- 1 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 4592 OF 2021 (T-IT) BETWEEN: GOLDMAN SACHS AND CO LLC (ETSTWHILE GOLDMAN SCHTS & CO) 200, WEST STREET, NEWYORK UNITED STATES. PAN: AAGCG9387H (ERSTWHILE AAFFG0079G) THROUGH ITS AUTHRIZED SIGNATORY MR SRIVATHSAN PARTHASARATHY S/O SRINIVASARAGAVAN PARTHASARATHY AGED ABOUT 55 YEARS OCCUPATION SERVICE R/AT 880, BHADRA NILAYA 12TH MAIN ROAD, 3RD BLOCK KORAMANGALA, BENGALURU – 560 034. …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR COUNSEL APPEARING FOR SRI. BALACHANDRAN B S.,ADVOCATE) AND: 1. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONA TAXATION)CIRCLE-1(1) ROOM NO. 441, 4TH FLOOR BMTC BUILDING 80FT. ROAD, KORAMANAGALA, BENGALURU 560 095. 2. THE UNION OF INDIA THROUGH THE SECRETARY GOVERNMENT OF INDIA MINISTRY OF FINANCE NEW DELHI 110 001. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE) Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS OF THE PETITIONERS CASE AND AFTER EXAMINING THE LEGALITY AND VALIDITY THEREOF QUASH AND SET ASIDE THE IMPUGNED NOTICES DATED 28.03.2019 ANNEXURE-R AND NOTICE DATED 31.03.2019 ISSUED BY THE R1 U/S 148 OF THE ACT FOR THE A.Y 2012-13 ANNEXURE-S AND THE IMPUGNED ORDER DATED 31.12.2020 PASSED BY THE R1 FOR A.Y.2012-13 ANNEXURE-AF AND ORDER DATED 07.01.2021 ANNEXURE- AG AND THE NOTICE DATED 06.02.2021 (ANNEXURE-AL) ISSUED BY R-1 U/S 142(1) OF THE ACT FOR THE A.Y.2012-13. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “(a) To issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 and/or 227 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof quash and set aside the impugned Notice dated 28.03.2019, in F.No. 148/DCIT(IT)/C-1(1)/2018 19(ANNEXURE 'R') and Notice dated 31.03.2019 F.No ITBA/AST/S/148/2018- 19/1015630653(1) issued by the Respondent No. 1 under section 148 of the Act for the AY 2012. 13(ANNEXURE 'S') and the Impugned Order dated 31.12.2020 passed by the Respondent No.1 for AY 2012-13 ITBA/COM/F/17/2020- - 3 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 21/1029399395(1)(ANNEXURE 'AF’) and order dated: 17.01.2021 ITBA/COM/F/17/2020- 21/1029580581(1)(ANNEXURE 'AG') and the notice No ITBA/AST/F/142(1)/2020-21/1030413812(1) dated 06.02.2021 (ANNEXURE 'AL") issued by Respondent No. 1 under section 142(1) of the Act for the AY 2012-13: (b) that this Hon'ble Court be pleased to issue a Writ of Prohibition or a writ in the nature of Prohibition or any other appropriate writ, order or direction under Article 226 and/ or Article 227 of the Constitution of India ordering and directing Respondents or their subordinate servants and agents to refrain from taking any steps pursuant to the Impugned Notice dated 28.03.2019 in F.No. 148/DCIT(IT)/C-1(1)/2018- 19(ANNEXURE 'R') and Notice dated 31.03.2019 in F.No.ITBA/AST/S/148/2018-19/1015630653(1) issued by the Respondent No. 1 under section 148 of the Act for the AY 2012-13 (ANNEXURE 'S') and the Impugned Order dated 31.12.2020 passed by the Respondent No.1 for AY 2012-13 in ITBA/COM/F/17/2020-21/1029399395(1) (ANNEXURE 'AF') and order dated 07.01.2021 in ITBA/COM/F/17/2020- 21/1029580581(1) (ANNEXURE 'AG'); and the notice No.ITBA/AST/F/142(1)/2020-21/1030413812(1) dated 06.02.2021 (ANNEXURE-AL”) issued by Respondent No. 1 under section 142(1) of the Act for the AY 2012-13; (c) that pending the hearing and final disposal of this Petition, this Hon'ble Court be pleased to, by an interim order and injunction restrain the Respondents, their subordinate, servants and agents from acting upon or taking any further - 4 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 proceedings in pursuance of and/or in implementation and/or in furtherance of the Impugned Notice dated 28.03.2019 in in F.No. 148/DCIT(IT)/C-1(1)/2018-19(ANNEXURE 'R') and Notice dated 31.03.2019 in F.No.ITBA/AST/S/148/2018- 19/1015630653(1) issued by the Respondent No.1 under section 148 of the Act for the AY 2012-13 (ANNEXURE 'S') and the Impugned Order dated 31.12.2020 passed by the Respondent No.1 for AY 2012-13 in ITBA/COM/F/17/2020- 21/1029399395(1)(ANNEXURE 'AF') and order dated 07.01.2021 in ITBA/COM/F/17/2020- 21/1029580581(1)(ANNEXURE - 'AG'); and the notice No.ITBA/AST/F/142(1)/2020-21/1030413812(1) dated 06.02.2021 (ANNEXURE 'AL') issued by Respondent No. 1 under section 142(1) of the Act for the AY 2012-13; (d) for interim relief in terms of prayer (c) above; (e) for costs of the Petition and orders thereon; and (f) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case.” 2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that the Petitioner is a Limited Liability Company incorporated in the United - 5 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 States of America and is a successor to the erstwhile partnership firm Goldman Sachs & Co. w.e.f. 28.04.2017. For the assessment year 2012-13, a return of income was filed by the Petitioner for the assessment year 2012-13 under Section 139(1) of the Income Tax Act, 1961 ( for short ‘the I.T.Act) with an Assessing Officer in Mumbai. In the Form 3CEB, filed along with the return of income, the Petitioner interalia reported the transaction of reimbursement of salary received from its group company namely, Goldman Sachs Services Pvt. Ltd. (“GSSPL”) on account of secondment of expatriate employees to it. The return of income for the assessment year 2012-13, was selected for scrutiny assessment by issuance of a notice under section 143(2) of the I.T.Act. 4. During the course of the assessment proceedings, the Assessing Officer at Mumbai, interalia, raised queries with respect to the aforesaid transaction of reimbursement of salary received from GSSPL and required the Petitioner to submit details with respect to the same. The Petitioner vide its letter dated 12.01.2016 submitted the details of reimbursement of salary received for the previous year relevant to the assessment year 2012-13 and explained that the aforesaid receipt is not chargeable to tax, since - 6 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 the same represents reimbursement of expenses incurred and is not in the nature of income under Section 2(24) of the I.T.Act. Thereafter, vide another letter dated 20.01.2016, the Petitioner explained that tax under Section 192 of the I.T.Act is deducted by GSSPL on the salary that is paid to the employees seconded to it. In this regard, the Petitioner submitted various documentary evidence with the Assessing Officer at Mumbai. On 04.02.2016, the Petitioner further submitted salary slips of the employees seconded to GSSPL which gave complete details of the break of up of salary. 5. On 28.03.2016, the Assessing Officer in Mumbai passed a draft assessment order, wherein he did not make any addition on account of reimbursement of salary received from GSSPL holding the same to be not in the nature of income. However, he made an addition to the total income of the Petitioner on account of another transaction, which was later on deleted by the Dispute Resolution Panel vide order dated 08.12.2016. Accordingly, on 30.12.2016, a final assessment order was passed by the Assessing Officer at Mumbai accepting the income declared in the return of income filed by the Petitioner. - 7 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 6. Thereafter, on 28.03.2019, the Petitioner received a Notice under Section 148 of the I.T.Act reopening the assessment for the assessment year 2012-13 from an Assessing Officer in Bengaluru i.e., Respondent No.1. On 31.03.2019, another notice was received by the Petitioner under Section 148 of the I.T.Act for assessment year 2012-13 from Respondent No.1, to which, petitioner filed its objections dated 08.04.2019. On 08.04.2019, the Petitioner filed its objections for the reopening of the assessment under Section 147 of the I.T.Act. On 27.11.2019, Respondent No.1 served the reasons for reopening the assessment for the assessment year 2012-13, which stated that an order under Section 201(1) of the Act was passed in the hands of GSSPL for assessment year 2012-13, in respect of non-deduction of tax at source on the payments made to the Petitioner towards reimbursement paid of salary of the seconded employees. The said payments were held as fees for technical services (“FTS”) in the order dated 22.02.2019 that was passed in case of GSSPL treating it as an assessee in default for not deducting tax at source. Since the Petitioner had not offered to tax the amounts received from GSSPL for the year under consideration, the income had escaped - 8 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 assessment for the assessment year 2012-13, petitioner issued a reply/objections dated 16.12.2019 reiterating its contentions. 7. By the impugned orders dated 31.12.2020 and 07.01.2021, Respondent No.1 rejected the objections of the Petitioner, thereby upholding reopening of the assessment and issued the impugned notice dated 06.02.2021 under Section 142(1) of the I.T.Act, aggrieved by which, petitioner is before this Court by way of the present petition. 8. The undisputed material on record indicates that after filing of the present petition, the ITAT, Bengaluru passed an order dated 29.04.2022 in case of Goldman Sachs Services Pvt. Ltd. (“GSSPL”) adjudicating the appeal against the order dated 22.02.2019 passed under Section 201 of the I.T.Act, wherein the issue was whether the reimbursement of salary by GSSPL to the Petitioner was taxable in India as FTS under the Act and the DTAA. By the said order, the ITAT reversed the order passed by the respondents under Section 201(1) of the Act for the assessment year 2012-13, and held that the reimbursement of salary by GSSPL on account of employees seconded to it is not chargeable to tax in India as FTS and therefore, GSSPL cannot be treated as an - 9 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 assessee in default in terms of Section 201 of the I.T.Act. The relevant portion of the order of the Tribunal is reproduced as under: “37. Respectfully following the above views expressed by Hon’ble Karnataka High Court in DIT vs. Abbey Business Services India (P.) Ltd., Hon’ble AAR in Cholamandalam MS General Insurance Co. Ltd. (supra), Hon’ble Bombay High Court in case of Marks & Spencer Reliance India Pvt. Ltd. vs. DIT (supra), Hon’ble Delhi High Court in case of DIT vs. HCL Infosystems Ltd. (supra), Coordinate bench of this Tribunal in case of IDS Software Solutions vs. ITO (supra), Hon’ble Pune Tribunal in case of M/s Faurecia Automotive Holding (supra), Hon’ble Ahmedabad Tribunal in the case of Burt Hill Designs (P) Ltd. vs. DDIT (IT) (supra), we are of the view that the reimbursement of made by the assessee in India to overseas entity, towards the seconded employees cannot be regarded as “Fees for Technical Services” Once there is no violation of provisions of section 195, the assessee cannot be held to be an assessee in default under section 201(1) of the Act for all the years under consideration. We there direct the Ld. AO to delete the interest levied under section 201(1A) of the Act for all the year under consideration.” 9. The aforesaid order of the Tribunal was challenged by the Revenue before this Court in the case of Principal Commissioner vs. M/s Goldman Sachs Services Pvt Ltd - ITA - 10 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 No.128/2024 which was dismissed by the Hon’ble Division Bench vide judgment dated 17.09.2025 dismissing the appeal of the Revenue by holding as under: This appeal is filed raising the following common substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in by holding that services rendered by assessee are not in nature of FTS and as such Section 9 of the Act read with provisions of DTAA of respective countries are not applicable by relying upon case of M/s.Abbey Business services India P.Ltd which is distinguishable from the facts of this case and not considering the case of M/s.Centrica India Offshore P. Ltd on identical issue relied upon by Revenue? 2. Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in holding nature of services rendered cannot be said as Fee for Technical Services ignoring that the conditions set out definition clause of in Explanation 2 to Section 9(1)(vii) of the Act and the Double Taxation Avoidance Agreement as well are fully satisfied in present case? 3. Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in ignoring the various clauses of the Agreement which signified that the overseas entity through the employees rendered technical, managerial and consultancy services, thus - 11 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 satisfying FTS as per the provisions of the Act and also under DTAA?” 2. Sri.E.I.Sanmathi, learned Senior Standing Counsel appearing for the appellants-Revenue would contend that the services rendered by the assessee are in the nature of technical services and it would not fall within the employer and employee relationship. Further, learned counsel would refer to page 69 of the paper book, wherein, clauses of the agreements are extracted in the order of the Commissioner of Income Tax, (Appeals) dated 19.02.2020. 3. On hearing learned counsel for the appellants- Revenue, we are of the considered view that the questions raised by the appellants-revenue are answered by the Coordinate Benches of this Court in the case of Director of Income Tax (International Taxation) vs. Abbey Business Services India (P) Ltd., [(2020) 122 taxmann.com 174] and in the case of Deputy Commissioner of Income Tax (International Taxation) and others vs. M/s. Flipkart Internet Pvt. Ltd., [(2025) SCC OnLine Kar 16629]. The Co-ordinate Benches after considering the clauses and the contentions raised by the appellants-Revenue has held that, such technical services provided by the assessee are in the nature of reimbursement which falls within the employer and employee relationship. Thus, we are of the considered opinion that the substantial questions of law raised in this appeal would no more survive for consideration. 4. Accordingly, by following the above two decisions of the Co-ordinate Benches, the above appeal stands dismissed. - 12 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 10. In the instant case, as stated supra, the assessment was reopened on the basis of the order dated 22.02.2019 passed in the case of GSSPL for the assessment year 2012-13; however, since the aforesaid order has been reversed by the Tribunal and confirmed by the Hon’ble Division Bench of this Court as stated supra, the whole basis of the reopening the assessment stands obliterated and ceases to survive. It is well settled that once the order on the basis of which reassessment is initiated is set aside by any proceeding by an authority, the entire foundation for reopening of the assessment disappears in law and ceases to exist any longer as held in the cases of (i) Oracle Systems Corporation vs. DCIT [2017] 82 taxmann.com 431 (Del.), (ii) Patel Stationers Pvt. Ltd. vs. ACIT (WP No. 142 of 2005) (Bom.) and (iii)Dr. Bindeshwar Pathak vs. CIT [2012] 20 taxmann.com 845 (Patna). 11. In view of the aforesaid facts and circumstances, I am of the considered opinion that the impugned notices and orders passed by the respondents deserve to be quashed on this ground alone by keeping/leaving open all other contentions to be decided subsequently, if the need / occasion so arises. - 13 - HC-KAR NC: 2025:KHC:47742 WP No. 4592 of 2021 12. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned notice at Annexure- R dated 28.03.2019; impugned notice at Annexure-S dated 31.03.2019; impugned order at Annexure-AF dated 31.12.2020; impugned order at Annexure- AG dated 07.01.2021 and impugned notice at Annexure-AL dated 06.02.2021 issued / passed by the 1st respondent are hereby quashed / set aside. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV/SRL List No.: 2 Sl No.: 2