QUEST GLOBAL ENGINEERING SERVICES PVT.LTD. V. THE PRINCIPAL COMMISSIONER OF INCOME TAX HUBLI

WP/101642/2023

AI Insights

The case involves Quest Global Engineering Services Pvt. Ltd., the petitioner, who challenged a notice issued by the Principal Commissioner of Income Tax, Hubli, the respondent. The notice sought to revise an earlier order determining the Arms Length Price for the assessment year 2002-03, which was perceived as beneficial to the assessee and adverse to the revenue's interest. The petitioner argued that the notice was issued beyond the two-year limitation period prescribed under Section 263 of the Income Tax Act for revising orders prejudicial to the revenue. The court agreed with the petitioner, noting that the notice was indeed issued beyond the permissible time frame, leading to the setting aside of the notice and disposal of the writ petition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 752685 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 29-03-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: T SURYYANARAYANA; NANDISH PATIL; TANMAYEE RAJKUMAR; MANASA ANANTAN
• Keywords: Arms' length price; Income Tax; Limitation; Revision of Orders; Writ petition
• Section: 263; 226; 227

Judgement Text

" - 1 - WP No. 101642 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 29TH DAY OF MARCH, 2023 BEFORE THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO. 101642 OF 2023 (T-IT) BETWEEN: QUEST GLOBAL ENGINEERING SERVICES PVT.LTD. AEQUS SPECIAL ECONOMIC ZONE, NO. 437A, PLOT NO.2, THANA HATTARGU S.O. HUKKERI, BELGAUM-591243, REPRESENTED BY HEREIN BY ITS GENERAL MANAGER … PETITIONER (BY SRI. T. SURYYANARAYANA; SEINIOR ADVOCATE FOR NANDISH PATIL, TANMAYEE RAJKUMAR & MANASA ANANTAN, ADVOCATES) AND: THE PRINCIPAL COMMISSIONER OF INCOME TAX, HUBLI C.R. BUILDING, NAVANAGAR, HUBBALLI-580025. … RESPONDENT (BY SRI. Y.V. RAVIRAJ, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO,. QUASHING THE NOTICE DATED 01.02.2023 BEARING DIN NO.ITBA/REV/F/ REVI/2022-23/ 1049303607(1) (ANNEXURE- E) ISSUED BY THE RESPONDENT UNDER SECTION 263 OF THE ACT FOR THE ASSESSMENT YEAR 2002-03. VISHAL NINGAPPA PATTIHAL Digitally signed by VISHAL NINGAPPA PATTIHAL Location: Dharwad Date: 2023.03.30 10:25:10 +0530 - 2 - WP No. 101642 of 2023 THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER 1. Petitioner is a Private Limited Company and is assessed for income tax. In respect of the assessment year 2002-03, the jurisdictional Transfer Pricing Officer passed an order dated 31.03.2017, determining the Arms Length Price. The said order is perceived as beneficial to the assessee and adverse to the interest of revenue by the respondent. Hence, he has issued the impugned notice bearing No.ITBA/REV/F/REV1/2022-23/1049303607(1) dated 01.02.2023 vide annexure-E to the writ petition seeking to revise the proceedings by invoking his powers under Section 263 of the Income Tax Act (for short ‘the Act’). Aggrieved by the same, the present writ petition is filed. 2. The case of the petitioner is that any order under Section 263 of the Act, has to be passed within two years from the end of the financial year regarding which the order sought to be revised was passed and in the - 3 - WP No. 101642 of 2023 instant case the order sought to be revised was passed on 31.03.2017 and the same is sought to be revised by issuing a notice on 01.02.2023 by the respondent. 3. Section 263 of the Act deals with Revision of orders prejudicial to the revenue. Section 263 (2) reads as under: “263. (1) XXXXXX (2) No order shall be made under sub- section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.” Thus, any order under Section 263 of the Act can be passed only within two years from the date of the order sought to be revised. 4. In the instant case admittedly the order sought to be revised is dated 31.03.2017 and the impugned notice is issued on 01.02.2023 and the proceedings contemplated as per the notice is liable to be set aside on the ground of limitation. Hence the following: - 4 - WP No. 101642 of 2023 ORDER i) The impugned notice bearing No.ITBA/ REV/ F/ REV1/ 2022-23/ 1049303607(1), dated 01.02.2023 issued by the respondent vide Annexure-E to the writ petition is hereby set aside. ii) The writ petition is disposed off accordingly. Sd/- JUDGE RHR/- List No.: 1 Sl No.: 52 "