Case Law Details
Bid Services Division (Mauritius) Limited Vs DCIT (Delhi High Court)
Introduction: In the case of “Bid Services Division (Mauritius) Ltd. Vs DCIT,” the Delhi High Court addressed the suspension of income tax reassessment proceedings until a decision is reached by the Authority for Advance Ruling (AAR). This article provides a detailed analysis of the court’s decision and the circumstances surrounding the case.
Refund Remittance: Mr. Ruchir Bhatia, the learned senior standing counsel representing the respondents/revenue, informed the court that a refund due to the petitioner/assessee has been remitted in compliance with the court’s orders.
Acknowledgment by the Petitioner: Mr. Kamal Sawhney, appearing for the petitioner/assessee, affirmed the receipt of the refund and informed the court that Rs. 95.26 crores had been received.
Fulfillment of Purpose: Mr. Sawhney emphasized that the writ petition had achieved its intended purpose. The impugned notice dated 27.01.2021, issued under Section 148 of the Income Tax Act, 1961, based on a decision dated 10.02.2022 by the Authority for Advance Ruling (AAR), had been set aside by the Bombay High Court through a judgment dated 08.03.2022.
Operative Directions from Bombay High Court: Mr. Bhatia drew attention to the operative directions issued by the Bombay High Court, emphasizing paragraph 79 of the judgment. The said paragraph laid out the course of action for reconsideration by the AAR.
Reconsideration by AAR: Mr. Bhatia argued that since the Bombay High Court had remitted the matter to the AAR for reconsideration, there was a possibility that a decision would be reached by the AAR in the near future.
Suspension of Reassessment Proceedings: Given the circumstances, the argument presented was that the reassessment proceedings, triggered by the impugned notice, should be kept in abeyance until the AAR renders a decision.
Court’s Decision: After hearing both sides, the court concluded that the most prudent course of action at present would be to suspend the reassessment proceedings. The court recommended waiting for the AAR’s decision following the remand order from the Bombay High Court. Subsequently, parties could approach the court for appropriate directions, which might include resuming the reassessment proceedings.
Conclusion: The Delhi High Court’s decision in the case of “Bid Services Division (Mauritius) Ltd. Vs DCIT” involves the suspension of income tax reassessment proceedings until the AAR reaches a decision. This decision reflects the court’s commitment to ensuring fair and just proceedings, awaiting the AAR’s reconsideration, and addressing the matter appropriately once the AAR has rendered its decision.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the respondents/revenue, informs us that pursuant to our order dated 30.05.2023 read with the order dated 25.07.2023, refund due to the petitioner/assessee has been remitted.
2. Mr Kamal Sawhney, who appears on behalf of the petitioner/assessee, affirms this position.
2.1 In this behalf, we are told by Mr Sawhney that Rs.95.26 crores has been received by the petitioner/assessee.
2.2 Furthermore, Mr Sawhney says that this writ petition has served its purpose, inasmuch as the impugned notice dated 27.01.2021 issued under Section 148 of the Income Tax Act, 1961 [in short, “Act”], which was founded on the basis of decision dated 10.02.2022 passed by the Authority for Authority for Advance Ruling [in short, “AAR”] stands set aside by the Bombay High Court via judgment dated 08.03.2022 passed in Writ Petition 713/2021 titled Bid Services Division (Mauritius) Ltd. v Authority for Advance Ruling (Income Tax) and Ors.
3. On the other hand, Mr Bhatia has drawn our attention to the operative directions issued by the Bombay High Court, which was contained in paragraph 79 of the said judgment. For the sake of convenience, the said paragraph is set forth hereafter:
“79. We, accordingly, quash and set aside the Ruling dated 10th February, 2020 passed by the Respondent no.1 Authority for Advance Ruling, and remand the matter back to the Authority for reconsideration of Petitioner’s application in the light of the above discussion, which the Authority shall consider and decide within a period of eight weeks from today after giving an opportunity of hearing to Petitioner and the Revenue Authorities.”
4. Mr Bhatia does say that since the Bombay High Court has remitted the matter to AAR for reconsideration, it is in the realm of possibility that a decision would be rendered by the said authority in the near future.
5. Thus, the argument is that it is only at that juncture the court could examine viability of the reassessment proceeding triggered via the impugned notice.
6. We have heard counsel for the parties.
7. We are of the view that at present, the best way forward would be to keep the reassessment proceeding at abeyance, to await the decision of the AAR upon remand order by the Bombay High Court. As and when the decision is rendered by the AAR, parties can then approach the court for appropriate directions, which may include the direction to reignite the reassessment proceeding.
8. The writ petition is disposed of, in the aforesaid terms.
9. Consequently, pending applications shall stand closed.
