The Assistant Commissioner of Income-Tax has issued demand notices for 1,100 crore, however the Income Tax department has informed the High Court of Karnataka that Flipkart India Private Limited won’t be subjected to any coercive measures. The corporation had submitted two writ petitions contesting the demand notifications for the assessment years 2016–17 and 2018–19 that were sent out on January 31, 2023. In his interim ruling on February 6, 2023, Justice BM Shyam Prasad noted the Department’s pledge against coercive action till the next hearing date on February 24.
However, the court noted in its interim ruling that no coercive action may be taken during the appeal process and as a result, coercive action will not be taken. The respondent’s argument was that there could not be a legal prohibition against the issuance of notice.
This guarantee will remain in effect until the next hearing date, and the office has been instructed to relist this petition on February 24, 2023, the HC stated.
ESOP cross charges totaling 4,500 crore for 2016–17 and 180 crore for 2018–19 had been rejected by the Department. Thus, it has supported classifying discounts as marketing intangibles. Flipkart was represented by senior attorney Tarun Gulati.
K V Aravind, the department’s permanent attorney, was asked to receive the notification. The petitioner’s complaint that notices as per Annexure-B are issued in both of these petitions “before the period provided to prefer appeal against the order dated 31.01.2023” caused the court to group the two applications filed by Flipkart together.
