M/S WIPRO ENTERPRISES PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOM-TAX

WP/61783/2016

AI Insights

The case involves Wipro Enterprises Private Limited, which filed a writ petition against the order passed by the Deputy Commissioner of Income-Tax Transfer Pricing-2(2)(2) and the Assistant Commissioner of Income-Tax Circle-7(1)(2). The petitioner challenged the order under Section 92CA of the Income Tax Act, 1961, and the penalty proceedings under Section 271G for alleged failure to maintain documentation under Section 92D concerning transactions with subsidiaries. The petitioner argued that the order violated principles of natural justice as no show cause notice was issued prior to the order, and that the TPO failed to consider relevant statutory provisions and judicial precedents. The respondents contended that the petitioner was given sufficient opportunities to present their case but failed to do so.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690203 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-02-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax-3 vs M/s. Thyssen Krupp Industries India Pvt. Ltd., Commissioner of Income Tax vs Tara Jewels Exports Pvt. Ltd., Commissioner of Income Tax vs Keihin Panalfa Ltd., CIT vs Petro Araldite Pvt Ltd., CIT vs Hindustan Unilever Ltd., CIT vs ALSTOM Projects India Ltd., CIT vs Phoenix Mecano (India) Pvt. Ltd., CIT-I vs Hindustan Unilever Ltd., CIT vs Phoenix Mecano (India) Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAVI RAJ
• Assessee Lawyers: M
• Keywords: Assessment Year; Documentation; Natural Justice; Penalty proceedings; Transfer pricing
• Section: 92CA; 92D; 271G

Judgement Text

" - 1 - NC: 2024:KHC:5227 WP No. 61783 of 2016 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 61783 OF 2016 (T-IT) BETWEEN: M/S WIPRO ENTERPRISES PRIVATE LIMITED REP BY ITS MANAGER TAXATION, SRI S.B.NAVANEETH, AGED ABOUT 32 YEARS, S/O SRI BASU RANGASWAMY, C BLOCK, CCLG DIVISION, DODDAKANNELLI, SARJAPUR ROAD, BANGALORE – 560 035 …PETITIONER (BY SRI. M LAVA, ANNAMALAI S & SRI.M.LAVA., ADVOCATES) AND: 1. THE DEPUTY COMMISSIONER OF INCOME-TAX TRANSFER PRICING-2(2)(2), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BANGALORE – 560 095 2. THE ASSISTANT COMMISSIONER OF INCOME –TAX CIRCLE-7(1)(2) BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BANGALORE – 560 095 …RESPONDENTS (BY SRI.RAVIRAJ Y.V. & SRI.M DILIP., ADVOCATES) THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY R-1 UNDER SEC. 92 CA OF THE INCOME-TAX ACT, 1961 DATED 28.10.2016 FOR THE ASSESSMENT YEAR 2013-14 HEREIN AT ANNEX-A AND THE PENALTY PROCEEDINGS INITIATED BY R-1 UNDER SEC. 271G OF THE ACT FOR ALLEGED FAILURE TO Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:5227 WP No. 61783 of 2016 MAINTAIN DOCUMENTATION UNDER SEC. 92D IN RESPECT SDT AND THE TRANSACTION OF RECEIPT OF SHARES FROM SUBSIDIARIES / INVESTMENT IN SUBSIDIARIES & ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER In this petition, petitioner is aggrieved by the impugned order passed by the respondent No.1 (Transfer Pricing Officer) – TPO under Section 92 CA of the Income Tax Act, 1961 dated 28.10.2016 and for other reliefs: “a) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the order passed by the Respondent No.1 under section 92 CA of the Income Tax Act, 1961 dated 28.10.2016 for the assessment year 2013- 14 herein marked as Annexure – A and the penalty proceedings initiated by the first respondent under section 271G of the Act for alleged failure to maintain documentation under section 92D in respect SDT and the transaction of receipt of shares from subsidiaries / investment in subsidiaries. b) Declare that order in Annexure – A is in violation of principles of natural justice. c) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.” - 3 - NC: 2024:KHC:5227 WP No. 61783 of 2016 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, Learned counsel for the petitioner submits that non issuance of show cause notice prior to passing the impugned order is violative of principles of natural justice and that the respondent No.1 – TPO committed an error in passing the impugned order without considering or appreciating the relevant statutory provisions as well as the judgment of various High Courts as stated below: 1. Commissioner of Income Tax-3 vs M/s. Thyssen Krupp Industries India Pvt. Ltd., 381 IR 413 2. Commissioner of Income Tax vs Tara Jewels Exports Pvt. Ltd. Order dated 05.10.2025 in ITA No.1814/2013 (HC-Bombay) 3. Commissioner of Income Tax vs Keihin Panalfa Ltd. 381 ITR 407 (Delhi) 4. CIT vs Petro Araldite Pvt Ltd., (Bombay) Order dated 24.11.2015. 5. CIT vs Hindustan Uniliever Ltd., 394 ITR 73 (Bombay) 6. CIT vs ALSTOM Projects India Ltd., 394 ITR 141 (Bombay) - 4 - NC: 2024:KHC:5227 WP No. 61783 of 2016 7. CIT vs Phoenix Mecano (India) Pvt. Ltd., (2019) 414 ITR 704 (Bombay) 8. CIT-I vs Hindustan Unilever Ltd., SLP(C) No.(s) 22381/2017 Order dated 29.10.2018 (SC) 9. CIT vs Phoenix Mecano (India) Pvt. Ltd., SLP (civil) Diary No.2234/2018 Order dated 05.02.2018 (SC). 4. It is submitted that non consideration of the relevant statutory provisions as well as the law laid down by the various High Courts which have been confirmed by the Apex Court would vitiate the impugned order which deserves to be set aside and the matter be remitted back to the respondent No.1 – TPO for reconsideration afresh in accordance with law. 5. Per contra, learned counsel for respondents would submit that there is not merit in the petition and same is liable to be dismissed. It is submitted that sufficient opportunities were granted to the petitioner who did not produce the aforesaid judgments and as such, they are not entitled to any indulgence in the present petition. 6. I have given my anxious consideration to the rival submissions and perused the material on record. - 5 - NC: 2024:KHC:5227 WP No. 61783 of 2016 7. As rightly contended by the learned counsel for the petitioner, the aforesaid judgments relied upon the petitioner which were rendered prior to the impugned order have not been considered by the respondent No.1 – TPO before passing the impugned order which also does not take into account the relevant statutory provisions before passing the impugned order. Under these circumstances, without expressing any opinion on the merit/demerits of the rival contentions and in order to enable the first respondent – TPO to pass fresh orders after consideration of the relevant statutory provisions and the judgments of various High Courts referred to supra, I deem it just and appropriate to set aside the impugned order and remit the matter back to the first respondent for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER (i) Petitioner is hereby allowed. (ii) Impugned order dated 28.10.2016 passed by the respondent No.1 (Transfer Pricing Officer) – TPO under Section 92CA of the Income Tax Act, 1961, is hereby set aside. - 6 - NC: 2024:KHC:5227 WP No. 61783 of 2016 (iii) Matter is remitted back to the respondent No.1 – TPO for reconsideration afresh bearing in mind the aforesaid judgments and the relevant statutory provisions, in this regard. (iv) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. (v) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, case law before the first respondent who shall consider the same and proceed further, in accordance with law. (vi) It is made clear that the respondent shall provide sufficient and reasonable opportunity to the petitioner and hear him and proceed further in the matter. Sd/- JUDGE DHA List No.: 2 Sl No.: 0 "