Wp/4212/2022 Of Simplilearn Solutions Private Limited v. Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 04 DAY OF MARCH2022 BEFORE THE HON’BLE MR.JUSTICE B.M.SHYAM PRASAD WRIT PETITION NO.4212/2022(T-IT) BETWEEN : SIMPLILEARNSOLUTIONSPRIVATELIMITED MANOJARCADE,NO53/1 24 MAINAND2 SECTOR HSRLAYOUT,HARLKUNTE BANGALORE,KARNATAKA–560102. REPBYITSCHIEFFINANACEOFFICER SRI.KARANDEEPSINGH AGEDABOUT52YEARS R/ATVILLANO.615,ADARSHRETREAT OUTERRINGROAD,DEVARABISANHALLI BENGALURU,KARNATAKA560103 ... PETITIONER (BY SRI.T. SURYANARAYANA, SENIOR ADVOCATE FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND : 1.DEPUTYCOMMISSIONEROFINCOMETAX CIRCLE6(1)(1),BMTCBUILDING KORAMANGALA,BANGALORE–560034 KARNATAKA. 2.PR.COMMISSIONEROFINCOMETAX-2 BMTCBUILDING,KORAMANGALA BANGALORE–560034,KARNATAKA. BMTCBUILDING,KORAMANGALA BANGALORE–560034,KARNATAKA. 3. ADDITIONAL/JOINT/DEPUTY/ASSISTANTCOMMISSIONER OFINCOMETAX/INCOME-TAXOFFICER NATIONALFACELESSASSESSMENTCENTRE C-BLOCK,4 FLOOR,S.P.M.CIVICCENTER NEWDELHI–110001. COMMISSIONER OFINCOMETAX/INCOME-TAXOFFICER NATIONALFACELESSASSESSMENTCENTRE C-BLOCK,4 FLOOR,S.P.M.CIVICCENTER NEWDELHI–110001. 4. DEPUTYCOMMISSIONEROFINCOMETAX TRANSFERPRICING,CIRCLE2(2)(1), BMTCBUILDING,KORAMANGALA BANGALORE–560095,KARANATAKA. ... RESPONDENTS (BY SRI. K.V. ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO i) QUASH THE IMPUGNED ORDER DATED 28.01.2021 PASSED BY R-4 TRANSFER PRICING OFFICER UNDER SECTION 92CA(3) OF THE ACT, VIDE ANNX-A AS BEING ILLEGAL AND UNSUSTAINABLE IN LAW; ii) QUASH THE DRAFT ASSESSMENT ORDER DATED 23.04.2021 PASSED BY R-3 VIDE ANNX-B AS BEING ILLEGAL AND UNSUSTAINABLE IN LAW. iii) QUASH AND SETTING ASIDE DIRECTIONS ISSUED ON 24.01.2022 BY DISPUTE RESOLUTION PANEL UNDER SECTION 144C(5) OF THE AC DATED 24.01.2022 VIDE ANNX-C AS BEING ILLEGAL AND UNSUSTAINABLE IN LAW AND ETC. THIS WRIT PETITION COMING ON FOR PRLIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R The petitioner has impugned the final assessment order dated 17.2.2022 (Annexure-X) and the consequential demand notices as also the Transfer Pricing Officer’s order dated 28.01.2021 (Annexure-A), the draft Assessment Order dated 23.04.2021 (Annexure-B), and the Dispute Resolution Panel’s order dated 24.01.2022 (Annexure-C). 2.Sri T. Suryanarayana, learned Senior counsel for the petitioner, submits that the petitioner is constrained to impugn these orders/demands because the petitioner has not been extended complete opportunity of hearing. The learned Senior Counsel elaborates his submission contending that the fourth respondent – the TPO, upon a reference by the Assessing Officer, extended an opportunity to the petitioner to show cause against certain adjustments. The petitioner filed additional submissions on 29.01.2021 under the bona fide belief that the petitioner had such liberty. However, the fourth respondent passed the impugned order on 28.01.2021 i.e., a day prior even without awaiting complete submissions. The Assessing Officer, before incorporating the TPO’s order on proposed adjustments, had to issue show cause notice as contemplatedunder Section 144(b) of the Income Tax Act before finalizing Draft Assessment Order. But the petitioner is not issued with such notice and the draft Assessment Order (Annexure-B) is issued on 23.04.2021. 3.Sri T. Suryanarayana further submits that the petitioner has availed remedy under Section 144 (b) before the DRP. The petitioner has filed detailed objection on 30.5.2021 and hearing was held on 20.1.2022, and the petitioner was given definite impression that the petitioner could file detailed submissions on 28.01.2022. Again the DRP has issued 3.Sri T. Suryanarayana further submits that the petitioner has availed remedy under Section 144 (b) before the DRP. The petitioner has filed detailed objection on 30.5.2021 and hearing was held on 20.1.2022, and the petitioner was given definite impression that the petitioner could file detailed submissions on 28.01.2022. Again the DRP has issued certain directions to the Assessing Officer which includes the direction to verify certain submissions (partial submissions filed by the petitioner) but without opportunity to the petitioner to complete the submissions. With the petitioner being served with the copy of the order dated 24.01.2022 on 30.01.2022, this writ petition is filed impugning these orders, and upon being served with the final assessment order (Annexure-X) and consequential demand notices, the writ petition is amended to impugn this order and the consequential demands. 4.Sri.T.Suryanarayana argues that the assessment order has been concluded without a complete opportunity to the petitioner and without examining all the submissions, and he is categorical in his submission that if the petitioner’s submission in its entirety is examined, the petitioner’s case will have to be accepted without any adjustments. Sri K.V.Aravind, learned counsel for the respondent is unable to controvert either of the aforesaid two material submissions viz., that the petitioner was not issued with certain statutory notices and that the submissions by the petitioner have not been considered in its entirety. If these two vital circumstances remain undisputed, this Court is of the considered view that the impugned orders cannot be sustained and the proceedings must be recommenced de novo by the Assessing Officer. For the foregoing, the following: ORDER [i] The petition is allowed. The impugned orders dated 28.01.2021 by the fourth respondent, the Draft Assessment Order dated 23.04.2021 by the third respondent and also the order dated 24.01.2022 by the Deputy Resolution Panel, are quashed with liberty to the Assessing Officer to commence de novoproceedings in accordance with law with due opportunity to the petitioner. [ii] It would be needless to observe in the instant case that the petitioner shall be extended personal hearing if requested and wherever is permissible in law. Sd/- JUDGE SA/- Ct:sr