- 1 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 4474 OF 2024 (T-IT) BETWEEN: SCICOM CONTACT CENTRE SERVICES PRIVATE LIMITED NO.24, NENAPU, GROUND FLOOR, 14TH CROSS, 2ND B MAIN ROAD, SOUNDARYA LAYOUT, HESARAGHATTA ROAD, BANGALORE - 560 073 REPRESENTED HEREIN BY ITS DIRECTOR, MR ARIYANAYAKAM LEO SURESH INCORPORATED UNDER THE COMPANIES ACT 1956 …PETITIONER (BY SRI. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 6(1)(1), Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 80 FT ROAD, BMTC BUILDING KORAMANGALA, BANGALORE - 560 095 2. PRINCIPAL COMMISSIONER OF INCOME TAX 1 BANGALORE, 80 FT ROAD, BMTC BUILDING KORAMANGALA, BANGALORE - 560 095 …RESPONDENTS (BY SRI. Y.V. RAVI RAJ, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTING THE RESPONDENTS TO FORTH REFUND AN AMOUNT OF RS.12,62,160/- TOGETHER WITH APPLICABLE INTEREST, FOR THE ASSESSMENT YEAR 2005-06 (VIDE ORDER ANNEXURE-H) BEARING NO. CIN U74140 KA 2003PTC 032798 DATED 16.11.2022. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before this Court, seeking the following prayer: "a) directing the Respondents to forthwith refund an amount of Rs.12,62,160/-, together with applicable interest, for the assessment year 2005-06; [vide order Annexure-H] bearing No. CIN:U74140KA2003PTC-32798 Dated 16-11-22. b) 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 Smt. Tanmayee Rajkumar, learned counsel appearing for the petitioner and Sri. Y.V. Ravi Raj, learned counsel appearing for the respondents. 3. The petitioner, a back office company in the name and style of 'Scicom Contact Centre Services Private Limited', is before the Court on the question of the respondent-Revenue not taking steps pursuant to the order of the Tribunal. - 4 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 4. A little history is, for the assessment year 2005-06, returns of income filed by the petitioner comes to be picked up for scrutiny assessment. Upon the assessment proceedings culminating into a final assessment order by the Assessing Officer, the petitioner files appeals before the Income Tax Appellate Tribunal. The Tribunal, by a common order, disposed the appeals on each of the grounds urged in the appeals for each of the assessment years by remitting the matter back to the hands of the Assessing Officer for a fresh decision on all the grounds. 5. In terms of Section 153(5) read with 153(3) and 153(4) of the Income Tax Act, 1961 ('the Act' for short), a fresh assessment ought to have been carried out pursuant to the order of the Tribunal before the end of the financial year. Upto 2018, there was no communication to the assessee of the compliance with the order of the Tribunal by initiating proceedings afresh. In those circumstances, the assessee communicates several letters to the respondent-Revenue to comply with the order of the Tribunal. Seven years pass by, the Revenue did not act upon the order of the Tribunal, which had - 5 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 permitted proceedings to be initiated afresh, in accordance with law. Non-initiation of the proceedings afresh as was directed by the Tribunal would revert to the returned position and therefore, the petitioner is before the Court seeking the aforesaid prayer. 6. Learned counsel appearing for the petitioner taking this Court through the order of the Tribunal which decided on every ground in favour of the assessee, but remitted the matter back to the Assessing Officer to initiate proceedings afresh and take it to its logical conclusion, nothing worth the name towards initiating proceedings, afresh has taken place till date, despite passage of close to 8 years, of passing of the order of the Tribunal. Therefore, the learned counsel submits that proceedings now to be taken is barred by law, in terms of the aforesaid orders. 7. Learned counsel appearing for the respondent- Revenue has not produced any order or any communication even to the petitioner to demonstrate, that the liberty under the order of Tribunal was even taken forward by the Revenue, - 6 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 as the order permitted initiation of proceedings afresh, which has not taken place till date. 8. Learned counsel appearing for the petitioner would now join issue in contending that, in identical circumstances, the Co-ordinate Bench of this Court in W.P.No.16223/2023 disposed the petition on 05.02.2024 by directing refund of the tax that was paid. 9. Learned counsel appearing for the respondents is not in a position to dispute the position of law as is laid down by Co-ordinate Bench of this Court in identical circumstances. 10. I have given my anxious consideration to the respective submissions made by the learned counsel and have perused the material on record. 11. The afore-narrated facts, link in the chain of events and the dates, are all a matter of record. The assessment of the petitioner for the year 2005-06 would taken up for scrutiny assessment by initiating proceedings under Section 92CA of the Act. This was called in question before the Tribunal by the - 7 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 petitioner. The Tribunal, answering every ground that is urged, disposes the appeals, reserving liberty to the Revenue to initiate proceedings afresh, bearing in mind the observations made in the course of the order of the Tribunal. Therefore, it becomes necessary to notice the order of the Tribunal: "2. The grounds raised are as under:- 1. The order of the learned CIT (A) in so far as it relates to the following grounds is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case, the learned CIT (A) erred in holding that the TPO erred in not excluding comparables having any related party transactions. 3. The ld. CIT ()A erred in holding that the assessee is eligible for a standard deduction of 5% from Arm's Length Price (ALP) under the proviso to Section 92C (2) of the I.T.Act, 1961. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter amend and /or delete any of the grounds mentioned above. 3. Learned DR of the revenue supported the assessment order. 4. Learned AR of the assessee supported the order of CIT (A). - 8 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 5. I have considered the rival submissions. Ground No. 1, 4 and 5 are general and no separate adjudication is called for in respect of these grounds. Regarding Ground No. 2, I find that this is now a settled position that if related party transactions (RPT) are above 15% of turnover then the concerned company is not an uncontrolled company and therefore, it cannot be considered as a comparable. Hence, I modify the order of the learned CIT (A) on this issue and restore this matter to the A.O. with the direction that he should exclude those companies which are having RPT above 15% from the final list of comparables. Regarding Ground No.3, I find that this is now a settled position that if the difference in the ALP and the price charged by the assessee is below +/- 5% then no TP Adjustment is to be made but if it is more than 5% than the assessee gets no benefit as per Proviso to Section 92C (2) of the I. T. Act, 1961. I hold accordingly and the order of CIT (A) on this issue is reversed and that of the A.O. is restored. Ground No.3 is allowed. 6. In the result, the appeal of the revenue is allowed in above terms." (Emphasis added) 12. The Tribunal reserved liberty to the Revenue to initiate proceedings afresh as observed hereinabove. The order of the Tribunal is dated 16.09.2016. In terms of Section 153 of the Act, the limitation would commence from 31.03.2017 and would end within 9 months from the said date, which would be - 9 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 31.12.2017. This is the purport of the Statute. The proceedings were not started afresh. The petitioner then addresses a communication to the Assessing Officer requesting a draft assessment order to be passed in terms of the order passed by Tribunal, for the aforesaid years. Seven years have passed by, no order is passed except an order in the file of the Transfer Pricing Officer under Section 92CA of the Act, that would not serve the rigour of the Statute under Section 153(4), 153(5) and 153(7) of the Act. 13. In the light of no communication sent to the assessee of any draft assessment order, commencing the proceedings in terms of the order passed by the Tribunal within the limitation i.e., 31.12.2017, any further action now sought to be permitted, would on the face of it, be without jurisdiction. 14. In that light, the petition deserves to succeed with the prayers to be answered in favour of the petitioner. - 10 - HC-KAR NC: 2025:KHC:32648 WP No. 4474 of 2024 15. For the aforesaid reasons, the following: ORDER (i) Writ Petition is allowed. (ii) The respondent-Revenue is directed to refund an amount of Rs.12,62,160/- together with applicable interest, for the assessment year 2005-06. (iii) The respondent-Revenue shall refund the aforesaid amount within an outer limit of twelve (12) weeks along with the applicable interest. Sd/- (M.NAGAPRASANNA) JUDGE SJK List No.: 1 Sl No.: 38