TaxTMI 
TaxTMI 
2022 (9) TMI 1236
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....E and taxability of royalty income under Article 7 of India - UK DTAA. 4. In ITA No. 2609/DEL/2020, 654/DEL/2020 and 869/DEL/2020 pertaining to Assessment Years 2007-08, 2010-11 and 203-14 respectively, there is a delay in filing the appeals by 145 days, 21 days and 46 days respectively. 5. The contents of the application for condonation of delay have been duly considered and since the ld. DR has not raised any strong objection against the condonation of delay and finding that the assessee was prevented by reasonable and sufficient cause in not filing the appeals on or before the due date, the delay is condoned. 6. Except for appeal for Assessment Year 2005-06 in ITA No. 3115/DEL/2009, the assessee has raised additional ground which is common in all the Assessment Years and reads as under: "That on the facts and circumstances of the case and in law, the impugned order passed by the Assessing Officer is barred by limitation and void ab initio and, therefore, is liable to be quashed." 7. There is another additional ground raised in ITA Nos. 2601/DEL/2020, 654/DEL/2014, 189/DEL/2015, 4461/DEL/2016, 869/DEL/2018, 411/DEL/2018 and 2975/DEL/2019 and the same read as ....
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....we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." 14. Similar view has been taken in the case of Jute Corporation of India Ltd 187 ITR 688. 15. In light of the above ratio, we find that this Tribunal is not required to verify any new facts. Therefore, the additional grounds raised are admitted. 16. We will first address to the additional ground which reads as under: "That on the facts and circumstances of the case and in law, the Assessing Officer erred in passing a draft assessment order without appreciating that there was no variation in income returned by the appellant and, therefore the impugned order passed by the Assessing Officer is void ab initio and, therefore, is liable to be quashed." 17. The representatives of both the sides were heard at length, the case records carefully perused and relevant provisions of the Act have been duly considered. 18. Briefly stated, the facts of the case are that the Assessing Officer assumed jurisdiction over the assessee on filing of return by the assessee and accordingly, statutory noti....
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....u/s 144C of the Act when there is no variation in the income returned by the assessee. 23. Our view is supported by the decision of the co-ordinate Mumbai Bench in the case of Mousmi SA Investment LLC in ITA No. 7076/MUM/2018. Pertinent findings of the co-ordinate bench are given as under: "11. In the instant case, the assessee herein is an eligible assessee. However, there is no variation in the income or loss returned, which is prejudicial to the interests of the assessee. Hence the second condition prescribed in sec.144C(1) was not satisfied. Hence the approach of the AO in adopting the procedure prescribed in sec.144C of the Act is not in accordance with the mandate of law. We get support for our view from the decisions rendered by Chennai bench and Pune bench of Tribunal in the cases referred above. Hence the assessment order passed by the AO gets vitiated and the same is liable to be quashed. We order accordingly." 24. Similar view was taken by the Tribunal Mumbai Bench in IPF India Property Cyprus [No. 1] in ITA No. 6077/MUM/2018. Relevant observations of the co-ordinate bench in this case read as under: "5. So far as the first issue is concerned, we ....
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....h no variations in the returned income or loss were proposed, the draft assessment orders were not required to be issued. We, therefore, uphold the plea of the assessee on this point. 7. Coming to the second point, we find that there is no dispute that if no draft assessment order was to be issued in this case, the assessment would have been time barred on 31stDecember 2017 but the present assessment order is passed on 17th August 2018. Once we hold that no draft assessment order could have been issued in this case, as the provisions of Section 144C(1) could not have been invoked in this case, the time limit of completion of assessment was available only upto 31st December 2017. The mere issuance of draft assessment order, when it was legally not required to be issued, cannot end up enhancing the time limit for completing the assessment under section 143(3). We, therefore, uphold the plea of the assessee on this point as well. The impugned assessment order is indeed, in our considered view, time barred. We, accordingly, hold so. 8. As the impugned assessment order itself is held to be time barred, all other grievances raised in appeal, which deal with the merits o....
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.... Years can be understood from the following chart: Assessment Year Date of filing return of income Date of passing Draft Assessment Order Date of issuance of DRP Directions Date of filing acceptance before assessing officer Due date for passing Final Assessment Order under section 153(1) of Date of final assessment order 2004-05 30-Mar-06 31-Dec-10 01-Sep-11 - 31-Mar-l 1 15-Sep-l 1 2007-08 24-Oct-07 24-Dec-09 21-Sep-10 - 31-Dec-09 04-Oct-10 2008-09 25-Sep-08 31-Dec-10 01-Sep-11 - 31-Dec-10 15-Sep-11 2009-10 30-Sep-09 23-Dec-11 25-Jul-12 - 31-Dec-l 1 31-Aug-12 2010-1i 12-May-11 07-Mar-13 14-Aug-13 - 31-Mar-l 3 30-Oct-13 2011-12 30-Sep-11 28-Jan-14 15-Oct-14 - 31-Mar-l 4 25-Nov-14 2012-13 12-Sep-12 19-Feb-15 - 29-Apr-15 31-Mar-l 5 30-Apr-15 2013-14 04-Sep-13 28-Mar-16 - 08-Apr-16 31-Mar-l 6 08-Apr-16 2014-15 15-Sep-14 07-Dec-16 - 27-Dec-16 31-Dec-16 06-Jan-17 2015-16 26-Aug-15 03-Nov-17 - 13-Dec-17 31-Dec-17 18-Dec-17 29. The Hon'ble High Court of Ma....
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....hall in conformity with the directions complete the assessment proceedings within one month from the end of the month in which the directions are received. It goes without saying that if no objections are filed by the Assessee to the draft order, the assessing officer has to pass the final assessment order based on the draft order within one month from the end of the month in which the period for filing the objection had expired as per section 144C(4). As per the proviso to Section 92CA (3A), if the time limit for the TPO to pass an order is less than 60 days, then the remaining period shall be extended to 60 days. This implies that not only the time frame is mandatory but also the TPO has to pass an order within 60 days. Further, the extension in the proviso referred above also automatically extends the period of assessment to 60 days as per the second proviso to Section 153. That apart, but for the reference to the TPO, the time limit for completing the assessment would only be 21 months from the end of the assessment year. It is only if a reference has been made during the course of assessment and is pending, the department gets another 12 months as per second proviso to Section....
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..... Thereafter, the files have been transferred to Bengaluru by the CBDT notification dated 31.12.2014. The Learned Judge relying upon the findings in the batch of cases which was decided first and rendered additional findings, which have been extracted in paragraphs 10 and 11 above, has allowed the writ petitions holding that the time limit under Section 153 (2A) was not adhered to and in any case, the proceedings have not been concluded within a reasonable time. 20. As rightly contended by the learned senior counsels and affirmed by the Learned Judge, the DRP proceedings is a continuation of assessment proceedings. To put it further, it is a part of assessment proceedings, once the objections are filed and under section 144C (12) a period of 9 months is prescribed, within which, directions are to be issued by the DRP, failing which any directions are to be treated as otiose. As seen from the timeline discussed in the earlier paragraphs, the original assessment proceedings are to be completed within 21 months and the additional time of 12 months is granted when proceedings before TPO is pending. The TPO has to pass orders before 60 days prior to the last date. Then 30 days ....
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....eived during the Financial year 2013-14. The transfer of the files to Bengaluru, after the lapse of the time, will not indefinitely extend the time and can have no impact on the time lines. It is an inter-department arrangement and it cannot defeat the rights of the assessee. 22. Insofar as the non-obstante clause in Section 144C(13) is concerned, we concur with the view of the Learned Judge. The exclusion of applicability of Section 153 or Section 153 B is for a limited purpose to ensure that dehors larger time is available, an order based on the directions of the DRP has to be passed within 30 days from the end of the month of receipt of such directions. The section and the sub-section have to be read as a whole with connected provisions to decipher the meaning and intentions. At this juncture it would be useful to refer to the following decisions: (i) Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373 at page 381: "11. The statute has to be read as a whole to find out the real intention of the legislature. 12. In Canada Sugar Refining Co. v. R. [1898 AC 735 : 67 LJPC 126] , Lord Davy observed: "Every clause of a statute should be cons....
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....but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See R.S. Raghunath v. State of Karnataka [(1992) 1 SCC 335 : 1992 SCC (L&S) 286 : (1992) 19 ATC 507 : AIR 1992 SC 81] .) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [(1997) 1 SCC 373 : AIR 1997 SC 1006])." (iii) Franklin Templeton Trustee Services (P) Ltd. v. Amruta Garg, (2021) 6 SCC 736 : 2021 SCC OnLine SC 88 at page 752: "17. The concept of "absurdity" in the context of interpretation of statutes is construed to include any result which is unworkable, impracticable, illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief [ See Bennion on Statutory Interpretation, 5th Edn., p.969.] . Logic referred to herein is not formal or syllogistic logic, but acceptance that enacted law would not set a standard which is palpably unjust, un....
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.... (b) Even in case of remand, the TPO or the DRP have to follow the time limits as provided under the Act. The entire proceedings including the hearing and directions have to be issued by the DRP within 9 months as contemplated under Section 144C (12) of the Income Tax Act, (c) Irrespective of whether the DRP concludes the proceedings and issues directions or not, within 9 months, the Assessing officer is to pass orders within the stipulated time, (d) In matter involving transfer pricing, upon remand to DRP, the Assessing officer is to pass a denova draft order and the entire proceedings as in the original assessment, would have to be completed within 12 months, as the very purpose of extension is to ensure that orders are passed within the extended period, as otherwise the extension becomes meaningless. (e) The outer time limit of 33 months in case of reference to TPO under Section 153, would not refer to draft order, but only to final order and hence, the entire proceedings would have to be concluded within the time limits prescribed, (f) The non-obstante clause would not exclude the operation of Section 153 as a whole. It only implies that....
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....lief that Shri Anmol Dar is not an independent agent acting on behalf of the assessee in normal course of his business but is economically dependent on the assessee as out of his total income, Shri Anmol Dar received 80% directly or indirectly from the assessee and the Assessing Officer came to the conclusion that Shri Anmol Dar constituted the dependent agent PE [DAPE] of the assessee in terms of Article 5(4) of the Indo-UK DTAA. 36. Taking a leaf out of the TDS certificate filed with the return of income, the Assessing Officer found that the assessee has received total payment of Rs. 1,75,42,082/- which is 50% of the amount receivable by it as per the terms of the agreement. 37. The Assessing Officer estimated 85% of the total receipts and treated balance 15% business income of the assessee as taxable @ 40%. 38. The assessee challenged the assessment before the ld. CIT(A) but without any success. 39. Before us, the ld. counsel for the assessee, as mentioned elsewhere, moved an application u/r 29 of the ITAT Rules requesting for admission of additional evidences. 40. The ld. counsel for the assessee vehemently stated that additional evidences sought to be filed are ....