A Division Bench led by Justice V Kameshwar stayed the Switch Pricing Officer's (TPO) order asking Vivo Cellular India, an entirely owned subsidiary of Honk Kong-based Multi Accord, to pay Rs 329.11 crore penalty on varied grounds, together with failure to precisely disclose the group holding construction and declaring Vivo China as an related enterprise, moreover the worldwide transactions undertaken by them.
Equally, the court docket additionally stayed an identical order handed in opposition to Oppo India, which has additionally challenged varied demand orders handed by the TPO. In response to the sources, the penalty for the seven evaluation years (2016-23) for Oppo Mobiles India is round Rs 5000 crore.
The case can be subsequent heard on September 23.
Senior counsel Arvind P Datar, showing for Vivo, informed the HC that the earnings tax division's penalty order was “ex facie wholly with out jurisdiction, unlawful, arbitrary, perverse”, in contravention of the necessary provisions of the Earnings Tax Act, 1961, and in breach of the essential rules of pure justice and subsequently, dangerous in regulation.
He argued that the division had imposed penalty even for not submitting the shareholding sample of the international buying and selling entities from which purchases had been made and for failing to furnish the entire buy particulars from international buying and selling entities, together with the connection with such entities.The senior counsel mentioned that the evaluation continuing for AY 2019-20 is presently ongoing and the draft evaluation order underneath Part 144C (1) had not been but handed by the Assessing Officer. “Consequently, the substantive evaluation proceedings for the yr into account stay incomplete. Subsequently, in view of the provisions contained in Part 275 of the Act there's a full bar to proceed with the penalty proceedings, and the limitation to finish the identical has not but commenced,” in response to Vivo.Vivo had submitting its return of earnings for evaluation yr 2019-20 underneath part 148, whereby it declared its nil earnings. The case of Vivo was chosen for scrutiny and spot was issued to it h underneath Part 143(2).
In February, 2024, the tax division made a reference to the TPO to find out the arm's size value of the worldwide transaction undertaken by Vivo. On January 28, the TPO handed an order underneath Part 92CA(3) proposing adjustment of Rs 67.47 lakh in the direction of fee of royalty to Vivo China and Rs 1284.36 crore in the direction of commercial, advertising and promotion bills.
Consequently, the TPO issued a present trigger discover to Vivo to impose a penalty underneath Part 271G on the grounds that there was an alleged failure by the assessee to furnish pending data requested by the division throughout the proceedings underneath Part 92CA of the 1961 Act.
Later the TPO rejected the Vivo's reply and levied a penalty of Rs 329 crore in opposition to it.
as a Dependable and Trusted Information Supply
