SCHNEIDER ELECTRIC INDIA PVT LTD V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 22 2 NEW DELHI & ANR.

W.P.(C)/15215/2024

AI Insights

The case revolves around Schneider Electric India Pvt Ltd, which sought a writ of mandamus to declare the assessment proceedings for AY 2005-06 as barred by limitation and to direct the respondents to grant a refund of taxes along with applicable interest. The petitioner argued that the AO did not pass the required consequential/appeal effect order within the prescribed time after the Income Tax Appellate Tribunal (ITAT) remanded the case, leading to the proceedings being time-barred under Section 153 of the Income Tax Act. The court agreed with the petitioner's contention, referencing similar cases and legal provisions that support the claim of time limitation on assessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 671611 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 09-05-2025
• Assessment Year: misc
• Other Referred Cases: Indian Renewable Energy Development Agency Ltd. v. Pr. CIT(LTU) New Delhi & Anr.: 2023 SCC Online Del 8357, Aricent Technologies (Holdings) Ltd. v. Assistant Commissioner of Income Tax & Anr.: Neutral citation: 2023/DHC/001521
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PUNEET RAI; ASHVINI KUMAR; GIBRAN NAUSHAD; RISHABH NANGIA
• Assessee Lawyers: SACHIT JOLLY; MANSHA ANAND; ABHYUDAYA BAJPAI; ADITYA RATHORE; SOHUM DUA
• Keywords: Assessment proceedings; Barred by limitation; Consequential Order; Foreign exchange fluctuation; Mandamus; Refund of taxes; Time barred; Transfer pricing
• Section: 143(3); 143(2); 143(1); 153; 244A(1A); 244A(1)

Judgement Text

" W.P.(C) 15215/2024 Page 1 of 5 $~11 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 09.05.2025 + W.P.(C) 15215/2024 SCHNEIDER ELECTRIC INDIA PVT LTD .....Petitioner Through: Mr. Sachit Jolly, Sr. Advocate with Mr. Mansha Anand, Mr. Abhyudaya Shankar Bajpai, Mr. Aditya Rathore and Mr. Sohum Dua, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 22 2 NEW DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar, Mr. Gibran Naushad and Mr. Rishabh Nangia, JSCs for Income Tax Department. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA VIBHU BAKHRU, J. (Oral) 1. The petitioner has filed the present petition, inter alia, praying as under:- “issue a writ in the nature of mandamus or any other appropriate writ, order or direction declaring that the assessment proceedings for AY 2005-06 are barred by limitation therefore, direct the Respondents to grant refund of taxes paid/ deposited/adjusted in the case of Petitioner for AY 2005-06, along with applicable interest under Section 244A(1) and 244A(1A) of the Act, as per law;” 2. The petitioner is a company incorporated in India and is a 100 percent subsidiary of Schneider France. During the previous year relevant to Digitally Signed By:RAM KUMAR Signing Date:20.05.2025 12:40:48 Signature Not Verified W.P.(C) 15215/2024 Page 2 of 5 Assessment Year [AY] 2005-06, the petitioner was engaged in the business of manufacturing low voltage and medium voltage equipments – Air Circuit Breakers (ACB), Miniature Circuit Breakers, Moulded Case Circuit Breakers, RM 6, Contractors, Push Buttons and Ring Master units. The petitioner was also engaged in the distribution of imported electric equipments mainly for industrial use; repair and maintenance services; implementation and development of ERP packages; e-content/e-catalogue services, research and development services; and business support services. 3. The petitioner had filed its return of income for AY 2005-06 on 30.10.2005, declaring a total income of ₹33,80,05,396/-. The petitioner’s income was processed under Section 143(1) of the Income Tax Act,1961 [Act] on 08.03.2006. It was thereafter selected for scrutiny and a notice under Section 143(2) of the Act was issued to the petitioner. 4. On 10.12.2008, the Assessing Officer [AO] passed the assessment order under Section 143(3) of the Act assessing the petitioner’s income at ₹47,44,85,110/- after making the addition of ₹12,92,73,711/- on account of transfer pricing and ₹72,06,000/- on account of loss of foreign exchange fluctuation. 5. The petitioner appealed the said assessment order before the Commissioner of Income Tax (Appeals)-XX [CIT(A)], impugning the additions made by the AO. The learned CIT(A), by the order dated 23.09.2009, partly allowed the petitioner’s appeal and deleted the addition made on account of loss of foreign exchange. Digitally Signed By:RAM KUMAR Signing Date:20.05.2025 12:40:48 Signature Not Verified W.P.(C) 15215/2024 Page 3 of 5 6. Pursuant to the order passed by the learned CIT(A), the AO recomputed the petitioner’s income and passed an order dated 05.02.2010 under Section 250 of the Act. The said order is set out below: - “Order u/s 250 of Income Tax – Act 1961 Consequent upon the order passed by the Ld. CIT(A) vide order No. 28/08-09 dated 23.09.2009, the income of the assessee is recomputed as under:- Assessed income u/s 143(3) dated 10.12.2008 474,485,107/- Less: Relief allowed by Ld. CIT(A) on a/c of: Loss on foreign exchange fluctuation 72,06,000/- Revised assessed income (474485107 – 7206000) 467,279,107 r/o 467,279,110” 7. The petitioner challenged the CIT(A)’s order before the learned Income Tax Appellate Tribunal [ITAT] in ITA No.4492/Del/2009. The learned ITAT allowed the said appeal for statistical purposes by the order dated 11.01.2016, and directed the AO to consider the contentions raised by the petitioner afresh. 8. It is the petitioner’s contention that pursuant to the order dated 11.01.2016 passed by the learned ITAT, the AO was obligated to pass the consequential/appeal effect order, latest by 31.12.2018, adjudicating the Digitally Signed By:RAM KUMAR Signing Date:20.05.2025 12:40:48 Signature Not Verified W.P.(C) 15215/2024 Page 4 of 5 issues that were remanded by the learned ITAT. However, despite the lapse of more than six (6) years from the date of the learned ITAT’s order, the AO has failed to pass the said consequential/appeal effect order. As a result, the proceedings before the AO have become time-barred under Section 153 of the Act. Consequently, the returned income as filed by the petitioner stands accepted under law. In view of the above, the petitioner, vide a letter dated 10.07.2019 (submitted on 11.07.2019), requested the AO to release the due income tax refund along with applicable interest in accordance with law. 9. The petitioner by the letter dated 10.03.2021 (submitted on 12.03.2021), requested the AO to pass the consequential order after deleting the addition of ₹12,92,73,711/- and to grant the resultant refund of tax due to the petitioner along with applicable interest under Sections 244A(1) and 244A(1A) of the Act, in accordance with law. However, the AO has neither processed the refund nor has issued any further communication in this regard. 10. The learned counsel for the petitioner contends that in terms of the provisions of sub-sections (2A) and (3) of Section 153 of the Act, as were in force prior to their substitution by the Finance Act, 2016 with effect from 01.06.2016, the time limit for passing an order giving effect to the findings or directions contained in an appellate order, including those issued by the learned ITAT, was one year from the end of the financial year in which the order under Section 250 or Section 254 was received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Digitally Signed By:RAM KUMAR Signing Date:20.05.2025 12:40:48 Signature Not Verified W.P.(C) 15215/2024 Page 5 of 5 11. According to the petitioner, the period to pass the order on remand by the learned ITAT expired on 31.12.2018, however, no order was passed by the AO till the date. Thus, the assessment proceedings in respect of AY 2005-06 are time barred. 12. Concededly, the issue is covered by the decision of this court in Indian Renewable Energy Development Agency Ltd. v. Pr. CIT(LTU) New Delhi & Anr.: 2023 SCC Online Del 8357 and the decision in Aricent Technologies (Holdings) Ltd. v. Assistant Commissioner of Income Tax & Anr.: Neutral citation: 2023/DHC/001521. 13. The time period for passing the assessment order has since lapsed and, therefore, the return filed by the petitioner is required to be considered as accepted. 14. The Revenue shall process the petitioner’s claim for refund in accordance with law, bearing in mind the aforesaid position as expeditiously as possible, preferably within a period of twelve weeks from date. 15. The petition is disposed of in the aforesaid terms. VIBHU BAKHRU, J TEJAS KARIA, J MAY 09, 2025 RK/KS Click here to check corrigendum, if any Digitally Signed By:RAM KUMAR Signing Date:20.05.2025 12:40:48 Signature Not Verified "