Google Ireland Limited, Ireland V. Joint Commissioner of Income Tax (OSD) International Taxation, Circle-1(1), Bangalore

ITA 166/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3193 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V ARVIND
• Keywords: Application of stay; Set aside
• Section: 143(3); 144C; 92CA

Judgement Text

IT(IT)A NO.166/BANG/2021 GOOGLE IRELAND LIMITED, IRELAND IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER IT(IT)A NO.166/BANG/2021 ASSESSMENT YEAR:2007-08 GOOGLE IRELAND LIMITED GORDON HOUSE, BARROW STREET DUBLIN4, D04 E5W5 IRELAND PAN NO :AADCG7672A VS. JCIT (OSD) INTERNATIONAL TAXATION CIRCLE-1(1) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI DEEPAK CHOPRA, A.R. RESPONDENT BY : SHRI K.V. ARVIND, D.R. DATE OF HEARING : 20.10.2021 DATE OF PRONOUNCEMENT : 20.10.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HA FILED THIS APPEAL CHALLENGING THE A SSESSMENT ORDER DATED 22.3.2021 PASSED BY THE A.O. FOR ASSESS MENT YEAR 2007-08 U/S 143(3) R.W.S. 254 R.W.S. 92CA & 144C OF THE INCOME- TAX ACT,1961 ['THE ACT' FOR SHORT]. 2. THOUGH THE ASSESSEE HAS RAISED MANY GROUNDS OF M ERITS OF VARIOUS ADDITIONS MADE IN THE ASSESSMENT ORDER, THE LD. A.R. SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER IS NON -EST IN THE EYES OF LAW IN VIEW OF THE DECISION RENDERED BY THE HONBLE HIGH COURT OF KARNATAKA IN IT APPEAL NO.506/2018. IT(IT)A NO.166/BANG/2021 GOOGLE IRELAND LIMITED, IRELAND PAGE 2 OF 5 3. THE LD. A.R. SUBMITTED THAT THE FACTS RELATING T O HIS CASE HAS BEEN CAPTURED BY THE COORDINATE BENCH OF TRIBUNAL I N S.P. NO.54/BAG/2021 DATED 3.9.2021 AS UNDER: 2. THIS CASE HAS GOT A CHEQUERED HISTORY. THE AO HAD INITIALLY PASSED THE ASSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATI ON, IN PURSUANCE OF DIRECTIONS GIVEN BY LD DISPUTE RESOLUTION PANEL (DR P), WHEREIN AN INCOME OF RS.93.66 CRORES WAS ASSESSED AS ROYALTY. CONSEQ UENT THERETO A DEMAND RAISED UPON THE ASSESSEE. THE ASSESSEE CHALLENGED THE ABOVE SAID ASSESSMENT ORDER BY FILING APPEAL BEFORE THE ITAT, WHICH WAS NUMBERED AS IT(IT)A NO.2845/BANG/2017. THE ABOVE SAID APPEAL W AS DISPOSED OF BY THE TRIBUNAL ALONG WITH SOME OTHER APPEALS; VIDE CO MMON ORDER DATED 11- 05-2018 BY RESTORING ALL THE MATTERS TO THE FILE OF THE AO WITH THE DIRECTION TO REFRAME THE ASSESSMENT IN THE LIGHT OF OBSERVATI ONS MADE BY THE TRIBUNAL AND ALSO IN ACCORDANCE WITH LAW. 2.1 SINCE ALL THE MATTERS WERE RESTORED TO THE FILE OF THE AO, THE ASSESSING OFFICER PASSED A FRESH DRAFT ASSESSMENT O RDER FOR THE YEAR UNDER CONSIDERATION ON 26.12.2019. THE ASSESSEE FILED IT S OBJECTIONS BEFORE LD DRP, WHICH GAVE ITS DIRECTIONS ON 15.2.2021. ACCOR DINGLY, THE ASSESSING OFFICER PASSED FINAL ASSESSMENT ORDER ON 22.3.2021, WHEREIN HE RAISED A DEMAND OF RS.37.72 CRORES. THE ASSESSEE CHALLENGED THE FINAL ASSESSMENT ORDER BY FILING APPEAL BEFORE THE TRIBUNAL ON 19-04 -2021 ALONG WITH THE PRESENT STAY APPLICATION. THE SAID APPEAL HAS BEEN NUMBERED AS IT(IT)A NO.166/BANG/2021. 3. IN THE MEAN TIME, THE ASSESSEE CHALLENGED THE ORDER PASSED BY THE TRIBUNAL ON 11.05.2018 IN IT(IT)A NO.2845/BANG/2017 BY FILING APPEAL BEFORE HONBLE HIGH COURT OF KARNATAKA. THE SAID A PPEAL WAS NUMBERED AS ITA 506/2018. THE APPEAL SO FILED CAME TO BE DI SPOSED OF BY THE HONBLE HIGH COURT, VIDE ITS COMMON ORDER DATED 17 TH APRIL, 2021 ALONG WITH OTHER APPEALS FILED BY A GROUP COMPANY NAMED M /S GOOGLE INDIA PRIVATE LTD. THE HONBLE HIGH COURT PASSED FOLLOWI NG ORDER:- 36. NET RESULT IS, ITA NOS.502/2018, 505/2018, 54 9/2018, 550/2018, 504/2018, 503/2018, 507/2018, 560/2018, 5 62/2018, 561/2018, 563/2018, 564/2018 AND 506/2018 ARE ALLOWED. THE ORDER PASSED BY THE TRIBUNAL IN THE SAID APPEALS AR E SET ASIDE AND THE MATTERS ARE REMANDED BACK TO THE TRIBUNAL TO DE CIDE THE APPEALS AFRESH IN ACCORDANCE WITH LAW. THE PARTIES WILL APPEAR BEFORE THE TRIBUNAL ON 3.5.2021 AND WITHIN A PERIOD OF 15 DAYS THE APPELLANT SHALL BE FREE TO FILE THE DOCUMENTS/ADDIT IONAL DOCUMENTS IN SUPPORT OF HIS CONTENTIONS AND THE REVENUE SHALL ALSO BE FREE TO FILE DOCUMENTS/ADDITIONAL SUBMISSIONS IN SUPPORT OF THEIR IT(IT)A NO.166/BANG/2021 GOOGLE IRELAND LIMITED, IRELAND PAGE 3 OF 5 CONTENTIONS. IN CASE ANY OTHER MATERIAL IS BEING R ELIED UPON BY THE TRIBUNAL, THE SAME SHALL ALSO BE MADE AVAILABLE TO THE ASSESSEE/APPELLANT AS WELL AS TO THE COUNSEL FOR RE VENUE BEFORE PASSING A FINAL ORDER. THE TRIBUNAL IS REQUESTED T O MAKE ALL POSSIBLE ENDEAVOUR TO DECIDE THE MATTERS AT AN EARL IER DATE. 4. THE LD A.R SUBMITTED THAT THE ASSESSING OFFIC ER HAS PASSED THE IMPUGNED ASSESSMENT ORDER IN ORDER TO GIVE EFFECT T O THE ORDER PASSED BY THE TRIBUNAL. HOWEVER, THE SAID ORDER OF THE TRIBU NAL HAS SINCE BEEN SET SIDE BY THE HONBLE HIGH COURT OF KARNATAKA. ACCOR DINGLY, HE SUBMITTED THAT THE ENTIRE TAX DEMAND RAISED ON THE ASSESSEE B Y THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE SET ASIDE. HE SUBM ITTED THAT, ON THIS REASONING ALONE, THE ASSESSEE DESERVES FULL STAY OF THE OUTSTANDING DEMAND. HE FURTHER SUBMITTED THAT THE ASSESSEES APPEAL DES ERVES TO BE ALLOWED ON MERITS ALSO. 4. THE LD. A.R. SUBMITTED THAT THE A.O. HAS PASSED THE IMPUGNED ORDER IN ORDER TO GIVE EFFECT TO THE ORDER DATED 11.5.2018 PASSED BY THE TRIBUNAL AND THE SAID ORDER OF THE TRIBUNAL HAS SINCE BEEN SET ASIDE AND RESTORED TO T HE FILE OF THE TRIBUNAL BY HONBLE HIGH COURT OF KARNATAKA, MEANIN G THEREBY, THE INITIAL APPEAL FILED BEFORE THE TRIBUNAL AGAINS T THE ORIGINAL ASSESSMENT ORDER HAS BEEN REVIVED. SINCE THE ORDER DATED 11.5.2018 PASSED BY THE TRIBUNAL HAS BEEN SET ASIDE BY THE HONBLE HIGH COURT OF KARNATAKA, THE IMPUGNED ASSES SMENT ORDER PASSED TO GIVE EFFECT TO THE ORDER DATED 11.5 .2018 PASSED BY THE TRIBUNAL BECOME NON-EST IN THE EYES OF LAW. ACCORDINGLY, HE PLEADED THAT THE IMPUGNED ASSESSMENT ORDER SHOUL D BE QUASHED. 5. THE LD. D.R. DID NOT OBJECT TO THE FACTUAL ASPEC TS PRESENTED BY LD. A.R. HE SUBMITTED THAT THE A.O. HAS BROUGHT OUT MANY ASPECTS IN THE IMPUGNED ASSESSMENT ORDER AND ACCORD INGLY SUBMITTED THAT THE REVENUE SHOULD NOT BE PRECLUDED FROM PRESENTING THOSE FACTS/ASPECTS BEFORE THE TRIBUNAL WHEN THE EARLIER APPEAL IS HEARD AFRESH. IT(IT)A NO.166/BANG/2021 GOOGLE IRELAND LIMITED, IRELAND PAGE 4 OF 5 6. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE R ECORD. WE FIND MERIT IN THE SUBMISSIONS MADE BY LD. A.R. IT IS AN ADMITTED FACT THAT THE IMPUGNED ASSESSMENT ORDER HAS BEEN PA SSED BY THE A.O. IN ORDER TO GIVE EFFECT TO THE ORDER DATED 11. 5.2018 PASSED BY THE TRIBUNAL IN IT(IT)A NO.2845/BANG/2017. THE ABO VE SAID ORDER OF THE TRIBUNAL HAS SINCE BEEN SET ASIDE BY THE HON BLE HIGH COURT OF KARNATAKA AND THE ENTIRE MATTERS HAVE BEEN RESTO RED TO THE FILE OF THE TRIBUNAL TO DECIDE THE APPEAL AFRESH IN ACCORDA NCE WITH LAW. HENCE, THE IMPUGNED ASSESSMENT ORDER DOES NOT HAVE LEGS TO STAND ON ITS OWN, SINCE IT IS NON-EST IN THE EYES OF LAW. 7. WE NOTICE THAT THE HONBLE HIGH COURT OF KAR NATAKA, WHILE RESTORING THE MATTERS TO THE FILE OF THE TRIBUNAL, HAS MADE IT CLEAR THAT BOTH THE PARTIES ARE ENTITLED TO MAKE FRESH SU BMISSIONS AND ALSO ENTITLED TO FILE ADDITIONAL DOCUMENTS IN SUPPO RT OF THE CONTENTIONS. HENCE THE PRAYER OF LD D.R HAS ALREAD Y BEEN ADDRESSED BY HONBLE HIGH COURT. ACCORDINGLY, ALL T HE ISSUES ARE KEPT OPEN. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH OCT, 2021 SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 20 TH OCT, 2021. VG/SPS IT(IT)A NO.166/BANG/2021 GOOGLE IRELAND LIMITED, IRELAND PAGE 5 OF 5 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.