M/S REDINGTON DISTRIBUTION PVT. LTD. V. THE DEPUTY COMMISSIONER OF INCOME-TAX

WP/30344/2019

AI Insights

The case involves M/s. Redington Distribution Pvt. Ltd., a private company incorporated under the laws of Singapore, which received consideration for the sale of software/licenses from M/s. Wipro Limited. The company did not file a return of income for the assessment year 2010-11, believing it was not taxable in India. However, the Deputy Commissioner of Income-Tax (International Taxation) treated these payments as royalty and issued a notice under Section 148 of the Income Tax Act, 1961, considering the income as escaped. The petitioner contested the order, citing a lack of proper notice and referencing a recent Supreme Court judgment that could affect the interpretation of the law regarding such transactions. The High Court, acknowledging the need for a re-evaluation in light of the Supreme Court's decision, set aside the previous order and remanded the case for further proceedings.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 691507 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 02-02-2022
• Assessment Year: misc
• Other Referred Cases: CIT v. Samsung Electronics Ltd., Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: VIKRAM
• Keywords: Assessment Year 2010-11; Escaped income; Notice under section 148; Royalty; Writ of Certiorari; Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax
• Section: 147; 148; 144; 143(3)

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF FEBRUARY 2022 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.30344/2019 (T-IT) BETWEEN: M/S. REDINGTON DISTRIBUTION PVT. LTD., NO.60, ROBINSON ROAD, #12-02, BEA BUILDING SINGAPORE - 068 892 REP. BY ITS HEAD OF FINANCE AND ACCOUNTS P.S. JAYAPRAKASH. … PETITIONER (BY SRI VIKRAM, ADVOCATE FOR SMT. VANAJA M.R., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOMET-TAX (INTERNATIONAL TAXATION) CIRCLE-2(1) 6TH BLOCK, 80 FEET ROAD KORAMANGALA BENGALURU - 560 034. … RESPONDENT (BY SRI K.V. ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER PASSED BY THE RESPONDENT DATED 17.12.2018 UNDER SECTION 143(3) READ WITH 147 & 144 THE ACT FOR THE ASSESSMENT YEAR 2010-11 VIDE ANNEXURE-B AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: 2 ORDER The petitioner has sought for issuance of writ of certiorari to quash the impugned order passed by the respondent dated 17.12.2018 under Section 143 (3) r/w 147 and 144 of the Income Tax Act, 1961 (\"the Act\", for short) for the assessment year 2010-11 and has sought for other appropriate reliefs. 2. The petitioner is stated to be a private company incorporated under the laws of Singapore and has received certain consideration for the sale of software/licences relating to development of software from M/s.Wipro Limited. It is further submitted that as the petitioner bonafide believed that it was not taxable in India, it did not file return of income for the assessment year 2010-11. However, it is stated that the respondent has construed the payments to be royalty and was of the stand that the income of the petitioner was to be treated as escaped income for the assessment year 2010-11 and has issued notice under Section 148 of the Income Tax Act. 3 3. The petitioner submits that it has not received such notice nor further notice. It is further submitted that the petitioner had received only notice dated 05.09.2018 sent to the Holding Company M/s. Redington (India) Limited for which petitioner has replied and furnished correct address. 4. It is submitted that the stand of the Assessing Officer was on the basis of the judgment of this court in CIT v. Samsung Electronics Ltd. reported in 320 ITR 209 and that in light of the latest judgment of the Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax reported in [2021] 125 taxmann.com 42 (SC) the matter requires to be relooked into. 5. Taking note of the plea of the petitioner that fresh opportunity needs to be given and also the contention regarding latest judgment of the Apex Court in the case of Engineering Analysis Centre (supra), without entering into the merits of the issue, it would meet the ends of justice in setting aside the order at Annexure-'B' and 4 restoring the proceedings to the stage immediately after post-issuance of notice under Section 148 of the Act. 6. Accordingly, the assessment order at Annexure-'B' is set aside. The matter is relegated as observed above. The petitioner is at liberty to participate in the proceedings and raise all further contentions available to the petitioner including regarding position of law as emanating from the case of Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax reported in [2021] 125 taxmann.com 42 (SC). 7. Accordingly, the petition is disposed off subject to the above observations. All contentions of the parties are kept open. 8. The petitioner undertakes to file the return pursuant to the notice under Section 148 of the Act. If the same is filed within a period of 30 days from the date of release of this order, the same could be taken as filed within time. 5 Accordingly, the petition is disposed off, in light of the discussion made above. Sd/- JUDGE Np/- "