TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 799
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....ssessing Officer, determining the taxable income of the appellant for the subject assessment year at Rs. 197,829,055 as against loss of Rs. 5,030,030 returned in the return of income. 3.Based on the facts and circumstances of the case and in law, the Ld. Assessing Officer/Hon'ble DRP has erred in holding that the income earned by the appellant qualifies as ('fees for technical services') as per Article 13 of India - UK tax treaty and is taxable on presumptive basis under section 44D read with section 115A of Act, thereby not accepting the 'net income' returned by the appellant in accordance with the relevant provisions of the Act and India - UK tax treaty. 4.Based on the facts and circumstances of the case and in law, the Ld. Assessing Officer/Hon'ble DRP has erred in not following the binding rulings of the Hon'ble Courts and notifications/circulars issued by the CBDT while determining the assessed income of the appellant in India. 5.Without prejudice, based on the facts and circumstances of the case and in law, the Ld. Assessing Officer/Hon'ble DRP has erred in not allowing set off of brought forward business loss and unabsorbed depreciation while computing taxable income f....
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....ground raised by the assessee is admitted for adjudication. 6.Since the additional ground goes to the root of the matter, we proceed to decide it first. 7.Facts on record show that the original assessment for the year under consideration was completed by the AO vide order dated 28.03.2006 framed u/s 143(3) of the Act. The said assessment order was assailed in appeal before the Ld. CIT(A) but without any success. The matter travelled upto the Tribunal and the Tribunal vide order dated 31.08.2009 in ITA No. 2599/Del/2008 set aside the assessment for denovo consideration by the AO. In the proceedings to give effect to the order of the Tribunal the Assessing Officer passed draft assessment order on 30.12.2010, the DRP issued Instructions on 10.08.2011 and culminating in final assessment order dated 19.08.2011, which is impugned in the present appeal. 8.The Hon'ble Madras High Court in the case of Vedanta Limited in writ petition no. 1729/2011 has categorically held that since the provisions of section 144C of the Act has been introduced by the Finance (No. 2) Act, 2009 w.e.f. 01.04.2009, the said amendment is applicable from AY 2011-12 onwards. Therefore, in the light of the decisio....
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....nt year be reckoned as the applicable law for assessment for that year, leads one to the inescapable conclusion that the provisions of section 144C can be held to be applicable only prospectively, from AY 2011-12 only." In all the AYs under challenge, on the proposition that they are barred by limitation, the Assessing Officer has framed draft assessment order when the provisions were not there in the statute. Therefore, the period of limitation, as prescribed u/s 153 of the Act were applicable and, therefore, the date of final assessment order makes the assessment barred by limitation. Considering the facts in totality, in the light of the decision of the Hon'ble Madras High Court (supra), we have no hesitation in holding that the assessments for AYs 2007- 08 to 2010-11 are barred by limitation and accordingly quashed." 10.The Ld. DR in addition to his oral arguments also filed a written submission claiming that the additional ground taken by the assessee ought to be dismissed. In his written submission, the Ld. DR has stated as under: "Single Member Judgment of Madras High Court in the case of M/s Vedanta Limited vs. ACIT Writ Petition No. 1729 of 2011 is not a good law be....
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.... vide it's order dated 30/09/2015 quashed the assessment order dated 31/03/2014 holding it to be in violation of section 144C. Against the ITAT order Revenue filed appeal before Delhi High Court. The facts of the present case are exactly the same as that of Headstrong Services India Pvt. Ltd. in ITA No. 77/2019 (Delhi HC). Assessment year here is 2003-04 where as in Headstrong case it was 2007-08 which was prior to introduction of section 144C (w.e.f. 1/4/2009). Here also the original order dated 23/3/2006 was challenged before CIT(A). CIT(A) order was challenged before ITAT, Delhi. ITAT Delhi vide it's order dated 31/08/2009 set aside the asstt. Order with a direction to pass a fresh order after considering the additional evidence filed by the assessee. Here AO passed draft assessment order as per section 144C on 30.12.2010 and DRP passed order on 10/08/2011, final order was passed by the AO on 19/8/2011. The assessee has filed this appeal against this order. Thus, the facts of the present case are exactly same as that in the case of Headstrong Services India Pvt. Ltd. Judgment of Delhi High Court in the case of PCIT vs. Headstrong Services India Pvt. Ltd. in ITA No. 77/2019....
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....ence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasoning" 15.The decision of the Hon'ble Madras High Court in the case of Vijay Television Pvt. Ltd. 369 ITR 130 relied upon by the DR has dealt with the question of validity of corrigendum issued subsequently, whether the same could cure the invalidity of the assessment? Thus, the issue decided by the Division Bench of the Hon'ble Madras High Court is different than the controversy decided in the case of Vedanta Ltd. (supra). 16.In the light of the above judicial ....
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....y following the procedure prescribed u/s 144C of the Act, in the remand proceedings, the AO could not by pass the provisions of the said section. Kind attention in this connection is invited to the observations in paras 13, 14 and 15 of the said judgment to the following effect: "13. The ITAT while remanding the matter of transfer pricing adjustment to the AO vide order dated 17th July, 2012 had not only 'restored' the matter "to the file of the AO for following proper procedure" but also to "decide the matter denovo". 14.This Court is of the view that once the ITAT directed the Assessing Officer to decide the matter de novo, it meant that a new hearing of the matter had to be conducted, as if the original hearing had not taken place. 15.Consequently, the Assessing Officer had to decide the matter in accordance with the elaborate procedure mentioned in section 144C and not dehors it." Further attention is also invited to the specific observations in paras 19 to 20 of the judgment to the following effect: "19. The expression 'in the first instance' has been used in section 144C to signify the first step to be taken by the Assessing Officer in a series of acts contemplated b....