AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 1362
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....P u/s 144C(5) of the Act ('the Impugned order') inter-alia on the following grounds: On the facts and circumstances of the case and in law the learned AO/ DRP has: Reopeninq under section 147 of the Act 1. Erred in reopening the assessment under section 147 of the Income Tax Act, 1961 (`the Act'), basis a mere change of opinion in respect of transactions/dealings in respect of stream of income which has already been considered in detail by the AO and the TPO during the original assessment proceedings; 2. Erred in reopening the assessment after expiry of 4 years from end of relevant assessment year while the Assessee has disclosed all material facts truly and fully during the assessment proceedings and no new material has come on record; 3. Erred in reopening the assessment in contradiction to third proviso to section 147 of the Act, in respect of stream of income, whose arm's length price is already being disputed by the Assessee before the Hon'ble Income Tax Appellate Tribunal in the original assessment proceedings; Validity of draft assessment order 4. Erred in issuing the notice of demand under section 156 of the Act and notice initiating....
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.... of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law." 2. The assessee has also raised additional grounds dated 16.03.2021 as follows: "While reopening the assessment for AY 2011-12 beyond period of 4 years, the Assessing Officer is required to obtain the approval from the CIT, with respect to whether the case is fit for reopening and the CIT, is required to provide an approval for the same, by recording appropriate satisfaction. The Appellant wishes to file the additional ground of appeal to challenge the validity of reopening of assessment based on the Mechanical/ Casual approval provided by the CIT/ JCIT without providing detailed reasons in view of the decision of Hon'ble Bombay High Court in case of German Remedies Ltd (287 ITR 485). Further, it is to be noted that draft reassessment order dated 28 December 2018, has been passed within four weeks of order disposing of the objections (dated 13 December 2018). filed by the Appellant in response to the reasons recorded for reopening the assessment under section 147 of the Act. Since, the reassessment order has been ....
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.... the procedure prescribed under law, thus subsequent final assessment order along with demand notice loses its sanctity. Being so, it deserves to be treated as null and void in the eyes of law. He relied on the following judgments:- 1. Bangalore Tribunal in case of M/s Suretex Prophylactics (India) Pvt Ltd (ITA (TP) 430/Bang/2016) dated April 01,2021 2 Madras High Court in case of Vijay Television Private Limited (407 ITR 642) dated April 23, 2018 3 Mumbai Tribunal in case of Lionbridge Technologies Pvt Ltd (ITA 1041/M/2015) dated May 29, 2015 4. Bombay High Court in case of Lionbridge Technologies Pvt Ltd (ITA 622/2016) dated December 03, 2018 5. Delhi Tribunal in the case of Olympus Medical Systems India Pvt. Ltd. (ITA No 8892/Del/2019) dated August 26, 2020 6. Pune Tribunal in the case of Kohler Power India Private Limited (ITA No, 2467/PUN/2016) dated August 26, 2019 7. Delhi Tribunal in the case of Perfetti Van Melle (India) Pvt. Ltd. (ITA No 9116/De1/2019) dated August 11, 2020 8. Pune Tribunal in the case of M/s. Sandvik Asia Pvt. Ltd. (ITA No. 607/PUN/2014 & ITA No. 465/PUN/2014) dated March 26, 2018 9. Pune Tribunal in the case of Skoda Aut....
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.... the Act. Section 143(3) and 144(C) of the Act reads as follows:-- '143(3) On the day specified in the notice, -- (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment; (ii) issued under clause (ii) of sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment: Provided that in the case of a -- (a) research association referred to in clause (21) of section 10; ....
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....at Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and the Assessing Officer: Provided also that notwithstanding anything contained in the first and the second provisos, no effect shall be given by the Assessing Officer to the provisions of clause (23C) of section 10 in the case of a trust or institution for a previous year, if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in such previous year, whether or not the approval granted to such trust or institution or notification issued in respect of such trust or institution has been withdrawn or rescinded. 144C. Reference to dispute resolution panel.-- (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 in the income or loss returned which is prejudicial to the interest of such assessee. (2) On receipt o....
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....ed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 or section 153B, the assessment without providing any further opportunity ....
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....ssued thereon calling upon the petitioner to pay the tax amount as also penalty under Section 271 of the Act. Thereafter, the petitioner was given an opportunity of hearing on 12.04.2013. Subsequently, the second respondent realised the mistake in passing a final order instead of a draft assessment order which resulted in issuing a corrigendum on 15.04.2013. In the corrigendum it was only stated that the order passed on 26.03.2013 under Section 143C of the Act has to be read and treated as a draft assessment order as per Section 143C read with Section 93CA (4) read with Section 143 (3) of the Act. In and by the order dated 15.04.2013, the second respondent granted thirty days time to enable the assessee to file their objections. On receipt of the corrigendum dated 15.04.2013, the petitioner company approached the first respondent, but the first respondent declined to issue any direction to the assessment officer on the ground that the first respondent has got jurisdiction only to entertain such an appeal if the order passed by the second respondent is a pre-assessment order. Therefore, it is evident that the first respondent declined to entertain the objections raised by the petiti....
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.... has been extended by conferring jurisdiction upon the Assessing Officer, which he otherwise lacked on the expiry of the said period. In that case, the Honourable Supreme Court also held that there is a distinction between an order which is a nullity and an order which is irregular and illegal. Where an authority making order lacks inherent jurisdiction, such an order will be null and void ab initio, as the defect of jurisdiction goes to the root of the matter and strikes at his very authority to pass any order and such a defect cannot be cured even by consent of the parties. 24. This decision squarely applies to the facts of this case. In this case, the order passed by the second respondent lacks jurisdiction especially when it is beyond the period of limitation prescribed by the statute. When there is a statutory violation in not following the procedures prescribed, such an order cannot be cured by merely issuing a corrigendum. 25. In the decision rendered by the Honourable Supreme Court of India in the case of (L. Hazari Mal Kuthiala (supra), which was relied on by the learned standing counsel for the respondents, it was held that the mistake or defect on the part of the Com....
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....der dated 10.02.2014. For more clarity, the relevant portion of the decision of the Division Bench of this Court in the case of V. Ramaiah (supra) is extracted hereunder:-- "Certainly passing an order of assessment under Section 158BC instead of Section 158BD (inspite of clear terminology used in both the sections) would not amount to a mistake, a defect or an omission, much less a curable one. When different contingencies are dealt with under different sections of the Act, allowing an illegality to be perpetrated and then taking a plea by the Revenue that such an action adopted on their part would not nullify the proceedings, cannot be appreciated since by virtue of such actions, the Revenue has attempted to nullify the scheme of things of limitations legally propounded under the Act...." 29. In yet another decision of the Division Bench of this Court in the case of Smt. R.V. Sarojini Devi (supra), which was relied on by the learned senior counsel for the petitioners, it was held äs follows:-- "Under Section 158BC of the Act empowers the assessing officer to determine the undisclosed income of the block period in the manner laid down in Section 158BB and 'the provisions....
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....titioner any opportunity to object to it and passed the impugned assessment order. As this has occurred after 01.10.2009, the cut off date prescribed in sub-section (1) of S.144C, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete assessment. Admittedly, this has not been done and the respondent has passed a final assessment order dated 22.12.2011 straight away. Therefore, the impugned order of assessment is clearly contrary to S.144C of the Act and is without jurisdiction, null and void. The contention of the Revenue that the circular No.5/2010 of the CBDT has clarified that the provisions of S.144C shall not apply for the assessment year 2008-09 and would apply only from the assessment year 2010-2011 and later years is not tenable in as much as the language of Sub-section (1) of Section 144C referring to the cut off date of 01.10.2009 indicates an intention of the legislature to make it applicable, if there is a proposal by the Assessing Officer to make a variation in the income or loss returned by the assessee which is prejudicial to the assessee, after 01.10.2009. Therefore, this partic....
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.... is a final order and it had jurisdiction to entertain objections only if it is a draft assessment order. While so, the order dated 26.03.2013 of the second respondent can only be termed as a final order and in such event it is contrary to Section 144C of the Act. As mentioned supra, in and by the order dated 26.03.2013, the second respondent determined the taxable amount and also imposed penalty payable by the petitioner. According to the learned senior counsel for the petitioners, even as on this date, the website of the department indicate the amount determined by the second respondent payable by the company inspite of issuance of the corrigendum on 15.04.2013 as a tax due amount. Thus, while issuing the corrigendum, the second respondent did not even withdraw the taxable amount determined by him or updated the status in the website. In any event, such an order dated 26.03.2013 passed by the second respondent can only be construed as a final order passed in violation of the statutory provisions of the Act. The corrigendum dated 15.04.2013 is also beyond the period prescribed for limitation. Such a defect or failure on the part of the second respondent to adhere to the statutory ....