The Karnataka High Court last week disposed of a petition filed by Google seeking interim relief in a matter related to payment of balance tax..The single judge Bench of Justice BV Nagarathna directed the Revenue Department not to take further steps against Google pending the disposal of an appeal in the Bengaluru Bench of the Income Tax Appellate Tribunal (ITAT)..The Bench also directed Google to maintain a balance of Rs. 26 crore in their account, pending the disposal of the matter before the ITAT..A team from AZB & Partners led by Partners Deepak Chopra and Aditya Vikram Bhat represented Google. Advocate KV Aravind appeared for the respondents..Google had received a notice dated November 15 this year from the Deputy Commissioner of Income Tax, Bengaluru, directing it to pay balance tax amounting to more than Rs. 59 crore for the Assessment Year 2013-14. The company owes the revenue department a total of Rs. 129 crore, out of which Rs. 70 crore had been deposited back in 2014..In its appeal against this notice before the High Court, the petitioner company argued that an appeal was pending before the Appellate Tribunal, which had, since October 31, 2014, agreed to stay the order directing it to pay the balance tax subject to a deposit of Rs. 70 crore..However, the Tribunal had refused to extend the stay vide an order passed on November 7, holding that there was no prima facie case, financial hardship or irreparable injury so as to justify any further extension of stay..It was also noted that the appeal before the Appellate Tribunal was to come up for final hearing on November 23, and therefore, in the interim, the rights of the petitioner cannot be jeopardized by the Revenue Department. It was further argued that since the department had attached the bank account of Google India, it could not carry on financial transactions. Therefore, the petitioner company sought interim relief from the Court..Having earlier decided that Google’s appeal was maintainable, Justice Nagarathna held that keeping the petition pending and granting interim relief to the company would not serve any purpose. The judge also directed the Appellate Tribunal to dispose of the appeal on or before January 31, 2018. The order states,.“In order to further protect the interest of the revenue and keeping in mind the fact that the appeal is slated for final arguments before the Appellate Tribunal and balancing the equities on both sides, the petitioner is directed to retain a balance of another 20%…the said balance is rounded off to Rs. 26,00,00,000 shall be maintained pending disposal of the appeal by the Appellate Tribunal.”.While disposing of the petition, the Court also directed the Revenue Department not to take any further action against the company pending the disposal of the case in the Appellate Tribunal..Google India had been pulled up for transferring advertisement revenue to the company’s Ireland office without paying taxes to the Income Tax Department. The Bengaluru Bench of ITAT had, in an order dated October 23 this year, deemed Google as an assessee in default with respect to payment of taxes for Assessment Years 2007-08 to 2012-13..The present case pertains to payment of taxes for the Assessment Year 2013-14, an appeal against which is pending before the ITAT. A Division Bench of the Karnataka High Court, had, on November 16, held that the October 23 decision of the ITAT would not prejudice the outcome of the present case, which is to be disposed of by the end of January..Read the judgment:.Update: The story has been edited after reviewing the previous orders and speaking with the concerned lawyers. The error is regretted.
The Karnataka High Court last week disposed of a petition filed by Google seeking interim relief in a matter related to payment of balance tax..The single judge Bench of Justice BV Nagarathna directed the Revenue Department not to take further steps against Google pending the disposal of an appeal in the Bengaluru Bench of the Income Tax Appellate Tribunal (ITAT)..The Bench also directed Google to maintain a balance of Rs. 26 crore in their account, pending the disposal of the matter before the ITAT..A team from AZB & Partners led by Partners Deepak Chopra and Aditya Vikram Bhat represented Google. Advocate KV Aravind appeared for the respondents..Google had received a notice dated November 15 this year from the Deputy Commissioner of Income Tax, Bengaluru, directing it to pay balance tax amounting to more than Rs. 59 crore for the Assessment Year 2013-14. The company owes the revenue department a total of Rs. 129 crore, out of which Rs. 70 crore had been deposited back in 2014..In its appeal against this notice before the High Court, the petitioner company argued that an appeal was pending before the Appellate Tribunal, which had, since October 31, 2014, agreed to stay the order directing it to pay the balance tax subject to a deposit of Rs. 70 crore..However, the Tribunal had refused to extend the stay vide an order passed on November 7, holding that there was no prima facie case, financial hardship or irreparable injury so as to justify any further extension of stay..It was also noted that the appeal before the Appellate Tribunal was to come up for final hearing on November 23, and therefore, in the interim, the rights of the petitioner cannot be jeopardized by the Revenue Department. It was further argued that since the department had attached the bank account of Google India, it could not carry on financial transactions. Therefore, the petitioner company sought interim relief from the Court..Having earlier decided that Google’s appeal was maintainable, Justice Nagarathna held that keeping the petition pending and granting interim relief to the company would not serve any purpose. The judge also directed the Appellate Tribunal to dispose of the appeal on or before January 31, 2018. The order states,.“In order to further protect the interest of the revenue and keeping in mind the fact that the appeal is slated for final arguments before the Appellate Tribunal and balancing the equities on both sides, the petitioner is directed to retain a balance of another 20%…the said balance is rounded off to Rs. 26,00,00,000 shall be maintained pending disposal of the appeal by the Appellate Tribunal.”.While disposing of the petition, the Court also directed the Revenue Department not to take any further action against the company pending the disposal of the case in the Appellate Tribunal..Google India had been pulled up for transferring advertisement revenue to the company’s Ireland office without paying taxes to the Income Tax Department. The Bengaluru Bench of ITAT had, in an order dated October 23 this year, deemed Google as an assessee in default with respect to payment of taxes for Assessment Years 2007-08 to 2012-13..The present case pertains to payment of taxes for the Assessment Year 2013-14, an appeal against which is pending before the ITAT. A Division Bench of the Karnataka High Court, had, on November 16, held that the October 23 decision of the ITAT would not prejudice the outcome of the present case, which is to be disposed of by the end of January..Read the judgment:.Update: The story has been edited after reviewing the previous orders and speaking with the concerned lawyers. The error is regretted.
