- 1 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 05TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19354 OF 2021 (T-IT) BETWEEN: 1. EMIDS TECHNOLOGIES PRIVATE LIMITED CHAMPAK PRAGATHI TOWERS SURVEY NO.3/2 HOSUR MAIN ROAD BOMMANAHALLI BANGALORE – 560 068. REPRESENTED HEREIN BY ITS VICE PRESIDENT - FINANCE MR. LAKSHMIKANTH GOPALAKRISHNA …PETITIONER (BY SRI. T SURYANARAYANA, SR. COUNSEL APPEARING FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX INCOME-TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE DELHI Digitally signed by SREEDHARAN BANGALORE SUSHMA LAKSHMI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1)(1) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD 6TH BLOCK, KORAMANGALA BENGALURU – 560 095. 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX-2 BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA BENGALURU – 560 095. …RESPONDENTS (BY SRI. RAVI RAJ Y V, ADVOCATE AND SRI. M DILIP, ADVOCATE) THIS WP FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 23.09.2021 (ANNEXURE-A) BEARING DIN ITAB/AST/S/143(3)/2021- 22/1035840964(1) PASSED BY THE RESPONDENT NO.1 U/S 143(3) R/W SECTION 144B OF THE IT ACT FOR THE ASSESSMENT YEAR 2018-19 AND QUASH THE DEMAND NOTICE DATED 23.09.2021 (ANNEXURE-B) ISSUED BY THE RESPONDENT NO.1 U/S 156 OF THE ACT FOR THE ASSESSMENT YEAR 2018-19 AND ETC., THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR - 3 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 ORAL ORDER In this petition, the petitioner seeks the following reliefs:- " (a) Quashing the order dated 23.09.2021 (Annexure- A) bearing DIN ITBA/AST/S/143(3)/2021- 22/1035840964(1) passed by the Respondent No.1 under Section 143(3) read with Section 144B of the IT Act for the assessment year 2018-19; (b) Quashing the demand notice dated 23.09.2021 (Annexure-B) bearing DIN ITBA/AST/S/156/2021- 22/1035840991(1) issued by the Respondent No. 1 under Section 156 of the Act for the assessment year 2018-19; (c) Quashing the penalty notice dated 23.09.2021 (Annexure-C) bearing DIN ITBA/PNL/S/270A/2021- 22/1035840977(1) issued by the Respondent No.1 under Section 274 read with Section 270A of the IT Act, proposing to levy penalty for the assessment year 2018-19; and (d) 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 learned Senior Counsel for the petitioner and learned counsel for the respondents – Revenue and perused the material on record. - 4 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 3. A perusal of the material on record, including the impugned orders, will indicate that the subject matter of the present petition, the issue and controversy involved in the present petition are directly and squarely covered by the judgment of this Court in the case of Essilor India Pvt. Ltd., v. The Deputy Commissioner of Income Tax & Others1. "In this petition, petitioner has sought for the following reliefs:- " (i) quashing the order dated 08.11.2019 bearing No. ITBA/AST/F/17/2019- 20/1020020805(1) passed by the 1st Respondent (Annexure-S) rejecting the Petitioner's objections to reopening of the assessment; (ii) quashing the order dated 18.10.2019 (Annexure-N) bearing No. ITBA/TPO/F/17/2019-20/1019079147(1) passed by the 2nd Respondent under Section 92CA O the Act for the assessment year 2015- 16; (iii) quashing the final assessment order dated 13.12.20 bearing No. ITBA/AST/M/147/2019-20/1022290754 passed by the 1st Respondent (Annexure-T) un Section 143(3) read with Section 147 of the Act for assessment year 2015-16; (iv) Quashing the corrigendum bearing No. ITBA/COM/F/17/201-20/1022424645(1) dated: 16.12.2019 issued by the 1st Respondent (Annexure-W); (v) Quashing the order dated: 20.01.2020 passed by the 1st Respondent under Section 1 Writ Petition No.3410/2020 dated 15.10.2025 - 5 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 143(3) read with Section 147 and 144C of the Act bearing No.ITBA/AST/M/147/2019- 20/1024024629(1) (Annexure-X) for the assessment year 2015-16 and the consequent notice dated: 20.01.2020 issued by the 1st Respondent under Section 156 of the Act (Annexure-Y) bearing No.ITBA/AST/M/147/2019-20/1024024629(1); and (vi) passing such other or further order as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity." 2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents – Revenue and perused the material on record. 3. A perusal of the material on record will indicate that on 30.11.2015, the petitioner filed I.T. returns for the assessment year 2015-16, pursuant to which, the 1st respondent issued a Notice dated 18.09.2017 under Section 148 of the I.T.Act seeking to re-open the assessment of the petitioner under Section 147 of the I.T.Act. On 02.11.2017, the petitioner requested the 1st respondent to furnish copy of the reasons recorded for reopening of the assessment which was furnished by the respondents on 11.09.2018, to which the petitioner filed the objections on 15.10.2018. It is seen that without disposing of the objections filed by the petitioner, the 1st respondent made a reference to the Transfer Pricing Officer (TPO) under Section 92CA of the I.T.Act in October 2018 without informing or notifying the petitioner. - 6 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 4. It is contended that subsequently on 23.10.2018, the 2nd respondent issued a notice to the petitioner informing him about the commencement of the proceedings under Section 92CA of the I.T.Act calling for certain details, which was followed by a notice dated 15.05.2019 under Section 271G of the I.T.Act, the petitioner not only furnished the details vide Annexure-E dated 23.05.2019 but also replied to the notice issued under Section 271G of the Act on 23.05.2019 requesting to drop the penalty proceedings; so also, petitioner addressed a letter dated 28.05.2019 to the 1st respondent to dispose of the objections filed to the reasons recorded before proceeding with the assessment. 5. The material on record also discloses that on 24.07.2019, the 2nd respondent issued a notice to the petitioner proposing to make a transfer pricing adjustment with regard to the advertising, marketing and promotional expenses incurred by the petitioner. Aggrieved by the same, the petitioner approached this Court in W.P.No.43994/2019, which was disposed of by the co-ordinate Bench of this Court vide final order dated 12.11.2019. Meanwhile, the petitioner filed objections dated 01.10.2019 to the 2nd respondent proposing to determine the transfer pricing adjustment, pursuant to which, the 2nd respondent passed an order dated 18.10.2019, subsequent to which, the 1st respondent issued Notice dated - 7 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 02.12.2019, to which the petitioner filed its objections dated 06.12.2019. 6. In pursuance of the aforesaid facts, circumstances and events, the 1st respondent passed the final assessment order dated 13.12.2019 vide Annexure-T under Section 143 r/w 147 of I.T.Act followed by a Demand notice under Section 156 of the I.T.Act. Thereafter, the 1st respondent issued Corrigendum at Annexure-W dated 16.12.2019 informing the petitioner that the final assessment order dated 13.12.2019 is to be construed, read and treated as a Draft assessment order. 7. In the first instance, the petitioner approached this Court seeking the aforesaid relief of challenging the Draft assessment order and corrigendum etc., Subsequently, during the pendency of the present petition, the 1st respondent passed one more order at Annexure-X dated 20.01.2020 followed by a Notice at Annexure-Y dated 20.01.2020. In the said 2nd assessment order, the 1st respondent specifically stated that the earlier order dated 13.12.2019 was only a Draft assessment order and as such, it is permissible to pass fresh assessment order. 8. Learned Senior counsel for the petitioner invited my attention to the impugned assessment order at Annexure-T dated 13.12.2019 followed by a demand notice at Annexure-V dated 13.12.2019 in order to point out that the said order clearly discloses that it - 8 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 was a final assessment order and not draft assessment order as sought to be contended by the respondents. It is submitted that upon passing of the final assessment order followed by a demand notice, it is impermissible in law for respondents to classify, construe or treat the same as draft assessment order and thereafter, issue one more final assessment order as held by the Division Bench of this Court in the cases of Prl.Commissioner of Income Tax-2 & Anr. vs. M/s.Cisco Systems Capital (India) Pvt. Ltd., - I.T.A. No.128/2021 - Dated 20.09.2021 and The Prl. Commissioner of Income Tax and Another. vs. M/s Alpha Elsec Defence and Aerospace Systems Pvt. Ltd., - I.T.A. No. 48/2024 dated 19.08.2025. It is therefore submitted that the impugned assessment orders, notices etc., deserves to be quashed. 9. Per contra, learned counsel for the respondents – revenue would support the impugned orders, notices etc., and submits that there is no merit in the petition and that the same is liable to be dismissed. 10. The issue as to whether revenue would be entitled to pass the second assessment order after passing the earlier first assessment order followed by a demand notice is no longer resintegra in the light of the judgment of this Court in the case of Google Ireland Limited vs. Assistant Commissioner of Income Tax (International Taxation) - W.P.No.1730/2019 dated 03.06.2025. - 9 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 11. In the instant case, it is an undisputed fact that a bare perusal of the impugned assessment order at Annexure-T will indicate that it is a final assessment order, especially when the same has been followed immediately by a Demand notice which confirms the same as a final assessment order and not draft assessment order as sought to be contended by the respondents. Though the 1st respondent purports to have issued corrigendum informing the petitioner that the earlier assessment order dated 13.12.2019 shall be treated as draft assessment order, the said contention cannot be accepted in view of the demand raised by the respondents immediately upon passing the earlier assessment order. 12. In fact, in Google Ireland's case supra, it was held that after issuing the final assessment order and demand notice, it was not permissible for the respondent-revenue to circumvent the same and issue a corrigendum informing the petitioner to treat the said final assessment order as the draft assessment order and the said contention was negatived by this Court in the aforesaid judgments. 13. Under these circumstances, I am of the considered opinion that the impugned assessment orders, notices, Corrigendum at Annexures – T, V, W, X and Y respectively deserves to be quashed. 14. In the result, I pass the following:- - 10 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 ORDER (i) Petition is hereby allowed. (ii) The impugned assessment order at Annexure-T dated 13.12.2019, the impugned Demand notice at Annexure-V dated 13.12.2019, the impugned Corrigendum at Annexure-W dated 16.12.2019, the impugned assessment order at Annexure-X dated 20.01.2020 and the impugned demand notice at Annexure-Y dated 20.01.2020 issued / passed by the respondents are hereby quashed and set aside." 4. In view of the aforesaid judgment of this Court in Essilor India Pvt. Ltd., (supra) coupled with the undisputed fact the draft assessment order was not passed by the respondent before passing the impugned assessment order, I deem it just and appropriate to quash the impugned assessment order and all proceedings in pursuance of the same. 5. In the result, I pass the following:- ORDER (i) The Writ Petition is hereby allowed. - 11 - HC-KAR NC: 2025:KHC:51178 WP No. 19354 of 2021 (ii) The impugned assessment order at Annexure-A dated 23.09.2021, the impugned demand notice at Annexure-B dated 23.09.2021 and the impugned penalty notice at Annexure-C dated 23.09.2021 issued / passed by the respondent No.1 are hereby quashed. Sd/- (S.R.KRISHNA KUMAR) JUDGE BSS List No.: 2 Sl No.: 42