TDS Default: Delhi HC stays Orders against HUAWEI Telecommunications [Read Order]

While considering a writ petition filed by M/s HUAWEI Telecommunications (India) Company Pvt. Ltd, a division bench of the Delhi High Court has stayed the orders issued by the income tax department.  

The petitioner, M/s HUAWEI Telecommunications challenged an order passed under Section 132 (9B) of the Income Tax Act, 1961 and the provisional attachment of bank accounts as well as trade receivables affected by the impugned orders dated 17^th February, 2022 and 19^th February, 2022.

Senior Advocate Mr. Arvind Datar, while appearing for the assessee, requested the Court for release of the petitioners’ bank accounts and trade debtors attached provisionally vide impugned orders and for release of funds to enable the Petitioner in meeting its fund requirements for day-to-day operational expenses and continuity of business operations. He further contended that over Rs.1500 crores of funds of the Petitioner have been attached resulting in severely constricting the business and operations of the Petitioner in a completely disproportionate manner. Mr.Datar further stated that due to the impugned orders, the Petitioner has defaulted in making payment of statutory dues like GST and TDS. He also states that the Petitioner has not been able to pay salary to its 400 (approx.) permanent employees and 190 contractual employees as well as clear dues of its vendors/ suppliers.

Mr. Justice Manmohan and Mr. Justice Dinesh Kumar Sharma has observed that the present matter requires a detailed examination.

“Consequently, to balance the equity, the impugned orders are stayed subject to the following conditions:- (i) The Petitioner shall prepare a Fixed Deposit Receipt of Rs.100 crores in DBS Bank Account No.820200251860, which shall be renewed automatically from time to time. A photocopy of the said FDR shall be filed with the Assessing Officer within a week. The Banker is also directed to ensure that the Petitioner and/or any of its officials/nominees/authorised representatives do not deal with the FDR in any manner. (ii) The Respondents are directed not to release any refund [which is stated to be to the tune of Rs.30 crores (approx.)] to the Petitioner till further orders. (iii) The Petitioner shall not repatriate any money abroad till the next date of hearing without leave of this Court. (iv) It is clarified that the Petitioner is entitled to receive inward foreign remittances [which is stated to be to the tune of Rs.556 crores (approx.)] from its Inter-Company Overseas Customers. (v) The Petitioner shall also file its monthly statement of ‘Payments Received as well as Made’,” the Court observed.

While concluding, the Court listed the matter on 06th July, 2022 and clarified that the aforesaid arrangement is provisional and is subject to further orders to be passed by this Court.

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