Refund of Taxes paid to be granted to Companies that are incorporated under a foreign country: Delhi High Court
A company that has been incorporated under a foreign country shall receive the refund of taxes paid to India as it would be illegal to hold the money when it is not registered under the provisions of the Companies Act in India, as is also explained in the case of Amadeus IT Group SA (Earlier Amadeus Global Travel Distribution SA) v. Assistant Commissioner of Income Tax &amp; Others, in W.P.(C) 14295/2021, decided by the Hon’ble Mr. Justice Manmohan &amp; Hon’ble Mr. Justice Navin Chawla on December 15, 2021. The brief facts of the case are the petitioner is a foreign company (being a non-resident incorporated under the laws of Spain) and part of Amadeus Group of Companies, the petitioner was merged with Amadeus IT Holding SA with effect from 01st August 2016. Hence, a petition was filed seeking directions to the respondents to grant refund of taxes paid/ deposited by the petitioner for the assessment years 1996-97 to 2016-17 along with applicable interest. The counsel for the petitioner contends that the petitioner filed its return of income for the assessment year 1996-97 on 26th February 1999 declaring NIL income. He further states that the assessing officer vide order dated 23rd March 1999 under section 143(3) of the Act assessed the total income of the petitioner at Rs.13,00,83,258/-. Further, the petitioner preferred an appeal before the First Appellate Authority, viz., the Commissioner of Income Tax Appeals against the order dated 23rd March, 1999. The Appellate Authority vide order dated 23rd March, 2000 upheld the findings of the assessing officer regarding permanent establishment and attribution of income to a PE. Aggrieved by the substantive findings of the CIT(A) upholding the assessment order, the petitioner filed statutory appeal under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) before the Income Tax Appellate Tribunal, New Delhi. The Appellate Tribunal vide common order dated 30th November 2007 partly allowed the appeals of the petitioner as a result of which, the NIL income returned by the petitioner stood accepted. The counsel for the respondent contends that by way of the present writ petition, the petitioner seeks refund of, as many as, twenty assessment years in one go. He further states that no cause of action has arisen in the recent past and therefore, the present writ petition is not maintainable. The Court after listening both the parties had ruled that the petitioner prior to the filing of the present writ petition had made a request to respondent no.1 vide application dated 5th August, 2021 requesting thereby to respondent no.1 to grant refund of income tax due for the assessment years 1996-97 to 2016-17. However, the said application has not been decided till date despite various reminders. Further, Section 240 of the Act embodies the salutary principle of right of the assessee to receive refund of tax which becomes due to the assessee as a result of any order passed in appeal. Lastly, the Court had also directed the 1st respondent to refund of taxes paid/deposited by the petitioner for the assessment years 1996-97 to 2016-17 and refund the same along with applicable interest in accordance with law within three months. However, the process of refund is subject to the order to be passed by the Apex Court in the appeals already pending before it. The writ petition was disposed of in favour of the petitioner.
IN THE HIGH COURT OF DELHI AT NEW DELHI AMADEUS IT GROUP SAand part of Amadeus Group of Companies the petitioner was merged with Amadeus IT Holding SA with effect from 01st August 2016 He states that the petitioner filed its return of income for the assessment year 1996 97 on 26th February 1999 declaring NIL income. He further states that the assessing officer vide order dated 23rd March 1999 under section 143(3) of the Act assessed the total income of the petitioner at Rs.13 00 83 258 He further states that the petitioner preferred an appeal before the First Appellate Authority viz. the Commissioner of Income Tax Appeals against the order dated 23rd March 1999. The Appellate Authority vide order dated 23rd March 2000 upheld the findings of the assessing officer regarding permanent establishment and attribution of income to a PE Learned senior counsel for the petitioner states that the petitioner being aggrieved by the substantive findings of the CIT(A) upholding the assessment order filed statutory appeal under Section 253 of the Income Tax Act 1961before the Income Tax Appellate Tribunal New Delhi. The Appellate Tribunal vide common order dated 30th November 2007 partly allowed the appeals of the petitioner as a result of which the NIL income returned by the petitioner stood accepted He further states that this Court vide separate orders dated 24th January 2011 dismissed both the appeals preferred by the petitioner and the revenue thereby upholding the findings conclusions arrived at by the Tribunal as a result of which the Nil income returned by the Petitioner stood affirmed which in turn makes the petitioner entitled to refund of the entire taxes deposited paid along with applicable interest He further states that the petitioner as well as the Revenue are currently in appeal against the said order(s) of this Court before the Supreme Court. He however states that the Supreme Court has not granted any stay on the operation of the order(s) of this Court. He submits that refund due to the petitioner cannot be withheld merely on the ground that issue is pending final adjudication before the Supreme Court Mr. Sunil Agrawal learned counsel for accepts notice on behalf of the respondents. He states that by way of the present writ petition the petitioner seeks refund of as many as twenty assessment years in one go. He further states that no cause of action has arisen in the recent past and therefore the present writ petition is not maintainable 10. Having heard learned counsel for the parties this Court finds that the petitioner prior to the filing of the present writ petition had made a request to respondent no.1 vide application dated 5th August 2021 requesting thereby to respondent no.1 to grant refund of income tax due for the assessment years 1996 97 to 2016 17. However the said application has not been decided till date despite various reminders. Consequently this Court is of the view that the petitioner has the cause of action to maintain the present This Court is also of the view that Section 240 of the Act embodies the salutary principle of right of the assessee to receive refund of tax which becomes due to the assessee as a result of any order passed in appeal 12. Accordingly the present writ petition is disposed of with the directions that respondent No.1 shall process the case of the petitioner for refund of taxes paid deposited by the petitioner for the assessment years 1996 97 to 2016 17 and refund the same along with applicable interest in accordance with law within three months It is clarified that the process of refund is subject to the order to be passed by the Apex Court in the appeals already pending before it. This Court also clarifies that it has not expressed any opinion on the quantum of 14. With the aforesaid directions present writ petition stands disposed of MANMOHAN J NAVIN CHAWLA J DECEMBER 15 2021 Page 