By Sri v. Chandrasekhar, Advocate

Digitallysigned byNARASIMHAMURTHYVANAMALALocation:HIGHCOURT OFKARNATAKA WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 C/W WP No. 4233 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13 DAY OF APRIL, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD -WRIT PETITION NO. 52809 OF 2019 (TIT) C/W WRIT PETITION NO. 4233 OF 2021 WRIT PETITION NO. 4409 OF 2021WRIT PETITION NO. 17299 OF 2021 WRIT PETITION NO. 17300 OF 2021 WRIT PETITION NO. 17304 OF 2021 IN WRIT PETITION NO. 52809 OF 2019BETWEEN: M/S AD2PRO MEDIA SOLUTIONS PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, SRI JUDE KISHORE, S/O SRI A J SANTHANASAMY, AGED ABOUT 56 YEARS, NO.163/B, 2ND AND 3RD FLOOR, 6TH MAIN, 3RD CROSS, 3RD PHASE, J.P.NAGAR, BENGALURU-560078 …PETITIONER (BY SRI. V.CHANDRASEKHAR, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 AND: THE ASSISTANT COMMISSIONER OF INCOME TAX CRICLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095 …RESPONDENT (BY SRI. K.V.ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT AS ENCLOSED AND MARKED AS ANNEXURE-A DTD.30.3.2019 FOR THE A.Y, 2012-13 AND ETC. IN W.P. 4233/2021 BETWEEN: THE PRINCIPAL OFFICER M/S AD2PRO MEDIA SOLUTIONS INC, USA REP. BY ITS AUTHORISED SIGNATORY SRI. VENKATESAPERUAMAL GOPALAKRISHNAN SON OF LATE SRI. VENKATESAPERUMAL AGED ABOUT 63 YEARS, NO.23371, MULHOLLAND DR. NO.132, WOODLAND HILLS, CA 91364 USA …PETITIONER (BY SRI. V. CHANDRASEKHAR, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 AND: THE DEPUTY COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE-1(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. (BY SRI. E.I. SANMATHI, ADVOCATE) …RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT DTD.28.3.2018 FOR THE ASSESSMENT YEAR 2012-13 AS ENCLOSED AND MARKED AS ANNEXURE-A; QUASH THE ORDER OF DISPOSAL OF OBJECTION PASSED BY THE RESPONDENT DTD.22.12.2020 FOR THE ASSESSMENT YEAR 2012-13 AS ENCLOSED AND MARKED AS ANNEXURE-B AND ETC. IN W.P. 4409/2021 BETWEEN: THE PRINCIPAL OFFICER M/S AD2PRO MEDIA SOLUTIONS INC, USA REP. BY ITS AUTHORISED SIGNATORY SRI. VENKATESAPERUAMAL GOPALAKRISHNAN SON OF LATE SRI. VENKATESAPERUMAL AGED ABOUT 63 YEARS, NO.23371, MULHOLLAND DR. NO.132, WOODLAND HILLS, CA 91364 USA …PETITIONER (BY SRI. V. CHANDRASEKHAR, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 AND: THE DEPUTY COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE-1(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. (BY SRI. E.I. SANMATHI, ADVOCATE) …RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT DTD.28.3.2018 FOR THE ASSESSMENT YEAR 2011-12 AS ENCLOSED AND MARKED AS ANNEXURE-A; QUASH THE ORDER OF DISPOSAL OF OBJECTION PASSED BY THE RESPONDENT DTD.22.12.2020 FOR THE ASSESSMENT YEAR 2011-12 AS ENCLOSED AND MARKED AS ANNEXURE-B AND ETC. IN WRIT PETITION NO. 17299 OF 2021 BETWEEN: AND: THE DEPUTY COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE-1(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. (BY SRI. E.I. SANMATHI, ADVOCATE) …RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT DTD.28.3.2018 FOR THE ASSESSMENT YEAR 2011-12 AS ENCLOSED AND MARKED AS ANNEXURE-A; QUASH THE ORDER OF DISPOSAL OF OBJECTION PASSED BY THE RESPONDENT DTD.22.12.2020 FOR THE ASSESSMENT YEAR 2011-12 AS ENCLOSED AND MARKED AS ANNEXURE-B AND ETC. IN WRIT PETITION NO. 17299 OF 2021 BETWEEN: M/S AD2PRO MEDIA SOLUTIONS PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, SRI VENKATESAPERUMAL GOPALAKRISHNAN, S/O LATE SRI. VENKATESAPERUMAL, AGED ABOUT 63 YEARS, NO.163/B, 2ND AND 3RD FLOOR, 6TH MAIN, 3RD CROSS, 3RD PHASE, J.P.NAGAR, BENGALURU-560078 …PETITIONER (BY SRI. V.CHANDRASEKHAR, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 AND: 1.THE ASSISTANT COMMISSIONER OF INCOME TAX CRICLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095CRICLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095 2. NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME-TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO, 401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110 003. REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME-TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO, 401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110 003. …RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT NO.1 AS ENCLOSED AND MARKED AS ANNEXURE-A DTD.23.8.2019 FOR THE A.Y, 2014-15 AND ETC. WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 IN WRIT PETITION NO. 17300 OF 2021 BETWEEN: M/S AD2PRO MEDIA SOLUTIONS PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, SRI VENKATESAPERUMAL GOPALAKRISHNAN, S/O LATE SRI. VENKATESAPERUMAL, AGED ABOUT 63 YEARS, NO.163/B, 2ND AND 3RD FLOOR, 6TH MAIN, 3RD CROSS, 3RD PHASE, J.P.NAGAR, BENGALURU-560078 …PETITIONER (BY SRI. V.CHANDRASEKHAR, ADVOCATE) AND: 1.THE ASSISTANT COMMISSIONER OF INCOME TAX CRICLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095CRICLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560095 2. NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME-TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO, 401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110 003. REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME-TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO, 401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110 003. …RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT NO.1 AS ENCLOSED AND MARKED AS ANNEXURE-A DTD.10.07.2019 FOR THE A.Y, 2015-16 AND ETC. IN WRIT PETITION NO. 17304 OF 2021 BETWEEN: …RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE) WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT NO.1 AS ENCLOSED AND MARKED AS ANNEXURE-A DTD.10.07.2019 FOR THE A.Y, 2015-16 AND ETC. IN WRIT PETITION NO. 17304 OF 2021 BETWEEN: M/S AD2PRO MEDIA SOLUTIONS PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, SRI VENKATESAPERUMAL GOPALAKRISHNAN, S/O LATE SRI. VENKATESAPERUMAL, AGED ABOUT 63 YEARS, NO.163/B, 2ND AND 3RD FLOOR, 6TH MAIN, 3RD CROSS, 3RD PHASE, J.P.NAGAR, BENGALURU-560078 …PETITIONER (BY SRI. V.CHANDRASEKHAR, ADVOCATE) AND: 1.THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, OF INCOME TAX CIRCLE 1 (1)(1), BMTC BUILDING, 80 FEET ROAD, WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 KORAMANGALA, BENGALURU-560095. 2. NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME-TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO, 401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110 003. …RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE RESPONDENT NO.1 AS ENCLOSED AND MARKED AS ANNEXURE-A DTD.23.08.2019 FOR THE A.Y, 2013-14 AND ETC. THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, THE COURT MADE E FOLLOWING: TH ORDER The writ petitions in W.P.No.52809/2019, W.P.No.17299/2021, W.P.No.17300/2021 and W.P.No.17304/2021 are filed calling in question the WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 notices issued under Section 148 of the Income Tax, Act, 1961 (for short, 'the I.T.Act') for the assessment years commencing from 2012-13 to the assessment years 2015-16 and the other two writ petitions viz., W.P.No.4233/2021 and W.P.No.4409/2021 are also filed calling in question the notices issued under Section 148 of the I.T.Act for the assessment years 2011-12 and 2012-13 but by the United States' entity. The petitioners, apart from calling in question the notices issued under Section 148 of the I.T.Act, have also called in question the respective orders disposing of the petitioner's objections. The notices impugned are produced in each of these petitions as Annexure-A and the orders disposing of the objections are produced as Annexure-B. Admittedly, the impugned notices are issued for framing reassessment on the proposed disallowance which is essentially on the ground that the petitioner, because of failure to deduct taxes at source on WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 certain fees paid to entities outside India, would be a deemed assesseein default under the provisions of Section 201/201(1A) of the I.T.Act and hence, disallowances under Section 40(a)(ia) of the I.T.Act. The notices in W.P.No.4409/2021 and W.P.No.4233/2021 are for assessment of the amount received. Admittedly, the impugned notices are issued for framing reassessment on the proposed disallowance which is essentially on the ground that the petitioner, because of failure to deduct taxes at source on WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 certain fees paid to entities outside India, would be a deemed assesseein default under the provisions of Section 201/201(1A) of the I.T.Act and hence, disallowances under Section 40(a)(ia) of the I.T.Act. The notices in W.P.No.4409/2021 and W.P.No.4233/2021 are for assessment of the amount received. It is submitted, without contravention, that with the decision of the Division Bench of this Court in ITA.No.232/2020 and connected matters, the petitioner in the writ petition in W.P.No.52809/2019 and three other petitions cannot be deemed assessee in default and in that event, there cannot be disallowance proposed leading to framing of assessment. Similarly, in view of this decision, the fee received by the petitioner in W.P.No.4409/2021 and W.P.No.4233/2021 would not be income amenable to a tax under theIT Act. In which event, the petitioner must succeed and the impugned WP No. 52809 of 2019C/W WP No. 4233 of 2021WP No. 4409 of 2021WP No. 17299 of 2021WP No. 17300 of 2021WP No. 17304 of 2021 notices as also the orders on disposal of objections be quashed. The petitions are allowed accordingly. Sd/- JUDGE RB