Relief for Uber India after Bombay HC stays I-T notice demanding amount of Rs 109 crore

The Bombay High Court on Tuesday temporarily stayed the order involving notices issued by the Income Tax (I-T) department to Uber India Systems Private Limited, demanding a sum of Rs 109 crore for dialing to deduct tax at source for payments made to its driver-partners.

A division bench comprising Justice M S Sanklecha and Justice Riyaz Chagla have stayed the notice until March 1, and sought a reply from the department. The stay order came after Uber challenged the I-T department’s demand that was passed on February 7, claiming that the notice issued was ‘bad in law’.

The I-T department had made the demand under Section 201 (1) (1A) of the Income Tax Act for the assessment years, 2016-2017 and 2017-2018.

“Calling for submission of payment details made to drivers within a short period of time is bad in law. The entire proceedings conducted by the Income Tax Department have been done in a high handed and unfair manner,” Uber said.

The court after going through the records held that passing of the order without completion of the expiry period of 30-days is in complete violation of Section 220 of the Act. “Since the assessing officer has not given any reason to believe that giving the full 30 days period may be detrimental to the interest of the revenue, thus the demand notices are prima facie in breach of the statutory provision,” the bench observed.

Advocate Suresh Kumar appearing for the department opposed the plea saying, company had an alternative remedy of appeal, which was not availed before rushing to the HC. However, this was rejected by the bench that said, “It appears that orders are completely without jurisdiction being in breach of principles of natural justice, as the orders were passed much before the time given to the petitioner to respond to its query. Therefore, prima facie this would be a fit case to exercise our extraordinary jurisdiction to interfere with the impugned orders.”