TaxTMI 
TaxTMI 
2012 (4) TMI 148
X X X X Extracts X X X X
X X X X Extracts X X X X
....e a draft assessment order and after that again to pass a final assessment order. All these proceedings are null and void in the eyes of law. The Dispute Resolution Panel has erred in upholding the orders passed by the assessing authority as good and enforceable in law. 3. It is the case of the assessee that the Dispute Resolution Panel ought to have held that the corrigendum, purported to cure the defect in the order dated 27-12-2010, was not a permissible mechanism of curing the defect, as was held in Dr. B. Padmaja v. ITO [2007] 105 ITD 344 (Hyd). It is the case of the assessee that the final order dated 28-2-2011 passed by the assessing authority was barred by limitation, if the order dated 27-12-2010 was treated as valid. 4. We heard Shri S. Hariharan, the learned chartered accountant appearing for the assessee-company and Shri Shaji P Jacob, the learned Commissioner of Income-tax appearing for the Revenue. 5. In this case the assessing authority had passed an order under section 143(3), read with section 144C of the Act, on 27-12-2010 to give effect to the adjustments proposed by the Transfer Pricing Officer. The order was christened as final order, even though the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r was shown as final order by the assessing authority and a demand notice was also issued alongwith that order. Once the Assessing Officer issues a corrigendum, that mistake is undone and the first communication of the Assessing Officer assumed the character of a draft order. The argument that there is no provision in the Act to issue a corrigendum is not proper, as that power is always inherent with any statutory authority. In fact, a corrigendum is even appealable if it is prejudicial to an assessee. In the present case, the corrigendum issued by the assessing authority is not prejudicial. The Assessing Officer was only clarifying the situation. The assessee has also accepted the above position by appearing before the Dispute Resolution Panel to redress its grievances. Therefore, we find that this ground raised by the assessee is just a technical ground raised for the purpose of raising a ground. 8. In this context, the learned Commissioner of Income-tax appearing for the Revenue has rightly invited our attention to the judgment of the Hon'ble Supreme Court in the case of Deepak Agro Foods v. State of Rajasthan [Civil Appeal Nos. 4327 to 4329 of 2008, dated 11-7-2009]. In para....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision Bench on the conduct of the assessing officer, it was a case of an irregularity in assessment proceedings by the officer, who was not bereft of authority to assess the appellant. At best, it was an illegality, which defect was capable of and has been cured by the High Court by setting aside the orders and by granting consequential relief." 9. Therefore, we conclude that the first ground raised by the assessee regarding the validity of the orders is liable to rejected. 10. The next ground raised by the assessee-company is on the merits of the case. The case of the assessee is that the Dispute Resolution Panel has not considered the higher depreciation charged by the assessee company as against the case of comparable companies in working out its operating cost. 11. The Transfer Pricing Officer had proposed three kinds of quantitative adjustments in the transfer pricing assessment of the assessee. The first adjustment related to write-back of excess depreciation charged by the assessee in working out its operating profit. The second adjustment related to exchange fluctuation loss. The third one related to bank charges. 12. Out of the above three proposed adjustments,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee is also adjusted to the diminishing method, its operating profit would be more than 14%, very much comparable to the operating profit of other companies. 15. Neither the Transfer Pricing Officer, nor the Dispute Resolution Panel, accepted the above contention of the assessee. That is why this point is very much agitated before the Tribunal. The assessee has formulated its accounting policies on the basis of its evaluation of various factors determining the operating costs. As far as the question of depreciation is concerned, the assessee has made a technical study. It is on the basis of the technical study that the assessee has estimated the lifespan of every asset and determined the rates of depreciation so that the assets are written off during the period of its useful life itself. It is an accepted practice of providing depreciation. It is only while computing the taxable income that the assessee has to limit its claim of depreciation in accordance with Income-tax Rules. The Companies Act also provides that the assessee must provide the minimum amount of depreciation; but it can always provide for more depreciation. When a company is working out its operating profi....