TaxTMI 
TaxTMI 
2023 (8) TMI 460
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....e relevant laws of Cayman Island and headquartered in Dubai, United Arab Emirates. Petitioner is engaged in the business of shallow water drilling for clients engaged in the oil and gas industry. Petitioner has been filing its Return of Income under the Income Tax Act, 1961. The petition is concerned with Assessment Year 2014-15. 2. The parent group of Petitioner on a global basis had acquired 38 rigs from one Transocean group sometime in late 2012 for which an Asset purchase Agreement had been executed. Pursuant to the said agreement, Petitioner had acquired a rig by name J.T. Angel (the said rig) which was recorded in the books of account of Petitioner at USD 13.6 million equivalent to Rs. 74,22,94,527/- The said rig was already in operation for a contract between Oil and Natural Gas Corporation (ONGC) and Transocean Drilling Services (India) Pvt. Ltd. The said rig was on a bareboat charter basis. The arrangement continued upto July 2013 and from August 2013 to November 2013, the said rig was used under a nomination contract for providing drilling services to ONGC. From December 2013 to March 2014, the said rig required and underwent major repairs and refurbishment at the Pipa....
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....er dated 30th October 2017 under Section 143(3) read with Section 144C(13) of the Act. 5. Aggrieved by the said final assessment order, Petitioner filed an Appeal before the Income Tax Appellate Tribunal (ITAT). Petitioner made various submissions before the ITAT and after hearing the parties ITAT held that Respondent no. 1 and DRP erred in rejecting the books of account of Petitioner without considering the books and other documentary evidences. By its order dated 4th October 2019, disposing the appeal, the ITAT remanded the matter to the Assessing Officer (AO) for fresh adjudication. 6. Since the ITAT had remanded the matter back to the AO, Petitioner, by a communication dated 5th February 2020, informed AO about the order and requested for an early disposal of the same. This was followed by oral requests. On 22nd February 2021, over one year later, Petitioner was called upon by Respondent no. 1 to produce the details of contracts entered into by it and the reasons for incurring a loss during assessment year 2014-15. Petitioner provided all documents and details called for. By a notice dated 10th September 2021 issued by Respondent no. 1 under Section 142(1) of the Act, Pet....
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....ation of income in the case of non-resident assessee engaged, inter alia, in the business of providing services or facilities in connection with prospecting for or extraction or production of mineral oils (the said business). As per the said Section, 10% of the gross revenues as referred to in Sub-Section(2) thereof, is regarded as income from the said business. Sub-Section (3) thereof, enables an assessee to opt out of the said presumptive basis of taxation provided it keeps and maintains such books of account and other documents as required under Section 44AA(2) and gets the same audited and furnishes a report as required under Section 44AB of the Act. In a case where the assessee has opted out of the said provision, its income is to be computed on a net basis in accordance with Sections 30 to 43D of the Act. It is an admitted position that Petitioner qualifies for computation of its income on the basis of Section 44BB of the Act. For the year under consideration, i.e., assessment year 2014-15, it has opted out of the said provision and has fulfilled the conditions as required under Sub-Section (3) thereof. In the first round of proceedings, the then Respondent No. 1, referring t....
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....i.e., in 24 hours. A bare perusal of the impugned order shows that a substantial part of the aspects which have been found against Petitioner, were raised on 20.09.2021 and 23.09.2021. Further, there are several aspects which do not find any reference in the notices issued by Respondent No. 1. Finally, the impugned order dated 28.09.2021 has been passed rejecting Petitioner's books of accounts and effectively computing Petitioner's income based on the computation methodology provided in Section 44BB(1), despite the fact that Petitioner had opted out from the same. 11. Mr. Mistri submitted that:- (a) Limitation as provided in Section 153 is the outermost limit provided for passing the final assessment order under the Act. The draft assessment order, the DRP's order on the objections raised by the assessee and the final assessment order ought to have been passed within the said limitation, i.e., by 30th September 2021. Division Bench of the Hon'ble Madras High Court has upheld this position in the case of Commissioner of Income-tax v. Roca Bathroom Products (P) Ltd. (2022) 140 taxmann.com 304 (Madras) [Roca Bathroom (DB)]. The Division Bench had confirmed the law laid dow....
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.... being barred under Section 153(3) of the Act. It does not arise. 14. Section 144C of the Act was held to be a self-contained code by the earlier decision of the Hon'ble Madras High Court in the case of CIT vs Sanmina SCI India (P.) Ltd [2017] 85 taxmann.com 29 (Madras). The finding that Section 144C of the Act is a complete code is also there in the decision of the single judge in Roca Bathroom (SB) (Supra). Once 144C of the Act is held to be a complete code then for all things dealt by it, it would prevail over other provisions including Section 153 of the Act. Hence the decision of the Hon'ble High Court that the time limit given under Section 153 of the Act would prevail over and subsume the time limit prescribed under Section 144C of the Act is per incuriam. It is settled law that a self-contained code/ complete code takes precedence for all things dealt by it. The Hon'ble Apex Court and High Courts have reiterated this position. 15. The provision of Section 144C of the act with a non-obstante clause was inserted later than the incorporation of the non-obstante clause in Section 153 of the Act. Thus the Legislature was aware of the non-obstante clause in Section ....
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....stance, 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 which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,- (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,- (i) the Dispute Resolution Panel; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2). (4) The Assessing Officer shall, notwithstanding anything contained in section 153 or 153B, pass the assessment order under sub-section (3) within one month from the end of the month in which,- (a) the acceptance is received; or (b) the peri....
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.... (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 of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) ***** (15) For the purposes of this section,- (a) ***** (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 non-resident not being a company, or any foreign company.' Time limit for completion of assessments and reassessments and re-computation. 153. (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one....
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.... of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, [or an order under section 92CA, as the case may be], may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the [Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be] : Provided that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the [Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,] on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted. [(3A) Notwithstanding anything contained in ....
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.... the case may be], if satisfied, may allow an additional period of six months to give effect to the order: Provided further that where an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the time specified in sub-section (3). [(5A) Where the Transfer Pricing Officer gives effect to an order or direction under section 263 by an order under section 92CA and forwards such order to the Assessing Officer, the Assessing Officer shall proceed to modify the order of assessment or reassessment or re-computation, in conformity with such order of the Transfer Pricing Officer, within two months from the end of the month in which such order of the Transfer Pricing Officer is received by him.] (6) Nothing contained in sub-sections (1) [,(1A)] and (2) shall apply to the following classes o....
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....ction 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of this section as it stood immediately before its substitution by the Finance Act, 2016 (28 of 2016). Explanation 1.-For the purposes of this section, in computing the period of limitation- (i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129; or (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court; or (iii) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) [,under clause (i) of the first proviso] to sub-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the no....
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.... (x) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; or (xi) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the [Assessing Officer; or (xii) the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132....
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...., it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 154, 155 and 158BE and for the purposes of payment of interest under section 244A, this proviso shall also apply accordingly: [Provided also that where the assessee exercises the option to withdraw the application under sub-section (1) of section 245M, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (5) of the said section, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year: Provided also that for the purposes of determining the period of limitation under sections 149, 154 and 155, and for the purposes of payment of interest under section 244A, the provisions of the fourth proviso shall apply accordingly.] Explanation 2.-For the purposes of this section, where, by an order referred to in clause (i) of sub-section (6),- (a) any income is excluded from th....
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....on of such action under section 153 or section 153B thereof, - (i) expires on the 31st day of March, 2021 due to its extension by the said notification, such time limit shall stand extended to the 30th day of April, 2021; (ii) is not covered under (i) and expires on 31st day of March, 2021, such time limit shall stand extended to the 30th day of September, 2021; (B) where the specified Act is the Prohibition of Benami Property Transaction Act, 1988, (45 of 1988) (hereinafter referred to as the Benami Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to issue of notice under sub-section (1) or passing of any order under sub-section (3) of section 26 of the Benami Act,- (i) the 30th day of June, 2021 shall be the end date of the period during which the time limit specified in or prescribed or notified under the Benami Act falls, for the completion of such action; and (ii) the 30th day of September, 2021 shall be the end date to which the time limit for completion of such action shall stand extended. 20. Sub-Sections (5) to (12) of Section 144C of the Act set out ....
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....1st April 2020 was once again made to 18 months and for Assessment Year commencing 1st April 2021 the time prescribed was 9 months. The time for Assessment Year beginning 1st April 2022 was again made 12 months. 22. Section 153(3) of the Act, as applicable to the case at hand provides a non-obstante clause inasmuch as it states, Notwithstanding anything contained in Sub-Sections (1), (1A) and (2), an order of fresh assessment in pursuance of an order under Section 254 setting aside or cancelling an assessment, may be made at any time before the expiry of nine months from the end of the financial year in which the order under Section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Provided that where the order under Section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, on or after 1st April 2019, the provisions of this Sub-Section shall have effect, as if for the words "nine months", the words "twelve months" have been substituted. In this case, since the order has been passed by the ITAT on 4th October 2019, the time will....
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....rovided in Section 153 of the Act. Sub-Section (3) of Section 153 of the Act also applies to fresh order under Section 92 CA of the Act being passed in pursuance to an order under Section 254 of the Act. Sub-Section (4) of Section 153 of the Act specifically provides that notwithstanding anything contained in Sub-Sections (1), (1-A), (2), (3) and (3-A) of the Act, where a reference under Sub-Section (1) of Section 92 CA of the Act is made during the course of the proceeding for assessment or re-assessment, the period available for completion of assessment or re-assessment, as the case may be, under the said Sub-Sections (1), (1-A), (2), (3) and (3-A) of the Act shall be extended by twelve months. 25. Moreover, Explanation-1 below Section 153 of the Act also provides for the periods which have to be excluded while computing the twelve months period mentioned in Section 153 (3) of the Act. For example - it provides for exclusion of the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited or inventory valued under Sub-Section (2-A) of Section 142 of the Act or in a case where an application made before the Income Tax Settle....
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....ble assessee, he need not go through the procedure prescribed under Section 144C of the Act. 29. In our view, the assessment has to be concluded within twelve months as provided in Section 153(3) of the Act when there has been remand to the AO by the ITAT under Section 254 of the Act. Within this twelve months prescribed, the AO has to ensure that the entire procedure prescribed under Section 144C is completed and pass a final assessment order. For this the AO has to be prompt in passing an order contemplated under Section 144C(1) of the Act and not wait to be reminded like in this case and still take almost two years to start the process. Sub-Section (13) of Section 144C provides that an assessment officer shall, upon receipt of the directions, issued under Sub-Section (5), in conformity with the directions complete, notwithstanding anything to the contrary contained in Section 153, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. What is contemplated under Section 144C (13) is the passing of the final assessment order. Twelve months as provided under Section ....
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....arely apply in this Petition also. Petition accordingly disposed in the same terms, i.e., since no final assessment order can be passed as the same is time barred, the Return of Income as filed by Petitioner be accepted. This would, however, not preclude the Revenue from taking any other steps in accordance with law. Writ Petition Nos. 3059 of 2021 and 3060 of 2021- Both for A.Y. 2018-19) 37. These Writ Petitions are almost identical to the above Writ Petitions, except that the name of the Petitioners and assessment years are different. All belong to the same group. Here also the same major ground of challenge arises, viz, that the final assessment order of assessment has to be passed within the period of limitation set out in Section 153 of the Act even if the provisions of Section 144C of the Act are applicable. The only difference in these two Petitions is that in these cases it was the original order of assessment which was required to be passed within the period of limitation set out in Section 153 of the Act. As the original assessment orders are in question, the period of limitation required to be adhered to is Section 153(1) of the Act. The applicable Assessment Year ....