AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (7) TMI 511
X X X X Extracts X X X X
X X X X Extracts X X X X
....eturn of income was processed under section 143(1) of the Income-tax Act(hereinafter referred to as 'the Act') on 10-9-2007. Subsequently the case was selected for scrutiny as per the guidelines issued by the Board and notice was issued under section 143(2) dated 5-10-2007 was served upon the assessee. In response to the notice the assessee's authorised representative appeared before the Assessing Officer and produced the books of account and furnished the details called for. During the relevant financial year it was observed that the assessee did international transaction exceeding Rs. 15 crores. Therefore, with the prior approval of the Commissioner of Income-tax, Bangalore, a reference was made to the Transfer Pricing Officer, Bangalore, to determine Arms' Length Price as per the provisions of section 92CA of the Act and the same was determined on 27-10-2009 by the Joint Director, Transfer Pricing-II, Bangalore and received in the office of the Assessing Officer. The order passed by the Additional TPO had decided that adjustment of Arms Length Price to the extent of Rs. 104,96,20,245 is required to be made under section 92CA of the Income-tax Act, 1961 and the same was brought t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omparables selected by GEITC for the purpose of determining ALP were acceptable. It has also been submitted that deduction under section 10A had been allowed since assessment year 2002-03 and could not be questioned in the present proceedings. (ii) We have considered the submissions made by the assessee. As per section l44C sub-section (5), the DRP in a case where objection is received, the DRP shall issue such directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment. From this it is clear that the DRP is having powers to issues such directions "as it thinks fit". The sub-section (6) which immediately follows such sub-section (5) states that the direction refer to in sub-section (5) shall be issued after considering. (a) Draft order; (b) Objections filed by the assessee; (c) Evidence furnished by the assessee; (d) Report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e) Records relating to the draft order; (f) Evidence collected by, or caused to be collected by, it and (g)&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as it relates to direction Nos. (iv) & (v) as referred to above in the order of DRP is not violative of section 144C(5) or (8) of the Act. However, the learned Single Judge ordered that the petitioner can approach the Assessing Officer within one month from the date of receipt of copy of the order who in turn shall take further action in accordance with law within two months thereafter. Being aggrieved by the order of the learned Single Judge dated 8-9-2011 this appeal is filed by the petitioner in the Writ Petition. 4. We have heard Sri Aravind Datar, the learned Senior counsel appearing for the appellant and Sri M.V. Sheshachala, learned counsel appearing for the respondents and reply arguments. 5. The learned Senior counsel appearing for the appellant submitted that the provisions of section 144C(5), (8) & (15) have to be read together and the power of DRP is described in sub-section (8) of section 144C and sub-section (5) cannot enlarge the said powers and in view of section 144C(1) and (5) the eligible assessee in respect of whom the proposed draft order passed has been defined in sub-section 15(b) which reads as follows:- "(b) "eligible assessee" means- (i) a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....above, as in respect of other findings of the DRP regarding the Arm's Length Price the same is binding on the Assessing Officer and the order passed by the Assessing Officer is appealable. 7. The learned counsel appearing for the respondents submitted that the order passed by the DRP issuing directions (iv) & (v) is justified and cannot be said to be wholly without jurisdiction. The learned counsel submitted that it was to confer rights or enhance the variation including all the powers of the appellate authority as under section 144C(5) the DRP is entitled to pass any order as it deems fit. In support of his contention he has relied upon the decision of the Bombay High Court in Narrondas Manordass v. CIT [1957] 31 ITR 909. 8. The learned counsel appearing for the respondents submitted that direction Nos. (iv) & (v) issued impugned in the Writ Petition and in this appeal falls within the jurisdiction of the DRP under section 144C(8) and wherefore the order is justified and the learned Single Judge has rightly held that there is no violation of the provisions of section 144C while issuing directions (iv) & (v). 9. In reply the learned Senior counsel appearing for the appellant sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in the light of the provisions of sections 92C and 144C. It is well settled that in view of the decision of the Hon'ble Supreme Court in Ge India Technology Centre (P.) Ltd. v. CIT [2010] 327 ITR 456/193 Taxman 234 that while construing the jurisdiction the consequences in the Income-tax Act, every word has to be given meaning. In the said case the Hon'ble Supreme Court was considering the provisions of section 195 and held that the decision of this Court holding that in respect of every explanation the income has to be deducted unless a certificate has been obtained under section 145 of the Act would render the word chargeable under section 195(1) assessable to tax will stand obliterated and observed as follows:- "16... While interpreting a section one has to give weightage to every word used in that section. While interpreting the provisions of the Income-tax Act one cannot read the charging sections of that Act de hors the machinery sections. The Act is to be read as an integrated code. 17. Section 195 appears in Chapter XVII which deals with collection and recovery. As held in CIT v. Eli Lilly & Co. (India) (P.) Ltd. the provisions for deduction of TAS which is in Chapter X....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) "eligible assessee" means - (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) any foreign company." It is clear on a reading of the above said sub-sections of 144C that the provisions of section 144C(4), cannot be read de hors the power of the DRP under sub-section (8) and while considering the power of DRP it is also clear that while considering section 144C(1) regarding the draft proposal order or draft order is only applicable to eligible assessee as defined under sub-section (15) that is in respect of the variations referred to above sub-section arising as a consequence of the order of the Transfer Pricing Officer under sub-section (3) of section 92CA and even under section 144C(8). The DRP may confirm, reduce or enhance the variations proposed in the draft order and wherefore the word eligible assessee in sub-section (1) and (15) and the proposed draft order referred to under clause 144C(1) and (8) will have to be given full meaning. It cannot lead to the conclusion that the Dispute Resolution Pa....