VIBHU BAKHRU, J. - (1.) The Petitioner, Adobe Systems Incorporated (hereafter the 'Assessee'), has preferred the present petitions under Article 226 and 227 of the Constitution of India, impugning three separate notices dated 30 th March, 2011 (hereafter the impugned notices) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) for Assessment Years (AYs) 2004 -05, 2005 -06 and 2006 -07 respectively. The Assessee further impugns three separate orders dated 8th March, 2013 (hereafter impugned orders) passed by the Assessing Officer (hereafter the AO) rejecting the objections raised by the Assessee against the assumption of jurisdiction under Section 148 of the Act.
(2.) Briefly stated, the controversy in these petitions involves the question whether Adobe Systems India Private Limited (an Indian subsidiary of the Assessee and hereafter referred to as Adobe India) could be considered as its Permanent Establishment (PE). And if so, whether any part of the Assessee's income, could be attributed to such PE in respect of the activities carried out by Adobe India, income from which had been subjected to transfer pricing scrutiny/adjustment. 2.1 The Assessee disputes that it has a PE in India. It further contends that since the income of Adobe India has been assessed at Arm's Length Prices (ALP), no part of Assessee's income could be attributed to Adobe India even if it was assumed to be the Assessee's PE in India. On the other hand, it is the Revenue's case that the activities carried out by the Adobe India are the core business activities of the Assessee; Adobe India is the Assessee's PE in India; the cost plus basis on which Adobe India is remunerated by the Assessee does not capture the fair share of Assessee's income attributable to its PE; and that a part of the Assessees income, computed on profit split method, is chargeable to tax under the Act. 2.2 Whilst the Assessee claims that there is no tangible material for the AO to have any reason to believe that the Assessee's income has escaped assessment, the Revenue contends that the transfer pricing report as submitted by Adobe India provides sufficient reason to form a belief that the Assessee's income had escaped assessment. Factual Background
(3.) The Assessee is a company incorporated under the laws of Delaware in USA. The Assessee provides software solutions for network publishing which includes web, print, video, wireless and broadband applications. The Assessee has a wholly owned subsidiary in India, namely, Adobe India. It is stated by the Assessee that Adobe India provides software related Research and Development (R&D) services to the Assessee and the Assessee does not have any business operations in India. The R&D services rendered by Adobe India, are paid for by the Assessee on cost plus basis in terms of an agreement entered into between the Assessee and Adobe India. Whilst the Assessee claims that such agreement is on principal to principal basis, the Revenue disputes the same.;