M/S WIPRO GE HEALTHCARE PVT LTD V. DEPUTY COMMISSIONER OF INCOME TAX

WP/1189/2018

AI Insights

The case involves M/s Wipro GE Healthcare Pvt Ltd, which challenged an assessment order dated 28.11.2017 for the Assessment Year 2010-11, issued by the Deputy Commissioner of Income Tax, Bengaluru. The petitioner argued that the assessment was based on a misinterpretation of a previous remand order from the Income Tax Appellate Tribunal, which required a fresh consideration of the issues. The respondents contended that the petitioner had an alternate remedy of appeal, which the court found insufficient to bar the writ jurisdiction due to the demonstrable error of law in the assessment order.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 697591 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 11-02-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: ANURADHA R
• Keywords: Arms' length price; Assessment Order; Dispute Resolution Panel; Income Tax; International Transactions; Writ petition
• Section: 143(2); 92CA; 144C(5)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF FEBRUARY, 2020 BEFORE THE HON’BLE MR. JUSTICE KRISHNA S.DIXIT WRIT PETITION NOS.1189 OF 2018 (T-IT) BETWEEN: M/S WIPRO GE HEALTHCARE PVT LTD, NO.4, KADUGODI INDUSTRIAL AREA, WHITEFIELD BANGALORE-560067. REPRESENTED BY ITS AUTHRIZED SIGNATORY, SHRI KEDAR KULKARNI. …PETITIONER (BY SMT. ANURADHA S R, ADVOCATE) AND: 1. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(2), BENGALURU. 2. GOVERNMENT OF INDIA, MINISTRY OF FINANCE, INCOME TAX DEPARTMENT, 7TH FLOOR, INCOME TAX OFFICE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU – 560 001. ... RESPONDENTS (BY SRI. K V ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 28.11.2017 FOR A/Y 2010-11 PASSED BY THE R-1 ANNEXURE-A AND ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: 2 ORDER Petitioner being a Corporate Assessee engaged in the business of providing software services & technology solutions to its parent company for the products manufactured worldwide is knocking at the doors of Writ Court for assailing the Assessment Order dated 28.11.2017, made by the first respondent at Annexure-A for the Assessment Year 2010-11 whereupon the demand for payment of tax so assessed has been raised vide Demand Notices both dated 28.11.2017 at Annexures A1 & A2. 2. After service of notice, respondents having entered appearance through their Sr. Panel Counsel resist the writ petition making submission in justification of the impugned order; it is also submitted that the petitioner has got an alternate remedy of appeal and therefore, it should be relegated thereto. 3. Having heard the learned counsel for the parties and having perused the petition papers, this Court grants reprieve to the petitioner for the following reasons: a) the return of income filed by the petitioner for the Assessment Year 2010-11 was selected for scrutiny by issue 3 of Notice under Section 143(2) of the Income Tax Act, 1961; since the value of international transactions of the petitioner exceeded the prescribed limit, a reference was made to TPO for determining the Arms Length Price of the subject international transactions entered with the associated enterprises of the petitioner; the TPO passed an order u/s 92CA of the Act determining the ALP adjustment that was added to the returned income along with certain statutory allowances; accordingly, the draft Assessment Order having been made on 24.03.2014 was objected to by the petitioner in Form 35A filed before the Dispute Resolution Panel; the DRP issued directions u/s 144C (5) of the Act on 12.12.2014 which resulted into the Assessing Officer making a final Assessment vide order dated 30.01.2015; b) the petitioner went in appeal to the Income Tax Appellate Tribunal which partly allowed the appeal vide order dated 18.09.2015 remanding the matter for consideration afresh; the operative portion of the order reads as under: “ 5. Having gone through the record before us, as recorded above, we find that even during the relevant assessment year, the assessee had made elaborate submissions and both the TPO as well as the DRP have failed to consider the said objections objectively. In view of the same, we deem it fit and proper to remit this issue to the file of the A.O/TPO 4 for reconsideration of the issue in accordance with law. The A.O./TPO is directed to give fair opportunity of hearing to the assessee and also consider judicial precedents on, the issue including the orders of the Tribunal in assessee’s own case while determining the ALP.” The text and context of this order unquestionably leads one to the conclusion that it is an open remand and therefore, the mandatory procedure prescribed u/s 144C(1) of the Act ought to have been followed by passing a draft order and by giving an opportunity to the petitioner to file his objections thereto whereupon matter may go before the DRP; however, the impugned order of Assessment has been made on a wrong assumption that the remand order did not expect any judicious determination of the matter remanded, when it is plainly otherwise; thus, there is a gross error apparent on the face of the record warranting indulgence of this Court for setting it right; and, c) the contention of the Revenue that the petitioner has got an alternate remedy of appeal and therefore, it should be relegated to the Appellate body does not much impress the Court; the argument of alternate remedy does not bar the writ jurisdiction of this Court when the impugned order has a demonstrable error of law resulting into prejudice to the 5 Assessee; nothing is stated as to how the Revenue would be affected by the invocation of writ jurisdiction by the Assessee when full opportunity is given to both the sides; added to this, what difference an appeal would have made to the matter is also not forthcoming. In the above circumstances, this writ petition is allowed in part; a Writ of Certiorari issues quashing the impugned orders and the consequential Demand Notices; the matter is remitted to the first respondent for consideration afresh i.e, for judicious determination, in accordance with law, after hearing the petitioner or its agent. All contentions of the parties are kept open. No costs. Sd/- JUDGE Bsv "