TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 246
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....y way of additional ground, the assessee has raised a legal issue assailing the validity of the assessment order being barred by limitation. Narrating chronology of events, the ld. Authorized Representative of the assessee submitted that Transfer Pricing Officer (TPO) passed the order under section 92CA(3) of the Act on 09/01/2013. The Assessing Officer passed draft assessment order on 27/03/2013. Thereafter, the Assessing Officer was required to pass final assessment order within the limitation period provided under section 153 (1) i.e. by 31/03/2013, whereas, final assessment order was passed on 13/05/2013 i.e after the expiry of limitation period. The ld. Authorized Representative of the assessee submitted that the time limit for passing assessment order in the impugned assessment year does not get extended by application of Section 144C of the Act mandating reference to dispute resolution panel as the provisions of said section do not apply to the impugned assessment year. To support his contentions, the ld. Authorised Representative placed reliance on the recent decision of Hon'ble Madras High Court in the case of M/s. Vedanta Limited vs. ACIT in Writ Petition No.1729 of 2011 ....
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....n it has been held that section 144C inserted by Finance Act, 2009 is applicable for assessment year A.Y 2010-11 & onwards only and not applicable for assessment A.Y 2009-10 or any earlier year. (copy enclosed at page no 11 to 29). * As per our knowledge and on public domain, there is no decision of Bombay High Court considering this aspect of the matter. * In the present case, the Ld. AO has passed final order on 13.05.2013 which is time barred in the light of Section 153(1), accordingly, bad in law." 3. On the other hand Sh. A. Mohan representing the Department vehemently opposed the additional ground raised by the assessee. The ld. Departmental Representative placed reliance on CBDT Circular No.5 of 2010 dated 03/06/2010 to counter the argument made on behalf of the assessee/appellant. 4. Both sides heard and orders of authorities below perused. The assessee in appeal has raised 10 grounds assailing the addition/disallowances on merit. The assessee has also filed additional ground of appeal challenging the validity of assessment order. The additional ground raised by the assessee is purely legal in nature, which goes to the root of ascertaining validity of the assessment o....
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.... case is covered by this third proviso. 6. The provisions of section 144C of the Act vide which the assessee was given an option to take the benefit of specialised Dispute Resolution Panel as an alternate mechanism for expeditious disposal of dispute was inserted by the Finance (No.2) Act, 2009 w.r.e.f. 01/4/2009. The Hon'ble Madras High Court in the case of M/s. Vedanta Ltd. vs. ACIT (supra) has considered the issue of applicability of newly inserted provisions of Section 144C and has held that the amendment being substantive in nature would apply prospectively from assessment year 2011-12 onwards. For the sake of completeness the relevant extract of the judgment is reproduced as under:- "19. Coming to the aspect of assumption of jurisdiction under Section 144C, the provisions of Section 144C inserted by Finance (No.2) Act, 2009 set out a new and distinct scheme of assessment separate from regular assessment. The object of insertion of Section 144C has been explained in the Explanatory notes to Finance (No.2) Act, 2009 as follows: '45. Provision for constitution of alternate dispute resolution mechanism 45.1 The dispute resolution mechanism presently in place is time ....
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....order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee.' 23. Sub-section (2) states that on receipt of the draft order, the assessee shall, within 30 days either file acceptance of the variations or objections to the same before DRP. Sub-section (3) states that the Assessing Officer shall complete the assessment on the basis of the draft order, if the assessee intimates acceptance of the variations to him or if no objections are received within 30 days. Sub-section (4) states that, in any event, the Assessing Officer shall complete the assessment by way of final order of assessment to be passed within one month from the end of the month in which either acceptance from the assessee is received, or the period of filing of objections expires. Sub-section (5) onwards deal with the hearing of the objections before the DRP and sub-section (10), states that every direction issued by the DRP shall be binding on the Assessing Officer. Sub-section (13) thereafter states that ....
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....was referred prior to April 1, 1971, had jurisdiction to impose penalty. 6. The High Court answered the question in favour of the assessee whereupon the matter was brought to this Court. This Court at the outset stated the general principle applicable in this behalf in the following words: It may be stated at the outset the general principle is that a law which brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown. One of the modes by which such an intention is shown is by making a provision for change over of proceedings from the court or the Tribunal where they are pending to the court or the Tribunal which, under the new law, gets jurisdiction to try them. 7. The Court then observed that once a reference was validly made to the Inspecting Assistant Commissioner he did not lose the jurisdiction to deal with the matter on account of the aforesaid Amendment Act. It pointed out that the Amending Act does not does not contain any provision that the references validly pending before the Inspecting Assistant Commissioner should be returned without passing any final order if the amount of income in respect of which ....
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.....2010-11 onwards. The relevant portion of the 2013 Circular reads thus: 'Para 45.5 of the Circular No.5/2010 dated 03.06.2010 reads as under: "45.5 Applicability: These amendments have been made applicable with effect from 1st October, 2009 and will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years. The Dispute Resolution Panel Rules have been notified by S.O. No. 2958 (E) dated 20th November, 2009." In the above extracted Para 45.5 there has been an inadvertent error in stating the applicability of the provisions of section 144C inserted vide Finance (No.2) Act, 2009 that amendments will apply in relation to the assessment year 2010- 11 and subsequent assessment years. Accordingly, para 45.5 is replaced with the following: "45.5. Applicability: Section 144C has been inserted with effect from 1st April, 2009. Accordingly, the Assessing Officer is required to forward a draft assessment order to the eligible assessee, if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. In other words section 144C is applicable to any order ....