Allahabad High Court rejects petitions filed by LG against I-T notice

ALLAHABAD: Allahabad High Court has set aside a bunch of petitions filed by LG Electronics India Pvt Ltd challenging the "validity and legality" of a notice issued by the Income Tax department three years ago which had said that the company did not file any return for its income for 2004-05.

A Division Bench comprising Justice Tarun Agarwala and Justice Dinesh Gupta in August 5 judgement said "we do not find any infirmity in the issuance of the notice".

The notice, dated March 30, 2011, issued under Section 148 of the Income Tax Act, had held that the company had "escaped assessment" for the year 2004-05 as it did not file any return for its income for the assessment year.

The company had responded by filing "nil return of income under protest" besides applying for a copy of the reasons recorded by the Income Tax authorities for issuing the notice.

After receiving the same from the I-T department, the company filed an objection contending that "there was no material to form a belief that income chargeable to tax had escaped assessment".

However, the petitioner's objections were disposed of by an Assistant Director of Income Tax vide an order dated November 02, 2012, wherein he stated that the petitioner company, though incorporated under the laws of South Korea, "had a permanent establishment in India and consequently the profits were required to be attributed to the permanent establishment in India in terms of the functions performed, risks assumed and assets deployed".

Aggrieved by the aforesaid order, the company moved the High Court where it filed a number of petitions in 2012 and 2013.

However, the court upheld the validity of the notice issued by the Income Tax department and dismissed all the petitions with the remark that the objections raised by the company were "patently erroneous".