Case Law Details
Xiaomi Technology India Private Limited Vs DCIT (Karnataka High Court)
Karnataka High Court held the provisional attachment order unjustifiable as the same was passed simply stating that there is likely addition of the amount without mentioning of any valid and cogent reasons.
Facts- The petitioner is a private limited company engaged in the business of procurement, supply and distribution of Xiaomi products in India bearing various brand names including mobile phones, accessories, computers etc., as part of its business, petitioner has to pay royalty to Qualcomm and Beijing Xiaomi mobile software company Ltd.,
During the period from 2019 to March 2022, there were proceedings between the respondents and Income Tax Department and the proceedings in relation to alleged payment of income tax by the petitioner. Meanwhile, the Enforcement Directorate passed a seizure order dated 29.04.2022 seizing the bank accounts of the petitioner to an extent of INR 5,551 crores under the Foreign Exchange Management Act (for short ‘FEMA’). The said order having been challenged by the petitioner in W.P.No.9182/2022, this Court passed an interim order dated 05.05.2022 staying the operation of the seizure order, subject to the condition that the petitioner was not entitled to make payments to foreign entities in the form of royalty or any other form. Subsequently, this Court issued a further clarification on 12.05.2022 that the petitioner was at liberty to take overdrafts and make payments from such overdrafts to foreign entities excluding payment of royalty.
Subsequently, on 11.08.2022, upon obtaining approval from the 3rd respondent, the 1st respondent passed the impugned order under Section 281B of the I.T.Act provisionally attaching the subject fixed deposits of the petitioner in a sum of INR 3,700 crores for a period of six months. Aggrieved by the impugned order, petitioner is before this Court by way of the present petition, which was preferred on 18.08.2022.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
