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TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 1186
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....eal for adjudication on merits. In addition to the grounds raised in the memorandum of appeal, the assessee has raised the following additional grounds: Ground No. 3 "Without prejudice to ground no. 1 & 2, on the facts and circumstances of the case, and in law, the learned assessing officer erred in passing a draft assessment order u/s 144C without appreciating that there was no variation in the income returned by the appellant company. Without prejudice to ground no. 1 & 2, on the facts and circumstances of the case, and in law, the Q impugned order passed by the learned Assessing Officer is barred by limitation and void ab initio and therefore, is liable to be quashed." 5.1 As we find, the additional grounds are peri materia with ground no. 2 of main grounds. 6. Learned Departmental Representative objected to admission of additional grounds at this stage. Be that as it may, on perusal of the additional grounds, we are of the view that the issues raised in the additional grounds are purely legal and jurisdictional issues going to the root of the matter and will have a crucial bearing on the appeal. Further, the additional grounds do not require fre....
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....ceeding further, he submitted, the only provision under which the Assessing Officer could have framed the assessment is under section 143(3) of the Act. However, he submitted by the time the Assessing Officer passed the impugned assessment order, period of limitation provided under section 153 of the Act has expired. Therefore, the impugned assessment order is barred by limitation. He submitted, the issues are otherwise squarely covered by the decision of the Tribunal in assessee's own case in Assessment Year 2007-08 & 2010- 11 to 2015-16. He placed on record a copy of the order dated 20.09.2022 passed in ITA No. 3115/Del/2009 and others. 10. The learned Departmental Representative, though, agreed that the issues are covered by the decision of the Tribunal, however, he still insisted that the additional ground should not be admitted. 11. We have considered rival submissions and perused materials on record. 12. The issues arising for consideration is whether the Assessing Officer could have proceeded under section 144C(1) read with section 144C(3) of the Act in a case where there is no variation in the income returned which is prejudicial to the assessee. In the facts of th....
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....he interest of such assessee, the Assessing Officer is mandatorily required to pass proposed order of assessment, which is termed as 'Draft Assessment order'. 20. Provisions of section 144C as they stood at the relevant point of time of the captioned Assessment Years read as under: "The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed 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. (15) For the purposes of this section - (a) "Dispute Resolution Panel" means a collegium comprising of three Commissioners of Income-tax constituted by the Board- for this purpose; (b) "eligible assessee" means- (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) any foreign company." ....
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....s DTAA, the Assessing Officer has declined the said treaty protection on the ground that the assessee was not beneficial owner of the said interest, and, accordingly, brought the income is to tax0 40% thereof. There is, quite clearly, no variation in the quantum of income. The question whether it was a case in which the Assessing Officer could have issued the draft assessment order, on the facts of this case, needs to be examined in the light of provisions of Section 144C(1) which provides that, "The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forwards a draft of the proposed 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 [Emphasis, by underlining, supplied by us]. The assessee before us is a non-resident company incorporated, and fiscally domiciled, in Cyprus. Accordingly, in terms of Section 144C(15)(b)(ii). the assessee is an eligible assessee but then there is no change in the figure of income....
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..... Provision of section 144C( 1) read as under:- "144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed 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 [84a Words " in the income or loss returned" omitted by the Finance Act, 2020, w.e.f. 1-4-2020] which is prejudicial to the interest of such assessee." 9. A perusal of the aforesaid provisions shows that the Assessing Officer shall forward the draft of the proposed order if he proposes to make any variation in the income or loss returned. The afore stated proposal in the draft assessment order clearly show that the Assessing Officer did not intend to make any variation in the income of the assessee, therefore, the assessment order should have been framed as per the provisions of section 153 r.w.s. 143(3) of the Act meaning thereby that the assessment order dated 7- 9-2018 is barred by limitation. 10. In the light of the facts mentioned elsewhere when considered within the....
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.... Roca Bathroom Products Pvt. Ltd in Writ Appeal Nos. 1517, 1519, 1609, 1610 and 1854 of 2021 and CMP Nos. 9656, 9658, 10022, 10023 and 11720 of 2021 had the occasion to address an identical issue. It would be pertinent to refer to the relevant part of the judgment, which is directly on the challenge before us, which is as under: "After an international transaction is noticed subject to satisfaction of section 92B. a reference is made to the TPO under sub-Section (1) of Section 92CA of the Act. Though the provision does not state as to when a reference is to be made, a reading of section 153 would explicit that the reference is to be made during the course of the assessment proceedings before the expiry of the period to pass an assessment order. The TPO after considering the documents submitted by the assessee is to pass an order under Section 92CA(3) of the Act. As per Section 92CA (3A). the order has to be passed before the expiry of 60 days prior to the date on which the period of limitation under Section 153 expires. As per Section 153 no order of assessment can be passed at any time after the expiry of 21 months. As per 92CA (4), the assessing officer has to pass an or....
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....ection 153(4) after amendment. In Section 153(2A). a time limit is prescribed to the Assessing officer to complete the fresh assessment within one year prior to amendment and after amendment, as per section 153 (3), the time limit has been reduced to 9 months. As per the proviso to section 153 (3) if the order is received after 1st April 2019, the time limit is one year. From the above provisions, it is very clear that various time limits have been prescribed to various mechanisms which form part of assessment proceedings, either original or on remand to expedite and bring a finality to the assessment proceedings, which can be taken to a logical end. Discussion and Findings. 18. The main contentions of the Department, through their counsel are that Section 144C is a code in itself and hence on remand by the ITAT, the power of DRP to take up the dispute on additions by TPO, is not circumscribed by Section 153 and that in the absence of any express time limits contemplated under the Act, the time limits under Section 153 for reassessment cannot be read into Section 144C more particularly when the provisions of Section 153 are excluded by the non-obstante clause in s....
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.... assessee to file their objection before the DRP and the DRP is given 9 months time and thereafter, within one month from the end of the month of receipt of directions from DRP, the final order is to be passed. This court is not in consonance with the contention of the learned senior panel counsel for the appellants/ revenue that the time period of 33 months, provided initially is for the draft order and not for the final order. A careful perusal of the timeline would indicate that the time limit is for the final assessment and not for the draft order. The anomaly in the argument is that in the present cases, no fresh draft order was passed, but the DRP had issued the notices. If the contention of the appellants / revenue was to hold some water, they must have passed the draft assessment order immediately on receipt of the order from the Tribunal, but instead, notice was issued by the DRP. In any case, it is a far cry for the revenue as because no order has been passed for more than 5 years. 21. As held above, the assessment has to be concluded within 21 months when there is no reference and when there is a reference, it has to be concluded within 33 months. In the additio....
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....nce to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter."............. 14. This rule of construction which is also spoken of as "ex visceribus actus" helps in avoiding any inconsistency either within a section or between two different sections or provisions of the same statute. 15. On a conspectus of the case-law indicated above, the following principles are clearly discernible: (1) It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. (2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them. (3) It has to be borne in mind by all the courts all the time that when there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. T....
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....unfair, unreasonable or does not make any sense. [Bennion on Statutory Interpretation, 5th Edn., p. 986.] When an interpretation is beset with practical difficulties, the courts have not shied from turning sides to accept an interpretation that offers a pragmatic solution that will serve the needs of society [Id, p. 971, quoting Griffiths, L.J.]. Therefore, when there is choice between two interpretations, we would avoid a "construction" which would reduce the legislation to futility, and should rather accept the "construction" based on the view that draftsmen would legislate only for the purpose of bringing about an effective result. We must strive as far as possible to give meaningful life to enactment or rule and avoid cadaveric consequences [See Principles of Statutory Interpretation by Justice 6.P. Singh, 14th Edn., p. 50.]" 23. Further, similar non-obstante clause is also used in section 144C(4) with a same limited purpose to imply, even though there might be a larger time limit under Section 153. once the order of TPO is accepted or not objected to, causing a deeming fiction of acceptance, the final order is to be passed immediately. The object is to conclude the pr....