The Delhi High Court has provided relief to Samsung India by overturning the Income Tax Appellate Tribunal’s ( ITAT ) earlier dismissal of the company’s application to stay a ₹1,213 crore Income Tax demand for the assessment year 2021-22. Samsung India, a division of the South Korean conglomerate Samsung Electronics Co Ltd, challenged the tribunal’s rejection in court.
A bench comprising Justices Vibhu Bakhru and Swarna Kanta Sharma reinstated Samsung’s stay application and instructed the ITAT to reconsider the matter based on its merits and resolve it promptly.
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The ITAT had initially rejected Samsung’s plea on November 22, stating that it was “premature.” The tribunal reasoned that Samsung had failed to demonstrate any immediate or active recovery actions initiated by the tax department at the time of the filing or hearing. In the absence of an imminent threat of enforcement, the ITAT dismissed the plea, leading Samsung to approach the High Court. The High Court ruled in Samsung’s favor, overturning the tribunal’s decision and restoring the company’s request for a stay.
The tax dispute is part of a series of challenges faced by Samsung India. In 2023, the Directorate of Revenue Intelligence (DRI) issued a show-cause notice to the company for allegedly evading customs duties worth ₹1,728 crore. The DRI accused Samsung of misclassifying remote radio heads to claim unwarranted exemptions. Meanwhile, the company is also dealing with operational disruptions at its Chennai manufacturing unit, where a worker strike has hindered the production of consumer electronics like televisions and washing machines.
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Adding to its challenges, Samsung has witnessed a decline in its smartphone market share in India, falling to third place behind Chinese competitors Vivo and Xiaomi. Industry estimates place its market share for the April-June quarter at 17-18%, compared to Vivo and Xiaomi of approximately 19% each.
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