Wp/19000/2014 Of M/S Mphasis Deutscheland Gmbh v. Asst Director Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BBNGALURU| DATED THIS THE 12[‘T]DAY OF SEPTEMBER, 2019 BEFORE| THE HON’BLE MR.JUSTICE P.B. BAJANTHRI mWRIT PETITION NO.19000 OF 2014 (TIT)C/W WRIT PETITION NO.18993 OF 2014WRIT PETITION NO.18995 OF 2014WRIT PETITION NO.18996 OF 2014WRIT PETITION NO.18997 OF 2014AND WRIT PETITION NO.18998 OF 2014 IN WRIT PETITION NO.19000 OF 2014 BETWEEN: M/S.MPHASIS DEUTSCHELAND GMBHHAVING ITS OFFICE AT KOBLBENZBR STRABHEK 96130, BAD EMS, GERMANY,REPRBESEBENTBD BY SRI ARIJIT GANGULYM AA/A 43 YEARS, S/O. LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001YRHLAHANKA NEW TOWNBANGALORE-560 065... PRHTITION(BY SRI.DINESH P., ADV.- ABSENT) ©AND:ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN,NO.14/3, 6 KLOORNRUPATHUNGA ROAD.BANGALORE -560 OO]... RESPONDENT| (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DID: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT IN TO AND BIC. IN WRIT PETITION NO.18993 OF 2014 BETWEEN: M/S.MPHASIS (SHANGHAIT) SOFTWAREAND SERVICES COMPANY LIMITEDHAVING ITS OFFICE AT ROOM NO.23206,.NO.498, GHOUSHOUVUJING ROADPUDONG NEW AREA)SHANGHAI P.O. 201203CHINA, REP. BY SRI ARIJIT GANGULY, AVPA/A 43 YEARS, S/O LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001YRELAHANKA NEW TOWNBANGALORE -560 065... PRHTITION (BY SRI.DINESH P., ADV.) | AND: ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN,NO.14/3, 6 KLOORNRUPATHUNGA ROADBANGALORE-560 OO] ... RESPONDENT| (BY SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT, DECLARE THAT THE PETITIONER HAS NOINCOME CHARGBHBABLE TO TAX IN INDIA AND EIC IN WRIT PETITION NO.18995 OF 2014 BETWEEN: M/S.MPHASIS CORPORATION HAVING ITS OFFICE AT.NO.460, PARK AVENUE SOUTH.SUITE 1101, NEW YORK, NY 100 6 USA, |REP. BY SRI ARIJIT GANGULY, AVP.A/A 43 YEARS, $8/O.LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001YRELAHANKA NEW TOWNBANGALORE-560 O65 ... PETITIONE (BY SRI.DINESH P., ADV.) | AND:ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN, NO.14/3, 6 FLOORNRUPATHUNGA ROADBANGALORE-560 OO]... RESPONDENT| AND: (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT IN TO, DECLARE THAT THE PETITIONER HASNO INCOME CHARGBHBABLE TO TAX IN INDIA AND BIC IN WRIT PETITION NO.18996 OF 2014 BETWEEN: M/S.MPHASIS UK LIMITEDHAVING ITS OFFICE AT.* ST JOHN’S ROAD HARROWMIDDLESEX HA 12 EY!UNITRBD KINGDOMREP. BY SRI ARIJIT GANGULY, AVP.A/A 43 YEARS, S/O.LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001 YRELAHANKA NEW TOWNBANGALORE -560 065 ... PRHTITION (BY SRI.DINESH P., ADV.) | AND: ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN,NO.14/3, 6 KLOORNRUPATHUNGA ROAD.BANGALORE -560 OO]... RESPONDENT| (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT IN TO, DECLARE THAT THE PETITIONER HASNO INCOME CHARGBHBABLE TO TAX IN INDIA AND BIC IN WRIT PETITION NO.18997 OF 2014 BETWEEN: YRELAHANKA NEW TOWNBANGALORE -560 065 ... PRHTITION (BY SRI.DINESH P., ADV.) | AND: ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN,NO.14/3, 6 KLOORNRUPATHUNGA ROAD.BANGALORE -560 OO]... RESPONDENT| (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT IN TO, DECLARE THAT THE PETITIONER HASNO INCOME CHARGBHBABLE TO TAX IN INDIA AND BIC IN WRIT PETITION NO.18997 OF 2014 BETWEEN: M/S.MPHASIS CONSULTING LIMITED(FORMERLY PRINCETON CONSULTING LTD.)HAVING ITS OFFICE AT.88 WOOD STREET LONDON EC2V 7RS|UNITRBD KINGDOMREP. BY SRI ARIJIT GANGULY, AVP.A/A 43 YEARS, $8/O.LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001YRELAHANKA NEW TOWNBANGALORE -560 065... PETITIONE (BY SRI.DINESH P., ADV.) | AND: ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN, NO.14/3, 6 KLOORNRUPATHUNGA ROADBANGALORE -560 OO] ... RESPONDENT| (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION148 OF THE ACT, DECLARE THAT THE PETITIONER HAS NOINCOME CHARGBHBABLE TO TAX IN INDIA AND EIC IN WRIT PETITION NO.18998 OF 2014 BETWEEN: M/S.MPHASIS AUSTRALIA PTY LIMITED|HAVING ITS OFFICE AT.SHOP 5 17-19N EAST PARADE, |SUTHERLAND, NSW 2332SYDNBY AUSTRALIA REP. BY SRI ARIJIT GANGULY, AVP.A/A 43 YEARS, $8/O.LATE AMITAVA GANGULYR/AT NCC URBAN, NCC ASTER PARKBLOCK B, FLAT NO. 1001YRHLAHANKA NEW TOWNBANGALORE -560 065... PETITIONE(BY SRI.DINESH P., ADV.) |AND:ASST. DIRECTOR OF INCOME TAXINTERNATIONAL TAXATION, CIRCLE (1)RASHTROTHANA BHAVAN, NO.14/3, 6 KLOORNRUPATHUNGA ROADBANGALORE-560 OO]... RESPONDENT. (BY SRI.DILIP M. FOR SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND22/ OF CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE IN ANNEX-A DTD: 29.03.2014 ISSUED UNDER SECTION 148 OF THE ACT, DECLARE THAT THE PETITIONER HAS NO)INCOME CHARGBABLE TO TAX IN INDIA AND BITC. THESE PETITIONS COMING ON FOR HEARING, THIS DAY,THE COURT MADE THE FOLLOWING:-. ORDER Inthese bunch/batch of writ petitions, petitionerhas assailed the notice dated 29.03.2014 (Annexure-A)|(in all the matters) issued under Section 148 of the|Income Tax Act, 1961 (for short ‘the Act’). | 2One of the ground urged by the petitioner is|that there is no jurisdiction to initiate proceedings|under Section 148 of the Act. The deductor is a taxassessee in India duly filing returns and gettingassessed. The entire transaction of the petitioner has|been duly captured and wholly disclosed. There is no|hope for initiating proceedings under Section 148 of theAct. Petitioner has not apprised this Court in pointing|out that the Assistant Director of Income Tax,|International Taxation, Circle(1), Bengaluru — 560001|has no jurisdiction to initiate proceedings under Section|148 of the Act while issuing notice. Merely stating that| proceedings initiated were without jurisdiction cannot|be appreciated. On the other hand, Supreme Court in|the case of.GKN Driveshafts (India) Ltd., Vs. IncomeTax Officer & Ors}reported in(2003) 179 CTR (SC) 11held as under: | proceedings initiated were without jurisdiction cannot|be appreciated. On the other hand, Supreme Court in|the case of.GKN Driveshafts (India) Ltd., Vs. IncomeTax Officer & Ors}reported in(2003) 179 CTR (SC) 11held as under: | We see no justifiable reason to interferewith the order under challenge. However, we|clarify that when a notice under s. 148 of the|IT Act is issued, the proper course of actionfor the noticee is to file return and if he sodesires, to seek reasons for issuing notices.|The AO is bound to furnish reasons within areasonable time. On receipt of reasons, thenoticee is entitled to file objections to issuanceof notice and the AO is bound to dispose of|the same by passing a speaking order. In the|instant case, as the reasons have beendisclosed in these proceedings, the AO has to|dispose of the objections, tiffiled, by passing a|Speaking order, before proceeding with the|assessment in respect of the abovesaid five|assessment years. 3.Having regard to the principle laid down by.the Apex Court in the aforesaid decision, petitioner has a remedy before the Assessing Officer to furnish its/hisobjection to the notice. On receipt of such objection,|Assessing Officer is bound to pass a speaking order.|When the petitioner has remedy as is evident from the|notice, the petitions are premature. Accordingly, writ|petitions stand dismissed as not maintainable. | 4The petitioner is permitted to submit its/his|explanation before the competent authority within a|period of six weeks from the date of receipt of this order.The competent authority is hereby directed to examine|the show cause notice read with the explanation of the|petitioner before passing a speaking order. If the|statutory provision provides for oral hearing, the same|shall be extended to the petitioner. — BS od/-|JUDGE.