Huawei gets some relief from court in Tax Case

According to the latest information, a recent judgement by a sessions court has overturned the directives given by a magistrate to the Indian division of Huawei, a Chinese smartphone manufacturer, as well as its Chief Executive Officer Li Xiongwei and three other senior executives.

This development follows the Income Tax Department’s move to initiate legal proceedings against the company and its executives, accusing them of intentionally withholding information. The magistrate had previously issued these summons in June, Economic Times reported.

In a decisively worded judgement, the sessions court underscored that while an elaborate order isn’t necessary at the summoning stage, it is essential for the magistrate’s order to demonstrate thoughtful deliberation. The sessions court found that the magistrate’s decision seemed unduly influenced by the narrative of the Income Tax Department. It further noted that the basis for the summoning – the accused providing “vague or incongruous answers” – was not specifically addressed in the magistrate’s order. The sessions court reminded that it is well-established in law that a court must independently evaluate facts and not merely echo the prosecution’s stance, the report said.

Representing Huawei and its executives, advocate Vijay Aggarwal argued that the trial court in Delhi lacked the jurisdiction to adjudicate alleged offenses committed in Gurgaon, Haryana. He contended that the prerequisites of Section 275B of the Income Tax Act, which requires the provision of “necessary facility” for inspecting account books and related documents, were not met to warrant prosecution. Aggarwal maintained that the company’s executives had cooperated fully during the Income Tax Department’s search operation.

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