TaxTMI 
TaxTMI 
2017 (9) TMI 1026
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....disallowing deduction u/s 80IB of the Act as the assessee company was not covered the definition of small scale industry." 3. The assessee has raised the following ground of in CO No. 88/Del/2016:- "1. The ld Commissioner of Income Tax (Appeals) erred in holding that ground No.1 to 1.2 in regard to illegality of the assumption of jurisdiction u/s 147 was not pressed before commissioner of Income Tax (Appeals). Without prejudice the ld Assessing Officer has assumed jurisdiction u/s 147 incorrectly and consequently the order u/s 143(3)/ 147 is illegal and has to be quashed." 4. Briefly the facts of the case shows that assessee is a company which is engaged in the business of manufacturing and trading of electronic and electrical equipments. It filed its return of income on 31/10/2005 showing the total income at Rs. 1 0388 2080/- which was assessed under section 143 (3) of the income tax act dated 23/12/2008 at Rs. 1 0394 6700/- wherein claim of the assessee under section 80 IB of the income tax was allowed of Rs. 4 2101744/-against claim of the assessee of Rs. 4 216 6368/-. Subsequently the case of the assessee was reopened when it was noted that the industrial undertaking has ....
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....ary ground of appeal of the revenue is dismissed. 7. The cross objection of the assessee is with respect to the assumption of jurisdiction under section 147 of the income tax act. Before us no arguments were advance by the Ld. authorised representative. With respect to the same and we have also perused the order of the Ld. CIT(A), wherein this particular argument with respect to the jurisdiction was also not challenged. In view of this we are not inclined to accept the claim of the assessee against the jurisdiction assumed by the assessing officer. In view of this we dismiss the cross objection of the assessee. 8. In the result appeal of the revenue as well as the cross objection of the assessee are dismissed for assessment year 2005-06. ITA No. 1319/Del/2014 Assessment Year 2009-10 9. For assessment year 2009-10, assessee has filed appeal against the order of the Ld. Deputy Commissioner Of Income Tax, Circle - 11(1), New Delhi (hereinafter referred to as the Ld. AO) passed under section 144C on 16/12/2013 pursuant to the direction of the Ld. dispute resolution panel under section 144C dated 27/11/2013 passed on the draft assessment order dated 15/02/2013 wherein the order of ....
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....f the assessee at Rs. 450578486/-. Aggrieved by the final assessment order, the assessee has preferred appeal before us. 11. The Ld. authorised representative submitted that AO could not have proceeded to passed the final assessment order under section 143(3) on 16/12/2013 in view of the direction of the DRP holding that assessee, not to be an eligible assessee. He therefore submitted that limitation prescribed under section 144C(13) does not apply to the assessee and hence the order passed by the Ld. assessing officer is beyond limitation period. He further submitted that the draft assessment order dated 15/02/2013 is also invalid. As the assessee is not an eligible assessee. According to the provisions of section 144C of the Income Tax Act. He further submitted that limitation period as prescribed under section 153 of the income tax act has ended on 31st. December 2012, whereas the final assessment passed on 16/12/2013 and hence, barred by limitation. He therefore referred to the decision of Hon'ble Delhi High Court in 382 ITR 88 and 68 Taxmann.com 377. 12. The Ld. departmental representative submitted that the order passed by the Ld. assessing officer is not barred by limitati....
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....are India Private Limited (now known as Star Sports India Private Limited) for distribution of the channels. 4. Both ESPN Star Sports as well as ESS Distribution filed their respective returns of income for the assessment year ("AY") 2010-11 on October 1, 2010, with the status of a firm. The stand taken by both the petitioners is that the revenue generated from distribution being business profit was not taxable in India in view of the article 7(1) of the India-Mauritius Double Taxation Avoidance Agreement (hereinafter referred to as the "Treaty") since there was no permanent establishment (PE) of either the petitioner in India in terms of article 5 of the said Treaty. It is stated that in the notes to the return of income filed by the petitioners, it was clearly mentioned that each of them was a partnership firm incorporated on March 29, 2002, under the laws of Mauritius. 5. Both the returns were picked up for scrutiny by the Assessing Officer. Since both the petitioners had entered into international transactions during the assessment year 2010-11, their cases were referred to the Transfer Pricing Officer ("TPO") for determination of the arm's length price ("ALP") of all....
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.... it is expected that in terms of section 144C(5), the Dispute Resolution Panel shall issue directions "as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment." The Dispute Resolution Panel, under section 144C(8) of the Act, has the power to confirm, reduce or enhance the variation proposed in the draft assessment order. Section 144C(10) of the Act provides that "every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer". 12. Further section 144C(13) of the Act provides that the Assessing Officer shall, upon receipt of the directions issued under section 144C(5), complete the assessment in conformity with the said directions issued under section 144C (5) notwithstanding anything to the contrary in section 153 or section 153B, without providing any further opportunity of being heard to the assessee. It is further stipulated under section 144C(13) that the Assessing Officer shall complete the assessment within one month from the end of the month in which such direction issued by the Dispute Resolution Panel is received. 13. In the above context, the petitioners urged before the Assessing Officer....
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.... sent to the Assessing Officer, i.e., ADIT to represent his case. 17. Pursuant to the above notices, the petitioners filed their respective written submissions. In each of the case, the Dispute Resolution Panel passed a separate order dated December 26, 2014, accepting the plea of the petitioners that neither of them was "eligible assessee" in terms of section 144C(15)(b) of the Act. Para. 4.2 of both the orders of the Dispute Resolution Panel reads as under:- "4.2 In view of the above, we are of the considered opinion that the assessee is not an 'eligible assessee' in accordance with section 144C(15)(b) as neither the Transfer Pricing Officer proposed any vari ation in the returned income nor the assessee is a foreign company. Thus, we do not have the jurisdiction over the case. Consequently, we decline to issue any direction in this case. The proceedings here are, therefore, dismissed in limine in view of the above." 18. A copy of each of the orders was marked to the Commissioner of Income-tax-I, International Tax, New Delhi, as well as the Additional Commissioner of Income-tax, Range-I, International Transactions, New Delhi and the assessee. The above orders wer....
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....nt order passed by the Assessing Officer, i.e., the Assistant Commissioner of Income-tax. 22. At the first hearing of the writ petitions, i.e., on March 11, 2015 this court, while directing notice to issue in these writ petitions, stayed the operation of the final assessment order dated January 28, 2015 issued by the Assessing Officer. 23. At the subsequent hearing on July 15, 2015, this court also stayed the penalty proceedings initiated by virtue of the notice dated July 7, 2015. 24. In response to the notice, the respondent has filed its counter affidavit. 25. Mr. Porus Kaka, learned senior counsel appearing for the petitioners, contended that the final assessment order passed by the Assessing Officer in each case on January 28, 2015, was in violation of section 144C(10) of the Act inasmuch as it was contrary to the determination by the Dispute Resolution Panel by its order dated December 26, 2014 accepting the plea of the petitioners that neither of them was an "eligible assessee" within the meaning of section 144C(15) of the Act. Mr. Kaka submitted that under section 144C(13) of the Act, the Assessing Officer was bound to issue an order in conformity with the order....
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....CIT (supra) giving liberty to the Revenue to take recourse of such remedy, as may be available to it, in accordance with law. 29. The above submissions have been considered. In the first place the court would like to observe that this is an instance of blatant disregard by the Assessing Officer of the order of the Dispute Resolution Panel notwithstanding that the Dispute Resolution Panel had categorically held that the two petitioners do not satisfy the conditions of an "eligible assessee" in terms of section 144(15)(b)(ii) of the Act. As already noticed under section 144C(10) of the Act the Assessing Officer had no option but to comply with the order of the Dispute Resolution Panel. Even if no direction was issued by the Dispute Resolution Panel under section 144C(5) of the Act, the fact that the Dispute Resolution Panel held that both the petitioners were not "eligible assessees" could not have been ignored by the Assessing Officer. 30. It appears to the court that it is plain that under section 144C, the Assessing Officer should have proceeded to pass an order under section 143(3) of the Act. Instead the Assessing Officer confirmed the draft assessment order passed under s....
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.... order under section 143(3) of the Act. 34. In Vijay Television P. Ltd. v. Dispute Resolution Panel [2014] 369 ITR 113 (Mad) where again the Assessing Officer passed the final assessment order under section 143(3) of the Act instead of passing a draft assessment order under section 144C(1) of the Act and then sought to issue a corrigendum modifying the final order of the assessment to be read as a draft assessment order but beyond the period prescribed for limitation for passing such order. The High Court held the entire exercise to be without jurisdiction. 35. In Pankaj Extrusion Ltd. v. Asst. CIT [2011] 241 CTR (Guj) 390 the Division Bench of the Gujarat High Court, in interpreting section 144C of the Act held that where an assessee was not an "eligible assessee", the question of passing the draft assessment order under section 144C of the Act did not arise. 36. As far as the decision of this court in Honda Cars India Limited v. Deputy CIT (supra) is concerned, the question that arose is whether the Assessing Officer could have passed the draft assessment order when the assessee did not satisfy the condition "eligible assessee" under section 144C(15)(b) of the Act. Answe....
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....harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellant hierarchy. It cannot be too vehe mently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, the Revenue Officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial dis cipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the Department-in itself an objectionable phrase-and is the sub ject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result would only be undue harass ment to the assessees and chaos in administration of tax laws.....
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....ment order under section 143(3) of the Act. The court notes that the Revenue has not been able to contest the submission of the petitioners that in the present case the Revenue has issued a notice to the petitioner under section 147 of the Act seeking to reopen the assessment for the assessment year 2010-11. The question of the court issuing any clarification as sought by the Revenue therefore does not arise. In any event in the present case, the Assessing Officer did pass the final assessment order in continuation of draft assessment order under section 144C(1) of the Act and the said final assessment order has been held by this court, for the reasons recorded hereinabove, to be invalid. 44. The other plea of the Revenue that the petitioners ought to have challenged the final assessment order before the Commissioner of Income-tax (Appeals) is untenable for the reason that it was contrary to the order of the Dispute Resolution Panel which held in favour of the petitioners. The order of the Dispute Resolution Panel was not challenged by the Revenue. In the circumstances, the final assessment order was without jurisdiction and this constitutes sufficient ground for the court to ex....