THE ADDL./JOINT/DEPUTY/ASSISTANT vs A O SMITH INDIA WATER PRODUCTS PVT LTD

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 15 DAY OF OCTOBER, 2026


BEFORE

THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

REVIEW PETITION NO.117 OF 2026

BETWEEN:

1. THE ADDL./JOINT/DEPUTY/ASSISTANT
COMMISSIONER OF INCOME TAX
NATIONAL FACELESS ASSESSMENT CENTRE,
ND
ROOM NO.401, 2 FLOOR, E-RAMP,
JAWAHARLAL NEHRU STADIUM,
DELHI-110 003.

2. DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX,
CIRCLE-1(1)(1), BMTC BUILDING,
KORAMANGALA,
BANGALORE-560 095.

3. PR. COMMISSIONER OF INCOME TAX-1
BMTC BUILDING,
80 FEET ROAD, KORAMANGALA,
BENGALURU-560 095.
…PETITIONERS
(BY SRI. RAVI RAJ Y.V., AND
SRI. M.DILIP, ADVOCATES)











Digitally
signed by
VANDANA S
Location:
High Court
of Karnataka


AND:

A O SMITH INDIA WATER PRODUCTS PVT LTD.,
300 PHASE II, KIADB INDUSTRIAL AREA,
KANAKAPURA RAMANAGAR, HAROHALLI,
BANGALORE-562 112.
REPRESENTED BY ITS
MANAGING DIRECTOR
PARAG KAMLAKAR KULKARNI
…RESPONDENT

(BY SRI. T. SURYANARAYANA, SENIOR COUNSEL APPEARING FOR
SMT. TANMAYEE RAJKUMAR, ADVOCATE)

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THIS REVIEW PETITION IS FILED UNDER ORDER 47 RULE 1 OF
CPC 1908, PRAYING TO REVIEW THE ORDER DATED 15.12.2025 PASSED
BY THIS HONBLE COURT IN WP NO.14112/2021.
THIS PETITION, COMING ON FOR ORDERS , THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER
This petition takes exception to the order dated 15.12.2025
passed by this Court in W.P.No.14112/2021 whereby this Court
allowed the petition by noting that the draft assessment order was
not passed by the revenue / review petitioners prior to passing the
assessment order and in the light of the judgment of this Court in
the case of Essilor India Pvt. Ltd., Vs. The Deputy
Commissioner of Income Tax & others – W.P.No.3410/2020
dated 15.10.2025, the impugned assessment order, demand
notice and penalty notice were accordingly quashed.
Subsequently, the revenue / review petitioners have preferred the
present review petition interalia contending that the draft
assessment order was infact produced by the respondent / writ
petitioner himself at Annexure – K dated 08.04.2021, which was
not taken into account by this Court, which committed an error

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apparent on the face of the record by recording a factually incorrect
finding that there was no draft assessment order and passed the
order aforesaid final order dated 15.12.2025, which deserves to be
set aside and the writ petition be restored to the file of this Court for
fresh disposal in accordance with law.

2. Per contra, learned Senior Counsel for the respondent
/ writ petitioner would invite my attention to Annexure – K dated
08.04.2021 filed in W.P.No.14112/2021, which was a draft
assessment order dated 08.04.2021 and pointed out that in the writ
petition it was the specific contention of the respondent – writ
petitioner that prior to passing the impugned order, the review
petitioner / Revenue had not passed the revised draft assessment
order as mandatorily required under Section 144B (xxv) of the
Income Tax Act, 1961 and in the absence of the same, the review
petitioner / Revenue was not entitled to pass the impugned
assessment order, which was correctly quashed by this Court in
the aforesaid final order. It was also pointed out that though this
Court at para 4 of its order has stated that the review petitioner /
Revenue had not passed a draft assessment order, the said phrase

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used by this Court is a misnomer and the same in fact referred to
non passing of a revised draft assessment order, which was
required in law and as such, the question of interfering with the
aforesaid final order would not arise and the same may be clarified
by holding that the order quashing the assessment order is correct
in the light of the undisputed fact that the revised draft assessment
order was not passed prior to passing the impugned final
assessment order.

3. I have given my anxious consideration to the rival
submissions and perused the material on record.

4. This Court in its final order dated 15.12.2025 passed in
W.P.No.14112/2021 has held as under:
“In this petition, the petitioner seeks the following reliefs:-
“(a) Declaring that bearing DIN dated the order
ITBA/AST/S/143(3)/2021-22/1033519340(1) 17.06.2021
(Annexure-M) passed by the Respondent under Section
143(3) read with Sections 144C(3) and 144B of the Act for
the assessment year 2017-18 is non-est and void ab initio;
(b) Quashing order bearing DIN ITBA/AST/S/143(3)/2021-
22/1033519340(1) dated 17.06.2021 (Annexure-M) passed
by the Respondent under Section 143(3) read with

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Sections 144C(3) and 144B of the Act for the assessment
year 2017-18;
(c) Quashing the consequent notice of demand issued
under Section 156 of the Act dated 17.06.2021 (Annexure-
N) bearing number ITBA/AST/S/156/2021-
22/1033519389(1) issued by the Respondent for
assessment year 2017-18;
(d) Quashing the notice issued under Section 274 read with
Section 270A of the Act dated 17.06.2021 (Annexure-P)
bearing number ITBA/PNL/S/270A/2021-22/1033519429(1)
issued by the Respondent for assessment year 2017-18;
(e) pass such other or further orders as this Hon'ble Court
may deem fit in the facts and circumstances of the case, in
the interests of justice and equity.”


2. Heard learned Senior Counsel for the petitioner
and learned counsel for the respondents – Revenue and
perused the material on record.
3. A perusal of the material on record, including
the impugned orders, will indicate that the subject matter of
the present petition, the issue and controversy involved in
the present petition are directly and squarely covered by the
judgment of this Court in the case of Essilor India Pvt. Ltd.,
1
v. The Deputy Commissioner of Income Tax & Others .
"In this petition, petitioner has sought for the following
reliefs:-

1
Writ Petition No.3410/2020 dated 15.10.2025

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" (i) quashing the order dated 08.11.2019
bearing No. ITBA/AST/F/17/2019-20/1020020805(1)
passed by the 1st Respondent (Annexure-S)
rejecting the Petitioner's objections to reopening of
the assessment;
(ii) quashing the order dated 18.10.2019
(Annexure-N) bearing No. ITBA/TPO/F/17/2019-
20/1019079147(1) passed by the 2nd Respondent
under Section 92CA O the Act for the assessment
year 2015-16;
(iii) quashing the final assessment order dated
13.12.20 bearing No. ITBA/AST/M/147/2019-
20/1022290754 passed by the 1st Respondent
(Annexure-T) un Section 143(3) read with Section
147 of the Act for assessment year 2015-16;
(iv) Quashing the corrigendum bearing No.
ITBA/COM/F/17/201-20/1022424645(1) dated:
st
16.12.2019 issued by the 1 Respondent
(Annexure-W);
(v) Quashing the order dated: 20.01.2020
st
passed by the 1 Respondent under Section 143(3)
read with Section 147 and 144C of the Act bearing
No.ITBA/AST/M/147/2019-20/1024024629(1)
(Annexure-X) for the assessment year 2015-16 and
the consequent notice dated: 20.01.2020 issued by
st
the 1 Respondent under Section 156 of the Act
(Annexure-Y) bearing No.ITBA/AST/M/147/2019-
20/1024024629(1); and
(vi) passing such other or further order as this
Hon'ble Court may deem fit in the facts and

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circumstances of the case, in the interest of justice
and equity."
2. Heard learned Senior counsel for the petitioner and
learned counsel for the respondents – Revenue and
perused the material on record.
3. A perusal of the material on record will indicate that
on 30.11.2015, the petitioner filed I.T. returns for the
st
assessment year 2015-16, pursuant to which, the 1
respondent issued a Notice dated 18.09.2017 under
Section 148 of the I.T.Act seeking to re-open the
assessment of the petitioner under Section 147 of the
st
I.T.Act. On 02.11.2017, the petitioner requested the 1
respondent to furnish copy of the reasons recorded for
reopening of the assessment which was furnished by the
respondents on 11.09.2018, to which the petitioner filed the
objections on 15.10.2018. It is seen that without disposing
st
of the objections filed by the petitioner, the 1 respondent
made a reference to the Transfer Pricing Officer (TPO)
under Section 92CA of the I.T.Act in October 2018 without
informing or notifying the petitioner.
4. It is contended that subsequently on 23.10.2018, the
nd
2 respondent issued a notice to the petitioner informing
him about the commencement of the proceedings under
Section 92CA of the I.T.Act calling for certain details, which
was followed by a notice dated 15.05.2019 under Section
271G of the I.T.Act, the petitioner not only furnished the
details vide Annexure-E dated 23.05.2019 but also replied
to the notice issued under Section 271G of the Act on
23.05.2019 requesting to drop the penalty proceedings; so
also, petitioner addressed a letter dated 28.05.2019 to the

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st
1 respondent to dispose of the objections filed to the
reasons recorded before proceeding with the assessment.
5. The material on record also discloses that on
nd
24.07.2019, the 2 respondent issued a notice to the
petitioner proposing to make a transfer pricing adjustment
with regard to the advertising, marketing and promotional
expenses incurred by the petitioner. Aggrieved by the
same, the petitioner approached this Court in
W.P.No.43994/2019, which was disposed of by the co-
ordinate Bench of this Court vide final order dated
12.11.2019. Meanwhile, the petitioner filed objections dated
nd
01.10.2019 to the 2 respondent proposing to determine
nd
the transfer pricing adjustment, pursuant to which, the 2
respondent passed an order dated 18.10.2019, subsequent
st
to which, the 1 respondent issued Notice dated
02.12.2019, to which the petitioner filed its objections dated
06.12.2019.
6. In pursuance of the aforesaid facts, circumstances
st
and events, the 1 respondent passed the final assessment
order dated 13.12.2019 vide Annexure-T under Section 143
r/w 147 of I.T.Act followed by a Demand notice under
st
Section 156 of the I.T.Act. Thereafter, the 1 respondent
issued Corrigendum at Annexure-W dated 16.12.2019
informing the petitioner that the final assessment order
dated 13.12.2019 is to be construed, read and treated as a
Draft assessment order.
7. In the first instance, the petitioner approached this
Court seeking the aforesaid relief of challenging the Draft
assessment order and corrigendum etc., Subsequently,
st
during the pendency of the present petition, the 1

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respondent passed one more order at Annexure-X dated
20.01.2020 followed by a Notice at Annexure-Y dated
nd st
20.01.2020. In the said 2 assessment order, the 1
respondent specifically stated that the earlier order dated
13.12.2019 was only a Draft assessment order and as
such, it is permissible to pass fresh assessment order.
8. Learned Senior counsel for the petitioner invited my
attention to the impugned assessment order at Annexure-T
dated 13.12.2019 followed by a demand notice at
Annexure-V dated 13.12.2019 in order to point out that the
said order clearly discloses that it was a final assessment
order and not draft assessment order as sought to be
contended by the respondents. It is submitted that upon
passing of the final assessment order followed by a
demand notice, it is impermissible in law for respondents to
classify, construe or treat the same as draft assessment
order and thereafter, issue one more final assessment
order as held by the Division Bench of this Court in the
cases of Prl.Commissioner of Income Tax-2 & Anr. vs.
M/s.Cisco Systems Capital (India) Pvt. Ltd., - I.T.A.
No.128/2021 - Dated 20.09.2021 and The Prl.
Commissioner of Income Tax and Another. vs. M/s
Alpha Elsec Defence and Aerospace Systems Pvt. Ltd.,
- I.T.A. No. 48/2024 dated 19.08.2025 . It is therefore
submitted that the impugned assessment orders, notices
etc., deserves to be quashed.
9. Per contra, learned counsel for the respondents –
revenue would support the impugned orders, notices etc.,
and submits that there is no merit in the petition and that
the same is liable to be dismissed.

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10. The issue as to whether revenue would be entitled
to pass the second assessment order after passing the
earlier first assessment order followed by a demand notice
is no longer resintegra in the light of the judgment of this
Court in the case of Google Ireland Limited vs. Assistant
Commissioner of Income Tax (International Taxation) -
W.P.No.1730/2019 dated 03.06.2025.
11. In the instant case, it is an undisputed fact that a
bare perusal of the impugned assessment order at
Annexure-T will indicate that it is a final assessment order,
especially when the same has been followed immediately
by a Demand notice which confirms the same as a final
assessment order and not draft assessment order as
sought to be contended by the respondents. Though the
st
1 respondent purports to have issued corrigendum
informing the petitioner that the earlier assessment order
dated 13.12.2019 shall be treated as draft assessment
order, the said contention cannot be accepted in view of the
demand raised by the respondents immediately upon
passing the earlier assessment order.
12. In fact, in Google Ireland's case supra, it was held
that after issuing the final assessment order and demand
notice, it was not permissible for the respondent-revenue to
circumvent the same and issue a corrigendum informing
the petitioner to treat the said final assessment order as the
draft assessment order and the said contention was
negatived by this Court in the aforesaid judgments.
13. Under these circumstances, I am of the considered
opinion that the impugned assessment orders, notices,

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Corrigendum at Annexures – T, V, W, X and Y respectively
deserves to be quashed.

14. In the result, I pass the following:-
ORDER
(i) Petition is hereby allowed.
(ii) The impugned assessment order at Annexure-T
dated 13.12.2019, the impugned Demand notice at
Annexure-V dated 13.12.2019, the impugned
Corrigendum at Annexure-W dated 16.12.2019, the
impugned assessment order at Annexure-X dated
20.01.2020 and the impugned demand notice at
Annexure-Y dated 20.01.2020 issued / passed by the
respondents are hereby quashed and set aside."
4. In view of the aforesaid judgment of this Court
in Essilor India Pvt. Ltd., (supra) coupled with the undisputed
fact the draft assessment order was not passed by the
respondent before passing the impugned assessment order,
I deem it just and appropriate to quash the impugned
assessment order and all proceedings in pursuance of the
same.
5. In the result, I pass the following:-
ORDER
(i) The Writ Petition is hereby allowed.
(ii) The impugned assessment order, demand
notice and penalty notice, all dated 17.06.2021 at

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Annexures-M, N and P respectively, issued / passed
by the respondents are hereby quashed.
5. In the brief facts appended to the synopsis / list of
dates to the writ petition filed by the respondent – writ petitioner, it
is specifically contended by the respondent – writ petitioner that
final assessment order could not have been passed without
passing the revised draft assessment order as contemplated under
144B (xxv) of the Income Tax Act as can be seen at para 4 from
the brief facts, which is as hereunder:
“4. Challenging the same, the respondent filed a
present writ petition before this Hon’ble Court, contending
that the FAO was required to issue a revised draft
assessment order after taking note of the objections filed by
the assessee in terms of Section 144B (xxv) of the Act, the
failure of which is gross violation of the procedure laid down
in Section 144B.”

6. The Revenue, who is the review petitioner in the
present review petition does not dispute the fact that it was the
specific case of the respondent – writ petitioner in the writ petition
that the revised draft assessment order had not been passed by
the review petitioner / Revenue, which they do not dispute even in
the present review petition. In fact, at para 6 of the Memorandum of

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Review Petition, in the brief facts of the case urged by the Review
Petitioner, the review petitioner / Revenue states as under:
“6. It is brought to the notice of this Hon’ble Court
that existence of a draft order passed under Section 144C of
the Act dated 08.04.2021 has missed the attention of this
Hon’ble Court while allowing the writ petition. This has
resulted in a mistake apparent on record which requires to
be rectified. A copy of the draft order passed under Section
144C is enclosed as Annexure – B to this Review Petition.”

7. As can be seen from the aforesaid pleadings of the
parties, it is the common ground that both parties were ad-idem as
regards the fact that revised draft assessment order had not been
passed by the review petitioner / Revenue prior to passing the
impugned assessment order, which was quashed by this Court; it is
therefore clear that the usage of the words Draft Assessment Order
being not passed by the review petitioner / Revenue in the final
order dated 15.12.2025 passed in W.P.No.14112/2021 by this
Court is a misnomer and the same actually meant non-passing of
revised draft assessment order as required under Section 144B
(xxv) of the Income Tax Act and consequently, the said
typographical error / misnomer that has occurred in the final order
of this Court cannot be construed or treated as an error apparent

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on the face of the record, which would vitiate the entire order so as
to enable the review petitioner / Revenue to seek review of the
aforesaid final order especially when it is not the case of the
Revenue as can be seen from the facts and grounds urged in the
review petition that they had actually passed a revised draft
assessment order prior to passing of the impugned assessment
order, which was quashed by this Court.

8. Under these circumstances, by clarifying that the final
order dated 15.12.2025 was passed on the premise /
understanding that a revised draft assessment order was not
passed by the review petitioner / Revenue prior to passing of the
impugned assessment order, the present review petition stands
disposed of without interfering with the order.


Sd/-
(S.R.KRISHNA KUMAR)
JUDGE



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