHARLAL NEHRU STADIUM NEW DELHI 110 003 EMAIL: delhi.pccit.neac@incometax.gov.in/ delhi.dcit1.2.neac@incometax.gov.in 2. DEPUTY COMMMISSIONER OF INCOME TAX CIRCLE 4(1)(1), BANGALORE EMAIL: bangalore.dcit4.1.1@incometax.gov.in 3. DISPUTE RESOLUTION PANEL – 2

BENGALURU, 'A' WING, 4TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU – 560 034, EMAIL: bangalore.secretary.drp2@incometax.gov.in

…RESPONDENTS (BY SRI E.I.SANMATHI, ADVOCATE)

2 THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ASSESSMENT ORDER DTD: 26.04.2021 PASSED BY R-1 UNDER SECTION 143(3) READ WITH SECTION 144C AND SECTION 144B FOR ASSESSMENT YEAR 2017-18, THE ACCOMPANYING NOTICE OF DEMAND DATED 26.04.2021 ISSUED UNDER SECTION 156 AND NOTICE DATED 26.04.2021 FOR INITIATING PENALTY PROCEEDING UNDER SECTION 274 READ WITH SECTION 270A OF THE ACT AS WELL AS ORDER PASSED BY THE RESPONDENT NO.3 UNDER SECTION 144C(5) DATED 24.11.2021 AND THE PROCEEDINGS BE RESTORED AT THE LEVEL OF RESPONDENT NO.3 AND ETC. THIS W.P. COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER

In this petition, petitioner seeks quashing of the impugned Assessment Order at Annexure – A dated 26.04.2021 and consequential Demand Notice at Annexure – B dated 26.04.2021 issued by respondent No.1 / Assessing Officer as well as the impugned Order at Annexure – Q dated 24.11.2021 passed by respondent No.3 / Dispute Resolution Panel (for short, the 'DRP'). 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. The material on record indicates that pursuant to the Draft Assessment Order dated 16.02.2021 issued by

3 the respondent No.1 / Assessing Officer to the petitioner, the petitioner filed objections under Section 144C(2)(b) of the Income Tax Act, 1961 (for short, the 'IT Act'), both before the respondent No.1 / Assessing Officer as well as before respondent No.3 / DRP within prescribed period of 30 days. It is the grievance of the petitioner that despite the petitioner complying with the provisions contained in Section 144C(2)(b) of the IT Act and filing objections within the prescribed period before both the Assessing Officer as well as the DRP, the respondent No.1 has proceeded to pass the impugned Assessment Order without following the mandatory procedure prescribed under Sections 144C and 144C(5) to C(13) of the IT Act and without awaiting directions from the DRP and consequently, the impugned Assessment Order dated 26.04.2021 deserves to be quashed. 4. It is also submitted that subsequent to petitioner submitting a representation dated 10.05.2021 and 11.05.2021, the DRP has issued replies to the petitioner fixing the dates of hearing as 18.08.2021 and

4 01.09.2021 by the DRP, pursuant to which, the DRP has proceeded to pass the impugned order at Annexure – Q stating that the DRP would not be in a position to pass the order in view of the fact that the matter is pending before this Court. It is therefore submitted that in view of the subsequent order passed by the DRP during pendency of this petition, the impugned Assessment Order as well as the order passed by the DRP deserves to be quashed and the Assessing Officer / DRP be directed to conclude the proceedings after considering the objections of the petitioner filed on 16.03.2021 and thereafter, the Assessing Officer be directed to proceed further as per the directions of the DRP and by following mandatory procedure under Section 144(C)5 to (C)13 of the IT Act. 5. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 6. As rightly contended by the learned counsel for the petitioner, the material on record indicates that the year 2021 being a non-leap year comprising of only 28 days and

5 the Draft Assessment Order having been issued on 16.02.2021, the petitioner had time upto a period of 30 days i.e., upto 18.03.2021 to file objections as required under Section 144C(2)(b) of the IT Act. It is an undisputed fact that the petitioner filed objections before both the DRP as well as the Assessing Officer on 16.03.2021 i.e., within the prescribed period of 30 days. 7. Under these circumstances, respondent No.1 – Assessing Officer clearly fell in error in neither considering the objections nor awaiting directions from the DRP and has erroneously proceeded to pass the impugned Assessment Order dated 26.04.2021, which is clearly in violation and contravention to the mandatory procedure prescribed under Section 144(C)5 to (C)13 of the IT Act and without awaiting further directions from the DRP and as such, the impugned Assessment Order dated 26.04.2021 deserves to be quashed. 8. Learned counsel for the petitioner is also right in his contention that during the pendency of the present petition, the DRP has passed the impugned order at

6 Annexure – Q dated 24.11.2021 disposing of the case on the sole / simple ground that the matter is pending before this Court, which is clearly erroneous in as much as in view of my finding above that the impugned Assessment Order itself is illegal, arbitrary and deserves to be quashed, the subsequent order at Annexure – Q passed by the DRP also deserves to be quashed and DRP be directed to proceed further in accordance with law as contemplated under Section 144(C)5 to (C)13 of the IT Act by considering the objections dated 16.03.2021 filed by the petitioner. 9. In the result, I proceed to pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned Assessment Order at Annexure – A dated 26.04.2021 and consequential Demand Notice at Annexure – B dated 26.04.2021 and Notice at Annexure – C dated 26.04.2021 issued by respondent No.1 / Assessing Officer as well as the impugned Order at Annexure – Q dated 24.11.2021

7 passed by respondent No.3 / Dispute Resolution Panel are hereby quashed. (iii) Matter is remitted back to the DRP for reconsideration afresh in accordance with law and the provisions contained in Section 144(C) of the IT Act after considering objections filed by the petitioner to the Draft Assessment Order. (iv) Upon the respondent No.3 / DRP issuing necessary directions as stated supra, the respondent No.1 / Assessing Officer shall proceed further and conclude the proceedings in accordance with law. SD/- JUDGE SV