Google Ireland Limited Vs ACIT (Karnataka High Court)
The petitioner challenged assessment orders dated 24.12.2018 passed under Sections 143(3), 147, 92CA, and 144C of the Income Tax Act, 1961, relating to Assessment Years 2009-10 and 2010-11.
The principal issue before the Karnataka High Court was whether the impugned orders were Draft Assessment Orders as required under Section 144C of the Act or Final Assessment Orders.
The petitioner contended that although the orders referred to Section 144C and provided an opportunity to file objections before the Dispute Resolution Panel, the subsequent portion of the orders concluded the assessment, computed income and tax liability, issued a demand notice under Section 156, and initiated penalty proceedings under Section 274 read with Section 271(1)(c). Therefore, the orders could not be treated as draft assessment orders.
The petitioner relied on the Division Bench decision in Commissioner of Income-tax (International Taxation) v. Cisco Systems Services B.V., where it was held that issuance of a final assessment order instead of a draft assessment order constituted an incurable error and that a subsequent attempt to treat such an order as a draft order could not be accepted, particularly when a demand notice and penalty proceedings were initiated simultaneously.
