The Bombay High Court in the case observed and has stayed an amount of Rs. 32.39 crore tax demand and all the related proceedings which is initiated against the PayPal Payments Private Limited, an online payment processing company.
The Division bench comprising of Justice K. R. Shriram and Justice Dr. Neela Gokhale in the case observed and has passed the ad-interim order and granted relief to the petitioners till January 31, 2024.
The court in its order stated that pending the hearing and final disposal of this petition, stay the operation of the Impugned Order, the Impugned Demand Notice, the Impugned Notice, the Impugned Penalty Notice, the Impugned Draft Order and the Impugned TPO Order which is being passed by Respondents No.2 i.e., the Assessment Unit ITD and the Respondent 4 i.e., the Assistant Commissioner of Income Tax.
In the present case, the company challenged actions of the Assessing Officers, National Assessment Faceless Centre, Delhi.
Before the court, the following orders were challenged-
he Final Assessment Order dated October 17, 2023 passed under 14 Section 143(3) reading with Section 144C(3) and 144B of the Income-Tax Act, 1961, demand notice issued the same day under Section 156, Penalty notice dated July 30 under section 274 reading with Section 271G and another penalty notice from October 17, 2023 along with other orders.
It has also been claimed by the petitioner that they filed the income tax returns electronically on February 14, 2021 for 2020-21 declaring a total income of Rs. 12,97,96,680. Thus, the said foreign outward remittance, loss from currency fluctuations etc.
Therefore, the department arrived at an increase in PayPal’s income by an amount of Rs.91,32,63,430.
However, the assessed income under Section 144C(3) of the Act read with Section 144B of the Act was computed at Rs.1,04,30,60,110.
The court observed that on the same day, the Income Tax Department raised a demand notice of over Rs.32,39,48,100. Another penalty notice alleged under-reporting of income.
The Paypal contended in the plea moved that as per section 153(1) of the Act, no order of assessment ‘shall’ be made under Section 143 of the Act at any time after the expiry of 18 months which is extendable up to 12 months) from the end of the Annual Year in which the income was first assessable.
The petitioner in the plea contended that it is humbly submitted that the statutory limitation period for passing an order of assessment, i.e., the Impugn ed Order in the present case, expired on September 30, 2023. Therefore, the said order was passed by the Assessment Unit of ITD on October 17 was ‘unambiguously beyond the statutory period of limitation’ by a month and the order was without jurisdiction and was liable to be quashed.
It has also been submitted in the plea that the Impugned Order for the AY 2020-21 is barred by limitation and therefore, void ab initio and without jurisdiction and is therefore, the same is liable to be quashed.
On the other hand, the respondent requested three weeks to file their replies.
The court while considering the facts and circumstances of the case observed and has directed the petitioners for filing their rejoinder within the period of two weeks.
Accordingly, the court listed the matter for further consideration on January 08, 2024.