Huawei Technologies Cooperatief U.A. Vs ACIT (Delhi High Court)
Delhi HC Quashes Section 148/148A Reassessment Notices for Non-Resident Loan Income, Orders Fresh Assessment
Delhi High Court set aside the reassessment notice and order under Sections 148 and 148A of the Income Tax Act for AY 2019-20, holding that the petitioner’s interest income from External Commercial Borrowings was already taxed under Section 194LC. The Court emphasized that reassessment cannot be triggered solely for non-filing of returns and directed the Assessing Officer to pass a fresh, reasoned order within four weeks after examining all relevant documents and provisions, including Section 115A. The judgment protects non-resident taxpayers from arbitrary notices while ensuring proper inquiry for any genuine escapement of income.
The Delhi High Court has set aside the reassessment order and notice issued by the Assessing Officer (AO) against Huawei Technologies Cooperatief U.A. for the Assessment Year (AY) 2019-20, related to escaped income. The court’s decision was based on the Revenue’s concession that a fresh, reasoned order, taking into account the taxpayer’s submissions, was necessary.
Background of the Dispute
The petitioner, Huawei Technologies Cooperatief U.A., a non-resident entity with no business operations in India, challenged the notice issued under Section 148A(1), the subsequent order under Section 148A(3), and the reassessment notice under Section 148 of the Income-tax Act, 1961, all concerning AY 2019-20.
