Wp/1730/2019 Of Google Ireland Limited v. The Assistant Commissioner Of Income Tax

Digitallysigned byVANAMALANLocation:High CourtofKarnataka HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3 DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD -WRIT PETITION NO. 1730 OF 2019 (TIT) C/W -WRIT PETITION NO. 1726 OF 2019 (TIT) IN WP No. 1730/2019 BETWEEN: GOOGLE IRELAND LIMITED GORDON HOUSE, BARROW STREET, DUBLIN -4, D04, E5WR, IRELAND, REPRESENTED HEREIN BY ITS AUTHORIZED SIGNATORY MS SABIA VEQAR RESIDING AT C121, SARASWATI KUNJ APARTMENTS, PLOT NO.25, PATPARGANJ, DELHI - 110092. …PETITIONER (BY SRI. DEEPAK CHOPRA A/W SRI. ANMOL ANAND, MS. PRIYA TANDON AND SRI. GOUTHAM R., ADVOCATES) AND: THE ASSISTANT COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE - 1(1), ROOM NO 441, HC-KAR IV FLOOR, BMTC BUILDING, 80 FT ROAD, KORAMANGALA BANGALORE - 560095 …RESPONDENT (BY SRI. E I SANMATHI A/W SRI. M. DILIP, ADVOCATES) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FINAL ASSESSMENT ORDER DATED 24.12.2018 (IMPUGNED ORDER, MARKED AS ANNEXURE-F) PASSED BY THE RESPONDENT IN THE CASE OF THE PETITIONER FOR AY 2010-11 THEREBY ASSESSING THE TOTAL INCOME OF THE PETITIONER AT INR 268,40,62,959/-; QUASH THE NOTICE DATED 24.12.2018 (MARKED AS ANNEXURE-G) ISSUED BY THE RESPONDENT U/S 156 OF THE ACT THEREBY RAISING A TAX DEMAND OF INR 59,50,76,888/- AGAINST THE PETITIONER FOR AY 2010-11; QUASH THE NOTICE DATED 24.12.2018 (MARKED AS ANNEXURE-H) ISSUED BY THE RESPONDENT THEREBY INITIATING PENALTY PROCEEDINGS U/S 271(1)(c) OF THE ACT AGAINST THE PETITIOENR FOR AY 2010-11; QUASH THE CORRIGENDUM DATED 31.3.2018 (MARKED AS ANNEXURE-I) ISSUED BY THE RESPONDENT WHEREBY HE HAS SOUGHT TO RECTIFY HIS ILLEGALITY BY TREATING THE FINAL ASSESSMENT ORDER DATED 24.12.2018 AS A DRAFT ORDER; IN WP NO. 1726/2019 BETWEEN: GOOGLE IRELAND LIMITED GORDON HOUSE, BARROW STREET DUBLIN-4 D04, E5W5, IRELAND HC-KAR REPRESENTED HEREIN BY ITS AUTHORIZED SIGNAOTRY MS SABIA VEQAR R/AT C-121, SARASWATI KUNJ APTS, PLOT NO.25, PATPARGANJ, DELHI-11092 ...PETITIONER (BY SRI. DEEPAK CHOPRA A/W SRI. ANMOL ANAND, MS. PRIYA TANDON AND SRI. GOUTHAM R., ADVOCATES) AND: THE ASSISTANT COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION CIRCLE -1(1), ROOM NO.441,IV FLOOR BMTC BUILDING, 80 FT ROAD, KORAMANGALA BANGALORE-560095 ...RESPONDENT (BY SRI. Y.V.RAVIRAJ A/W SRI. M.DILIP, ADVOCATES) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FINAL ASSESSMENT ORDER DATED 24.12.2018 (IMPUGNED ORDER, MARKED AS ANNEXURE-F) PASSED BY THE RESPONDENT IN THE CASE OF THE PETITIONER FOR AY 2009-10 THEREBY ASSESSING THE TOTAL INCOME OF THE PETITIONER AT INR 241,77,35,793/-; QUASH THE NOTICE DATED 24.12.2018 (MARKED AS ANNEXURE-G) ISSUED BY THE RESPONDENT U/S 156 OF THE ACT THEREBY RAISING A TAX DEMAND OF INR 56,66,60,453/- AGAINST THE PETITIONER FOR AY 2009-10; QUASH THE NOTICE DATED 24.12.2018 (MARKED AS ANNEXURE-H) ISSUED BY THE RESPONDENT THEREBY INITIATING PENALTY PROCEEDINGS U/S 271(1)(c) OF THE ACT AGAINST THE PETITIONER FOR AY 2009-10; QUASH THE CORRIGENDUM DATED 31.3.2018 (MARKED AS ANNEXURE-I) ISSUED BY THE RESPONDENT WHEREBY HC-KAR HE HAS SOUGHT TO RECTIFY HIS ILLEGALITY BY TREATING THE FINAL ASSESSMENT ORDER DATED 24.12.2018 AS A DRAFT ORDER. THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER HC-KAR HE HAS SOUGHT TO RECTIFY HIS ILLEGALITY BY TREATING THE FINAL ASSESSMENT ORDER DATED 24.12.2018 AS A DRAFT ORDER. THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER The petitioner is aggrieved by the orders dated 24.12.2018 under Section 143(3) read with Section 147, 92CA and 144C of the Income Tax Act, 1961 [for short, 'the IT Act'] and these impugned orders are relevant to the Assessment Years 2009-10 and 2010-11. Mr. Deepak Chopra, the learned counsel for the petitioner, submits that the outcome in these petitions must turn on whether this Court could accept the respondent's case that the impugned orders dated 24.12.2018 are not Final Assessment Orders but Draft Assessment Orders as required under Section 144C of the IT Act. 2.Mr. Deepak Chopra, to buttress the argument that the impugned orders are indeed Final HC-KAR NC: 2025:KHC:18714WP No. 1730 of 2019C/W WP No. 1726 of 2019 Assessment Orders and not Draft Assessment Orders, while inviting this Court's attention to paragraph No.6 of the operative portion of the impugned orders where there is a reference to Section 144C and the opportunity to file objections with the Dispute Resolution Panel, Bengaluru, submits that the impugned orders cannot be treated as Draft Assessment Ordersbecause of the succeeding paragraph where the assessment is concluded computing income and tax while issuing demand notice under Section 156 of the IT Act with the initiation of proceedings under Section 274 read with Section 271(1)(c) thereof. 3.Mr. Deepak Chopra further submits that in very similar circumstances, a Division Bench of this Court in Commissioner of Income-tax (International Taxation) Vs. Cisco Systems Services B.V.[1], has opined that instead of a Draft Assessment 1[2023] 149 taxmann.com486 (Karnataka) NC: 2025:KHC:18714WP No. 1730 of 2019C/W WP No. 1726 of 2019 Order, the Final Assessment Order is passed and that the subsequent correction is an attempt by the Revenue to gloss over this incurable error. The learned counsel submits that the Division Bench has held that the Revenue's defense cannot be accepted when there is simultaneous demand and initiation of penal proceedings. 4.Mr. E. I. Sanmathi, the learned standing counsel for the respondent, relying upon the assertions in the Statement of Objections, canvasses to contend that the description of the impugned orders as Final Assessment Orders would only be a typographical error, but the learned counsel cannot controvert the fact that there is a computation of tax with simultaneous initiation for penalty with tax, or the import of law as is declared by the Division Bench. As such, the following: HC-KAR - 7 - NC: 2025:KHC:18714WP No. 1730 of 2019C/W WP No. 1726 of 2019 ORDER The petitions are allowed and the impugned orders dated 24.12.2018 [Annexure-F] are quashed. Sd/- (B M SHYAM PRASAD) JUDGE RB