- 1 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND WRIT APPEAL No. 589 OF 2024 (T-IT) BETWEEN: 1. THE ASSESSMENT UNIT, NATIONAL FACELESS ASESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, JAWAHARLAL NEHRU STADIUM, NEW DELHI - 110 003. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BANGALORE, 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560095. 3. THE DISPUTE RESOLUTION PANEL - 2 BANGALORE, A WING, 4TH FLOOR, KENDRIYA SADAN, 2ND BLOCK, KORAMANGALA, BANGALORE -560034. …APPELLANTS (BY SRI SANMATHI E. I., SENIOR STANDING COUNSEL) AND: 1. M/S OPEN SILICON RESEARCH PRIVATE LIMITED, A COMPANY HAVING ITS REGISTERED COMPANIES ACT OFFICE AT Digitally signed by VALLI MARIMUTHU Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 No.11/1 AND 12/1, MARUTI INFOTECH CENTRE, B-BLOCK, 2ND FLOOR KORAMANGALA, INDIRANAGAR, INTERMEDIATE RING ROAD, BENGALURU - 560071, REPRESENTED BY ITS DIRECTOR SHRI KUTHENUR SANDEEP SHETTY …RESPONDENT THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 19/07/2023 IN WP No.14541/2023 PASSED BY THE HON'BLE LEARNED SINGLE JUDGE. THIS APPEAL COMING ON FOR PRELIMINARY HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K.V. ARAVIND) The Revenue, assailing the order dated 19.07.2023 passed in W.P. No.14541/2023, has preferred this appeal under Section 4 of the Karnataka High Court Act, 1961. 2. The assessee filed its return of income for the Assessment Year 2012-13. The Assessing Officer referred the matter to the Transfer Pricing Officer for determination of the Arm’s Length Price. Upon consideration of the Arm’s Length Price so determined, the Assessing Officer passed a draft - 3 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 assessment order, which was placed before the Dispute Resolution Panel (for short, 'DRP'), and thereafter culminated in the final assessment order. The orders of the DRP and the final assessment were carried in appeal by the assessee before the Tribunal. The Tribunal, on consideration, remanded the matter to the Assessing Officer and the Transfer Pricing Officer for reconsideration on certain issues. 3. The Assessing Officer, in compliance with the order of remand passed by the Tribunal, issued a draft assessment order on 01.09.2022, granting the assessee an option either to file objections before the DRP or to agree to the assessment. As the objections filed before the DRP were not communicated to the Assessing Officer, a final assessment order came to be passed on 26.10.2022. The said order was challenged by the assessee in a writ petition, contending that objections had in fact been preferred before the DRP against the draft assessment order dated 01.09.2022. It was further stated that the DRP had issued directions on 15.05.2023. The learned Single Judge, under the impugned order, taking note of the fact that the DRP had issued directions to the Assessing Officer and - 4 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 that the final assessment order dated 26.10.2022 was passed without considering the objections filed by the assessee before the DRP, set aside the assessment order dated 26.10.2022, with a direction to the Assessing Officer to pass a final assessment order in accordance with the directions of the DRP, while safeguarding the limitation to that extent. 4. Sri E.I. Sanmathi, learned Senior Standing Counsel for the appellant-Revenue, assailing the order of the learned Single Judge, submits that Section 144C of the Income Tax Act, 1961 (for short, 'the Act'), mandates communication of the objections filed before the DRP to the Assessing Officer. In the present case, it is undisputed that the Assessing Officer was not informed of the objections filed before the DRP. Hence, the Assessing Officer was justified in proceeding to pass the final assessment order dated 26.10.2022. It is his submission that, in view of the non-compliance with the mandatory requirement, the order of the learned Single Judge setting aside the assessment order dated 26.10.2022 is unsustainable. 5. We have considered the submissions of the learned counsel for the appellant and have perused the appeal papers. - 5 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 6. The Assessing Officer passed the draft assessment order on 01.09.2022. The assessee preferred objections before the DRP on 27.09.2022; however, the same were not communicated to the Assessing Officer. Consequently, the Assessing Officer proceeded to pass the final assessment order on 26.10.2022. In the meantime, the DRP, by its order dated 15.05.2023, disposed of the objections with certain directions to the Assessing Officer. The order dated 26.10.2022, passed without awaiting the directions of the DRP, was questioned before the learned Single Judge. The grievance of the Revenue in this appeal is that, when the mandatory requirement of communication of objections to the Assessing Officer is not complied with, as admittedly in the present case, the order of assessment could not have been set aside. This question, however, need not be gone into in the present appeal in view of subsequent developments. It is stated that the Assessing Officer, giving effect to the directions of the DRP, has passed the final assessment order, and the assessee has carried the said final assessment order and the directions of the DRP before the Tribunal in IT(TP)A No.966/Bang/2023. The - 6 - HC-KAR NC: 2025:KHC:35324-DB WA No. 589 of 2024 Tribunal, by its order dated 12.06.2024, has adjudicated the assessee’s appeal. 7. In view of the aforesaid subsequent developments, we are not inclined to entertain this appeal, as the issue has become academic in nature. However, the questions raised in this appeal are kept open. 8. In the light of the foregoing discussion, the appeal stands dismissed. Sd/- (S.G.PANDIT) JUDGE Sd/- (K. V. ARAVIND) JUDGE VBS List No.: 1 Sl No.: 29