HC allows AB Nuvo to move appellate tax authority on I-T notice

MUMBAI: The Bombay High Court has given the permission to Aditya Birla Nuvo to move the first appellate authority on tax matters - commissioner of income tax (appeal) - against the tax notice served on it by the income tax (I-T) department.

The I-T department had sent a notice to AB Nuvo, which treats the company as an agent of the US telecom major AT&T. AT&T had sold a 16% stake in Idea Cellular for $150 million to AB Nuvo. At that stage, AB Nuvo was the largest shareholder from the AV Birla group in Idea Cellular.

AT&T did not pay tax on this transaction on the grounds that the deal was routed through a company based in Mauritius with which India has signed a double tax avoidance treaty. Since AT&T had not paid the capital gains tax on this transaction, by naming AB Nuvo as an agent of AT&T, the I-T department had effectively shifted the tax liability of the transaction to the latter.

AB Nuvo was served the tax notice despite its securing a no-objection certificate (NOC) from the I-T department before making the payment to AT&T.

The company had sought the permission of HC to move the first appellate authority against the I-T notice served under Section 163 of I-T Act, which treated it as an agent of AT&T. AB Nuvo was represented by SB Dastur, while the I-T department was represented by Parag Vyas.