Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
+ W.P.(C) 556/2011 Date of decision: 25 April, 2011.
W.P.(C) 557/2011
W.P.(C) 558/2011
SPRINT COMMUNICATIONS COMPANY LP .... Petitioner
Through Mr. Salil Kapoor, Mr. Sanat Kapoor
and Mr. Ankit Gupta, Advocates.
versus
DEPUTY DIRECTOR INCOME TAX ..... Respondent
Through Mr. Sanjeev Sabharwal, Sr. Standing
Counsel.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
O R D E R
%
In these connected writ petitions notice was directed to be issued on
st
31 January, 2011 and this Court while issue notice had recorded as
follows:-
“Heard Mr. Dastur, learned senior counsel along with
Mr.Nishant Thakkar, Mr. Sanat Kapur and Mr.Ankit
Gupta, learned counsel for the petitioner and
Mr. Sanjeev Sabharwal, learned counsel for the revenue.
W.P.(C) Nos.556,557 & 558/2011 Page 1 of 5
It is submitted by Mr. Dastur, learned senior counsel that
a notice under Section 148 of the Income Tax Act, 1961
(for brevity ‘the Act’) was issued to Sprint International
Holdings Inc. but in the draft assessment order, as
contained in Annexure P-24, the name of the assessee has
been mentioned as Sprint Communication Company LP
through Sprint International Holdings Inc. (Liaison
Office). In essence, the submission of learned senior
counsel for the petitioner is that the present petitioner
was never served the notice under Section 148 of the Act
and, therefore, the draft assessment order could not
have been framed against him. It is further submitted by
Mr.Dastur, learned senior counsel that the petitioner is a
firm which is assessed at Bombay and it cannot be given
the status of a foreign company but the assessing officer,
for the purpose of realization of tax, has roped in the
firm in the net being fully aware that a foreign firm,
namely, Sprint International Holdings Inc. is
not amenable to assessment in view of the provisions
contained in Section 144C of the Act.
Mr. Sanjeev Sabharwal, learned standing counsel for
the revenue prays for some time to obtain instructions
and if necessary to file a reply indicating how the notice
was issued against a particular company and the draft
assessment has been framed against the partnership firm.
Be it W.P.(C) 556/2011 noted, though we have stated the
issue in this compartment, it does not necessarily mean
that all other issues are closed. Let the counter affidavit
be filed within four weeks hence. Matter be listed on
25th April, 2011.
2. As an interim measure, further proceedings before the Assessing
Officer pursuant to the draft order of assessment passed by the Assessing
Officer were also stayed.
st
3. As noticed in the order dated 31 January, 2011, the principal
W.P.(C) Nos.556,557 & 558/2011 Page 2 of 5
contention raised was that notice under Section 147/148 of the Income Tax
Act, 1961 (Act, for short) was issued to Sprint International Holdings Inc.,
but the draft assessment order, Annexure P-24 to the writ petition, the name
of the assessee has been mentioned as Sprint Communication Company LP
through Sprint International Holdings Inc. (Liaison Office). Thus, notice
under Section 147/148 was issued to a different company ‘A’ i.e. Sprint
International Holdings Inc. but in the draft assessment order the name of
the assessee is mentioned as company ‘B’ i.e. Sprint Communication
Company LP.
4. The petitioner has filed the present writ petitions on the ground that
no notice under Section 147/148 of the Act was issued to them and no draft
assessment order, therefore, can be made against them and neither can the
petitioner be forced to file objections and appear before the Dispute
Resolution Panel as per Section 144C of the Act. It is also the case of the
petitioners that they have not been heard but a draft assessment has been
passed.
5. We have heard Mr. Sanjeev Sabharwal, learned Senior Standing
Counsel for the department. He states that he admits and accepts the factual
position that the notices under Section 147/148 of the Act were issued to
Sprint International Holdings Inc. but in the draft assessment order the
W.P.(C) Nos.556,557 & 558/2011 Page 3 of 5
assessee mentioned is different, namely, Sprint Communications Company
LP, the petitioner herein. He submits that this Court may pass necessary
orders as is deemed appropriate and necessary.
6. In view of the admitted factual position, we have no option but to
quash the draft assessment order passed against the petitioner Annexure P-
24 to the writ petition as the same cannot be sustained. The re-assessment
proceedings have not initiated against the petitioner and no notice under
Section 147/148 of the Act has been issued to the petitioner. The
respondent has not evoked provisions of Section 160 or 163 and other
provisions relating to representative assessee/agent in the present case.
The draft assessment order, therefore, cannot be passed against the
petitioner, and the petitioner cannot be compelled to participate in
proceedings under section 144C of the Act. There is lack of jurisdiction.
The writ petition is allowed to the extent indicated above. It is, however,
clarified that it is open to the respondents to proceed in accordance with
law against the petitioner. It is further clarified that this Court has not
quashed the re-assessment notice issued under Section 147/148 of the Act.
st
The interim stay order passed on 31 January, 2011 will be treated as
passed in the case of the petitioner and the proceeding initiated pursuant to
the notices issued u/s 147/148 against Sprint International Holidays Inc.
W.P.(C) Nos.556,557 & 558/2011 Page 4 of 5
The writ petitions are disposed of. There will be not order as to costs.
SANJIV KHANNA, J.
CHIEF JUSTICE
APRIL 25, 2011
NA
W.P.(C) Nos.556,557 & 558/2011 Page 5 of 5