CIT International Taxation Vs Cisco Systems Services B.V. (Karnataka High Court)
The Karnataka High Court dismissed three appeals filed by the Revenue and upheld the orders of the Income Tax Appellate Tribunal (ITAT), which had quashed the reassessment orders passed against the assessee for Assessment Years 2011-12, 2012-13, and 2013-14. The central issue before the Court was whether the Assessing Officer (AO) had followed the mandatory procedure prescribed under Section 144C of the Income-tax Act, 1961, while passing reassessment orders in the case of an eligible assessee.
The assessee, a company incorporated and registered in Amsterdam with a branch office in India, was engaged in providing technical advanced professional engineering and consultancy services. For Assessment Year 2011-12, the assessee had filed its return declaring income of ₹17.92 crore. According to the Revenue, the original assessment under Section 143(3) had been completed and the case was subsequently reopened under Section 147 based on information gathered during a survey. On December 28, 2018, the AO issued what was described as a draft assessment order under Sections 147 read with 144C. The assessee filed objections before the Dispute Resolution Panel (DRP), which issued directions on September 23, 2019. Thereafter, the AO passed a final assessment order on October 15, 2019, making additions of ₹78.76 crore while retaining earlier additions. The assessee challenged the assessment before the ITAT, which allowed the appeals.
