Karnataka High Court
Blue Yonder India Private Limited vs Deputy/Assistant Commissioner Of ... on 11 September, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2025:KHC:36003
WP No. 14156 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 14156 OF 2025 (T-IT)
BETWEEN:
BLUE YONDER INDIA PRIVATE LIMITED
(ERSTWHILE KNOWN AS JDA
SOFTWARE PRIVATE LIMITED
AND EARLIER KNOWN AS 12
TECHNOLOGIES INDIA PRIVATE LIMITED)
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956
TOWER A, MANTRI COMMERCIO
OUTER RING ROAD, BELLANDUR
BENGALURU - 560 103
REPRESENTED HEREIN BY ITS
DIRECTOR, FINANCE
ANEESH KARUNAKARAN.
Digitally signed ...PETITIONER
by NAGAVENI
Location: HIGH (BY SRI T.SURYANARAYANA, SENIOR ADVOCATE A/W.,
COURT OF SRI TANMAYEE RAJKUMAR, ADVOCATE)
KARNATAKA
AND:
1. DEPUTY/ASSISTANT COMMISSIONER
OF INCOME TAX
CIRCLE 1(1) (1), BANGALORE
80 FEET ROAD
BMTC BUILDING, KORAMANGALA
BENGALURU - 560 095.
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WP No. 14156 of 2025
HC-KAR
2. PRINCIPAL COMMISSIONER OF
INCOME TAX -1
80 FEET ROAD
BMTC BUILDING, KORAMANGALA
BENGALURU - 560 095.
3. CENTRALIZED PROCESSING CENTER
REPRESENTED HEREIN BY THE
DEPUTY DIRECTOR OF INCOME TAX, CPC,
BENGALURU - 560 500.
4. DIRECTOR GENERAL OF INCOME TAX (SYSTEMS)
ARA CENTRE,
GROUND FLOOR, E-2,
JHANDEWALAN EXTENSION
NEW DELHI - 110 055.
...RESPONDENTS
(BY SRI Y.V.RAVIRAJ, ADVOCATE AND
SRI M.DILIP, AVOCATES FOR R1 AND R2;
SRI ARAVIND V.CHAVAN, ADVOCATE FOR R3 TO R4)
THIS W.P. IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECT THE
RESPONDENTS TO FORTHWITH REFUND AN AMOUNT OF RS.
19,89,19,122/- TOGETHER WITH APPLICABLE INTEREST FOR
THE ASSESSMENT YEAR 2003-04.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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NC: 2025:KHC:36003
WP No. 14156 of 2025
HC-KAR
CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus, directing the respondents to refund an amount of ₹19,89,19,122/- along with applicable interest.
2. Heard Sri T. Suryanarayana, learned senior counsel for the petitioner, Sri Y.V.Raviraj and Sri M.Dilip, learned counsel for respondent Nos.1 and 2 and Sri Aravind V. Chavan, learned counsel for respondent Nos.3 and 4.
3. Facts in brief, germane, are as follows:
Petitioner is a company engaged in the business of providing software development, marketing, consultancy and related services to Blue Yonder inc., which was earlier known as i2 Technologies Inc. and its affiliate companies. For the assessment year 2003-04, return of income filed by the petitioner was picked up for scrutiny assessment and in the course of the assessment proceedings, the Transfer Pricing -4- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR Officer passes an order determining transfer pricing adjustments. This led to the petitioner approaching the Commissioner of Income Tax (Appeals) by filing an appeal. On 31.01.2014, in terms of the order, the appeal comes to be partly allowed in favour of the petitioner - assessee. Aggrieved by the order dated 31.01.2014, the petitioner and the Revenue both preferred appeals before the Tribunal. The Tribunal in terms of its order dated 03.04.2017 disposes the appeals, remitting the matter back for determination of certain issues before the Transfer Pricing Officer, with a direction to consider the said issue afresh, in accordance with the observations made in the course of the order dated 03.04.2017.
4. The impugned order was passed on 03.04.2017. Time ticked and the Transfer Pricing Officer did not initiate any proceedings in terms of the liberty that was granted by the Tribunal. After about 2 years, the Transfer Pricing Officer on 24.10.2019, passed an order by reducing the transfer pricing adjustment to ₹5,82,35,865/-. On 04.01.2021, the petitioner comes to know about the order passed by the Transfer Pricing Officer that a demand of ₹3,60,34,760/- was appearing as -5- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR outstanding, on the income tax portal, for the year under consideration, emanating from an earlier intimation dated 20.02.2004. The petitioner then is said to have communicated to the respondents seeking all necessary information with regard to the observation that was found on 04.01.2021. The petitioner is then given to understand by the communication that for the assessment year 2003-04, the impugned demand was raised. The petitioner files his objections to the demand that was shown in the income tax portal and seeks refund of the amount that is already paid as respondent No.3 has not taken any action in terms of the liberty granted by the Tribunal while disposing the aforesaid appeal. Non-consideration of the representation or claim of the petitioner seeking refund, the petitioner is before this Court in the subject petition.
5. Sri T. Suryanarayana, learned senior counsel appearing for the petitioner would submit that the issue in the lis stands answered by several judgments rendered by the division bench and coordinate bench in several writ petitions, few of which are W.A.No.1619/2024, disposed on 05.08.2025, W.A.No.68/2024 disposed on 06.08.2025 and W.P.No.16223/2023 disposed on -6- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR 05.02.2024. He would submit that the division bench in W.A.No.68/2024, in the case of ASSISTANT COMMISSIONER OF INCOME TAX VS. UNITED SPIRITS LTD., clearly hold that if the Transfer Pricing Officer has not exercised the liberty that is granted by the Tribunal while passing an order, on account of delay the petitioner - assessee would be entitled to the relief of refund, for a particular assessment year, which was the subject matter before the Tribunal.
6. Learned counsel appearing for all the respondents would in unison to buttress their submissions, seek to place reliance upon Sub-section (9) of Section 153 of the Income Tax Act, that would prevail and the Transfer Pricing Officer is entitled to pass consequential orders at any point in time. They would seek to defend the action of the respondents in not passing any order, pursuant to the liberty granted by the Tribunal on the score that there has been three mergers of the subject company and therefore, the orders are not passed. They further submit that the orders are not passed in the light of the jurisdiction of the respondents - Officers changing on -7- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR account of the mergers of the petitioner. They would seek dismissal of the petition.
7. I have given my anxious consideration to the submissions made by the respective learned counsel for the parties and have perused the material on record.
8. The afore-narrated facts link in the chain of events and the dates are not in dispute. The issue is, whether the petitioner would become entitled to refund that is claimed.
9. The assessment year 2003-04 was picked up for scrutiny assessment is not in dispute. The petitioner files an appeal before the Commissioner of Income Tax (Appeals), who disposes the appeal, which both the Revenue and the assessee get aggrieved and approach the Tribunal. The Tribunal in terms of its order dated 03.04.2017 disposes the appeal by the following order:
"9. We have considered rival submissions. Regarding TP issues, we feel it proper that the entire TP issue should go back to the file of AO/TPO for fresh decision because in respect of three comparable companies i.e. M/s ADCC Research & Computing Centre Ltd. ii) M/s Bodhtree Consulting Ltd and iii) M/s Onward Technologies Ltd. the TPO has considered the data for different accounting year and not for FY: 2002-03. This is by now a settled position -8- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR of law that the data for the same FY should be considered. This is also true that even if a concerned comparable company is adopting a different accounting period as its accounting year then also, the data for relevant FY may be compiled on the basis of quarterly reports of the said company. Hence, we feel it proper that the issue regarding these three comparables has to go back to the file of AO/TPO for fresh decision. We order accordingly. We restore this matter back to the file of AO/TPO for fresh decision with the direction that the AO/TPO should ascertain the availability of data for FY:
2002-03 and if the same is not directly available because the concerned company is adopting different accounting year, he should find out the possibility of compilation of the data for AY: 2002-03 on the basis of quarterly reports of the relevant company by obtaining the same from the said company but only data for FY 2002-03 should be adopted and if it is found that such data for FY: 2002-03 is not available or ascertainable on the basis of quarterly result of that company then such comparable should be excluded from the list of final comparables.
.... ..... ....
11. In view of our above discussion, we hold that the entire TP issue should be decided afresh by the AO/TPO after providing adequate opportunity of being heard to the assessee. Accordingly, ground no.1, 2 & 4 to 7 in respect of TP issues stands allowed for statistical purposes.
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15. From the above Para, it is seen that in that case, it is noted by the Hon'ble High Court that the assessee earned income on export of software and a portion of that income was invested by way of fixed deposits and another portion of that amount is invested by way of loan to the sister concern and on these investments, the assessee earned interest income and under these facts, it is stated by the Hon'ble Karnataka High Court that there is a direct nexus between the interest income and income of the business of the undertaking. In the present case, neither any of the authorities below have examined this aspect nor the relevant facts are available on records before us and hence, we feel it proper to restore this issue also to the file of the AO for fresh decision in the light of this judgment of the Hon'ble Karnataka High Court rendered in the case of CIT VS Motorola India Electronics (P) Ltd.
(Supra) and as per above discussion after providing -9- NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR adequate opportunity of being heard to the assessee. We want to make it clear that the burden is on the assessee to establish this aspect that there is direct nexus between interest income and the business income of the assessee undertaking. Accordingly, these grounds regarding Corporate Tax issues are also allowed for statistical purposes.
.... .... ....
21.From the above paras reproduced from the order of the Id. CIT(A), it is seen is that the Id.CIT(A) has not decided about the assertion of the TPO in Pages 6 & 7 of his order that the assessee company has suppressed its cost and consequently its revenue. When an assessee is receiving remuneration on cost plus basis from its AE then by reducing the cost the assessee, in fact, it reduces its income also and therefore, this aspect has to be examined and decided as to whether the allegation of the TPO is correct or not that the assessee has suppressed its cost by not including the cost to its AE on account of administrative and management support services and for user of various fixed assets received from its AE free of cost. The TPO had also alleged that the assessee had not accounted for its cost regarding stock option granted to the employees of the assessee company by its AE and no doubt, the amount of Rs. 2.00 Crores added by the A. O. also includes the value in respect of such ESOP as well as cost of administrative and management support services received by its AE and the amount payable for using assets of AE. Regarding the value of ESOP, it is held in various Tribunal orders that it is not a part of operating cost and therefore, the value of ESOP has to be excluded from the amount of Rs.2.00 Crores worked out by the TPO as cost of these benefits received by the assessee from its AE without paying anything. Since its working is not available on record, this matter has to go back to the file of AO/TPO for fresh decision in the light of above discussion after providing adequate opportunity of being heard to the assessee. We order accordingly.
.... .... .....
26. As per above discussion, we have seen that none of the judgments relied by the ld. AR of the assessee is applicable in the present case because of difference in facts. Accordingly, ground no.2 & 3 of the revenue's appeal are allowed for statistical
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NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR purposes and the matter is restored back to the file of the AO/TPO for fresh decision by adopting only cost of various services not accounted for by the assessee but after excluding the value of ESOP."
(Emphasis added) The Tribunal while reserving liberty to the Revenue to proceed afresh in terms of the observations made in the course of its order, remits the matter back to the Transfer Pricing Officer and disposes the matter. Time passes by, there is no action taken by the respondents in terms of the liberty so reserved by the Tribunal. The justification of the respondents - Revenue that there were mergers and therefore, no action could be taken is a submission that is noted only to be rejected, for the reason that the order of the Tribunal to be implemented, whether merger or otherwise, would not come in the way.
10. It is an admitted fact that no action is taken pursuant to the order of the Tribunal, which was passed on 03.04.2017. Even otherwise, the issue is completely answered by the judgment rendered by the coordinate bench of this Court in W.P.No.16223/2023, disposed on 05.02.2024, in the case of
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NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR M/S. BIESSE INDIA PVT. LTD. VS. DEPUTY COMMISSIONER. The coordinate bench has held as follows:
"14. As stated supra, the OGE at Annexure-P having been undisputedly passed the during the pendency of the present petition on 23.08.2023, even assuming that Section 153(3) was applicable and not Section 153(5), the due date for passing an order under this provision would also stand lapsed due to lapse of time as hereunder:-
• As per section 153(3) is required to make fresh assessment within 31.12.2018 i.e., 9 months from the end of the financial year in which the order of the Tribunal was received by the authority.
• Date of receipt of the order: 09.08.2017;
• End of Financial year: 31.03.2018;
• Due date: 31.12.2018;
15. It is therefore clear that since the OGE was not passed within the prescribed time limit / period, the returned income of the petitioner has become final and consequently, any tax recovered from the petitioner - assessee beyond the tax on returned income is required to be refunded to the assessee in terms of Section 237 read with Section 240 as held in following cases;
• CIT vs. Shelly Products - [2003] 261 ITR 367; • K. Nagesh vs. ACIT, [2015] 376 ITR 473 (Kar); • United Spirits Ltd. vs. ACIT - (2023) 156 taxmann.com 497 (Kar);
• CIT v. Paul Noel Rodrigues - [2015] 231 Taxman 811 (Kar);
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NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR • Plasticotes Investments (P.) Ltd. vs. CCIT -
[2014] 52 taxmann.com 483 (Bom) • TE Connectivity India (P.) Ltd. v. DCIT - [2022] 138 taxmann.com 148 (Kar);
• Vodafone Idea Ltd. vs. CPC - WP (L) No. 15398/2023 dated 08.11.2023 (Bom).
16. A perusal of the copies of Forms - 26AS and the screen shots of the ITBA portal will also indicate that the respondent has adjusted the refund granted for the Assessment years 2014-15, 2015-16, 2017-18, 2018-19 & 2019-20 against the non-existing demand of the impugned assessment year and as such, it is clear that the respondent has unlawfully adjusted Rs.4,73,27,390/- against a non-existing demand of Rs.4,02,20,200/- warranting interference in the present petition.
17. The aforesaid facts and circumstances clearly establish that the impugned OGE at Annexure-P dated 23.08.2023 is illegal, arbitrary and contrary to law and facts and the same deserves to be quashed and necessary directions are to be issued to the respondent to grant refund of Rs.4,73,27,390/- as stated in the refund application at Annexure-A dated 01.12.2022 filed by the petitioner.
18. Insofar as the claim of the petitioner for interest on refund under Section 244A(1)(b) of the I.T.Act is concerned, it is necessary to state that interest not paid along with the principal refunded would constitute 'any amount' under section 244A(1) and hence, interest on such interest not paid along with the principal amount refunded would also be liable to be paid to the assessee as held in the following decisions:
• CIT vs. H.E.G Ltd., - [2010] 324 ITR 331 (SC);
• CIT vs. Narendra Doshi - [2002] 254 ITR 606 (SC);
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NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR • CIT vs .Syndicate Bank - [2020] 428 ITR 372 (Kar);
• India Trade Promotion Organisation vs. CIT - [2014] 361 ITR 646 (Delhi);
19. Further, interest has to be granted under section 244A(1)(b) from the date of payment of tax up to the date on which refund is granted i.e., up to the credit of amount to the account of the assessee as hereunder:-
• Instruction No. 2 of 2007;
• Circular No. 209 [F. No. 212/485/76(A-II)]
dated 11.01.1977;
• Ingenico International India Pvt Ltd vs JCIT
[WP(C) 5570/2022] (Delhi);
• Wabtec Locomotive Pvt Ltd vs ACIT [W.P.
(C) 4405/2022] (Delhi);
• CIT vs Pfizer Ltd [1991] 191 ITR 626
(Bombay).
20. Insofar as the claim of the petitioner for interest under Section 244A(1A) is concerned, the petitioner - assessee would be entitled to the interest at the rate of 3% per annum in addition to the interest under Section 244A(1)(b) for the period beginning from the date following the date of expiry of the time allowed under section 153(5) to the date on which the refund is granted. In this regard, it is an undisputed fact that for the impugned AY 2012-13, the Tribunal passed an order dated 07.07.2017 partly in favour of the petitioner; as per Section 153(5) of the I.T.Act, the Assessing Officer shall pass an OGE within a period of three months from the end of the month, in which the order under Section 254 is received by the PCCIT or CCIT or PCIT or CIT as held in the following judgments;
• United Spirits Limited v. ACIT- [2024] 464 ITR 67 (Karnataka) (para 22);
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• Wipro Ltd vs JCIT (2021) 438 ITR 581
(Karnataka HC);
• Nokia India (P) Ltd vs DCIT [2018] 407 ITR
20 (Delhi).
21. Thus, it is clear that the additional interest under Section 244A(1A) shall be computed from the expiry of time limit provided under Section 153 (5) till the date of grant of refund and consequently, the petitioner - assessee is entitled for interest under Section 244A(1A) also."
(Emphasis supplied) The division bench of this Court in W.A.No.1619/2024, disposed on 05.08.2025, has affirmed the aforesaid order of the learned single Judge. The judgment reads as follows:
"7. The short question that arises for consideration is, applicability of the provisions of Section 153(3)(ii) as they stood before amendment by the Finance Act, 2016 or Section 153(5) of the Act after amendment. The only issue raised by the revenue is that the provisions as amended by Finance Act, 2016 are not applicable and the time limit is governed by the provisions as existed before the Finance Act, 2016 coming into force. The contention of the revenue cannot be accepted for the following reasons:
Sub-section (9) of Section 153 of the Act provides that the assessment, reassessment or recomputation made before the 1st day of June, 2016 is governed by the provisions as they stood immediately before the commencement of the Finance Act, 2016. In this case, the order of assessment has been passed on 31.01.2017. Hence, the exception under sub-Section (9) of Section 153 of the Act to inapplicability of the Finance Act, 2016 is not applicable in the present case. When once it is held that sub-Section (9) to Section 153 of the Act is not applicable, the applicability of other provisions has to be
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NC: 2025:KHC:36003 WP No. 14156 of 2025 HC-KAR seen. As rightly pointed out by the learned counsel for the assessee, as per sub-section (5) to section 153 of the Act, the order giving effect to the directions of the Tribunal ought to have been passed, within a period of 3 months from the date of receipt of a copy of the order of the Tribunal. In the present case, the order giving effect has been passed on 23.08.2023 beyond the time limit of 3 months as provided under sub-Section (5) to Section 153 of the Act. The learned Single Judge by examining the legal provisions on the time limit to pass orders giving effect to the directions of the Tribunal is justified in declaring the order giving effect dated 23.08.2023 at Annexure-P as time barred. The other reliefs being consequential, needs no interference at the hands of this Court."
(Emphasis supplied) In the light of the elucidation of law by the coordinate bench, which stands affirmed by the division bench, this Court need not delve deep into the matter.
11. The issue standing answered by the coordinate bench and the division bench, which covers the lis on all its fours, the petition deserves to succeed with a direction to the respondents
- Authority, to consider the claim and process refund to the petitioner, with applicable interest.
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12. For the aforesaid reasons, the following:
ORDER a. The writ petition is allowed.
b. The respondents - Revenue are directed to consider refund of the amount, with applicable interest, within three months from the date of receipt of a copy of the order.
Ordered accordingly.
Sd/-
(M.NAGAPRASANNA) JUDGE NVJ List No.: 1 Sl No.: 13