WRIT PETITION NO.730 OF 2009

Challenge to orders treating Indian Rayon as representative assessee under Section 163(1) of the Income Tax Act, 1961, and challenge to reassessment notices under Section 148 issued to NCWS, MMMH, and Indian Rayon, and challenge to orders under Section 201 against Tata Industries Limited.

Quashing of the impugned orders and notices.

Revenue authorities sought to tax capital gains arising from transfer of shares of Idea Cellular Limited to Indian entities.

Deputy Director of Income Tax (International Taxation) passed order dated 25.03.2009 holding Indian Rayon liable as representative assessee of NCWS; order dated 22.01.2010 treating Indian Rayon as representative assessee of MMMH; reassessment notices dated 31.03.2009 to NCWS and MMMH; notice dated 12.02.2010 to Indian Rayon; orders under Section 201 and notices under Section 148 against Tata Industries Limited.

Whether any income chargeable to tax in India accrued to NCWS and MMMH from the share transactions under the Sale and Purchase Agreements dated 28 September 2005. Whether Indian Rayon could be treated as a representative assessee (agent) of NCWS and MMMH under Section 163(1) of the Income Tax Act, 1961. Whether the reassessment notices issued under Section 148 of the Income Tax Act, 1961 to NCWS, MMMH, and Indian Rayon were valid. Whether Tata Industries Limited could be held liable under Section 201(1)/(1A) of the Income Tax Act, 1961 as an assessee in default for failure to deduct tax at source.

the core issue raised in all these four writ petitions is, whether any income chargeable to tax in India has accrued or arisen or deemed to have accrued or arisen in India to New Cingular Wireless Services Inc, USA and MMM Holdings LLC, USA, which has subsequently merged with NCWS, on account of share transactions under two Sale and Purchase Agreements both dated 28th September 2005. Writ Petition No.730 of 2009 is filed by Aditya Birla Nuvo Limited, formerly known as Indian Rayon and Industries Limited to challenge the order dated 25th March 2009, whereby the Deputy Director of Income Tax (International Taxation) – 4(1), Mumbai has held that Indian Rayon is liable to be assessed as a representative assessee (agent) of NCWS under Section 163(1) of the Income Tax Act, 1961 in respect of the capital gains accrued to NCWS on transfer of shares of Idea Cellular Limited. The JVA, the material agreements and all such other agreements and written obligations entered into and undertaken in connection with the transactions contemplated under the JVA and other agreements would be legally binding obligations of AT&T USA and enforceable against AT&T USA.

Deputy Director of Income Tax (International Taxation) passed orders on 25.03.2009 and 22.01.2010 treating Indian Rayon as representative assessee of NCWS and MMMH respectively; reassessment notices under Section 148 issued to NCWS and MMMH on 31.03.2009 and to Indian Rayon on 12.02.2010; parallel proceedings under Section 201 and Section 148 initiated against Tata Industries Limited. The four writ petitions challenging these actions were filed and heard together by the Bombay High Court. Judgment reserved on 05.05.2011 and pronounced on 14.07.2011.

• Income Tax Act, 1961: 163(1), 148, 201(1), 201(1A)