TaxTMI 
TaxTMI 
2023 (9) TMI 1333
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decision of the Delhi High Court in GE Packaged Power Inc. has not attained finality as the Department has filed review application in the Hon'ble Supreme Court." The assessee in its cross objection raised the following grounds: - Ground No.1 "On the facts and circumstances of the case the Ld.CIT(A) erred in confirming the action of the Assessing Officer in issuing the final assessment order which is in clear contravention of Section 144C of the Income Tax Act, 1961 and the judgment of Hon'ble Supreme Court of India in the case of Zuari Cement Limited Vs. ACIT. The final assessment order is bad in law to the extent that the Ld. Assessing Officer in terms of Section 144C of the Income Tax Act, 1961 should have issued a draft assessment order instead. Ground No. 2 On the facts and circumstances of the case the Ld.CIT(A)/Assessing Officer erred in disallowing standby charges totaling to Rs. 54,600,000/- on the ground of business exigency and business prudence not proved by the appellant." 2. In the cross objection filed by the assessee, the assessee challenged the validity of the final assessment order passed by the Assessing Officer u/s 143(3)/144C r.w.s. 254 of the Income....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessment order straight-away is not correct. The Id. AR, therefore, submitted that any consequent order passed by the Id. Assessing Officer is bad in law. The Id. AR relied on the decision of the Hon'ble Delhi High Court in the case of Nokia India Pvt. Ltd. Vs, AC1T in WPC No. 3629 (Del) of 2017 of Hon'ble Delhi High Court which has been affirmed by Hon'ble Supreme Court in ACIT Vs. Nokia India Pvt. Ltd. (2018) 259 taxmann.com 91 (SC). In view of this the Id. AR submitted that the order passed on 31.03.2015 is final order along with the direction to issue demand and challan initiating penalty proceedings is intuition of any merit and is liable to be quashed. 8. The Id. DR stated that this issue has been considered by the Id. CIT (Appeals) in para 5.3 of his order. He further relied on para 5.5 stating that assessee has already availed an opportunity of filing objections against the order before the D.RP. He further relied on the finding of the Id. CIT (Appeals) wherein he has held that in the present case the order is passed under Section 143(3) read with Section 144C( 13) read with Section 254 of the Act where the Assessing Officer has given effect to the direction of the ITA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 10A of the Act were set aside and the Assessing Officer was directed to frame the assessment afresh. The matter was restored to the Assessing Officer vide para 4.2.1 of ITAT order dated 17th July, 2012, which reads as under: "4.2.1 As a view has already been taken by the Tribunal in the aforesaid case and in the case of Ameriprise India Pvt. Ltd. in ITA No, 5694/De 1/201.1 for assessment year 2007-08 dt26-3-2012, we are bound the follow the view. Therefore, it is held that it was incumbent on the AO to supply the information to the assessee, obtain its objections, if any, and pass order after taking into account the information and the objections of the assessee. This has not been done in respect of 20 comparables." Therefore, the matter of transfer pricing adjustment is restored to the file of the AO for following proper procedure as mentioned above and decide the matter de novo. "Pursuant to the aforesaid remand, the Assessing Officer passed the assessment order dated 31st March, 2014 and the same was challenged by the respondent-assessee before the CIT(A), Being aggrieved by the order passed by the CIT(A), respondent-assessee as well as Revenue filed appeals before the ITA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by hint 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 section I53B, 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 period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rther opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee. (14A) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner as provided in sub-section (12) of section 144BA. (15) For the purposes of this section,- (a) "Dispute Resolution Panel" means a collegiums comprising of three Principal Commissioners or 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 non-resident not being a company, or any foreign company," 17. In the opinion of this Court, Section 144C is a self contained provision which carves out a separa....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., without reference of the Dispute Resolution Panel which comprises of three Principal Commissioners or Commissioners of Income-tax constituted by the Board. 20. Now to accept the appellant's argument would be to permit the Assessing Officer to decide the objections filed by the Assessee - which power has been specifically denied by the statute. IT IS SETTLED LAW THAT WHEN A POWER IS GIVEN TO DO CERTAIN THING IN A CERTAIN WAY, THE THING MUST BE DONE IN THAT WAY OR NOT AT ALL AND OTHER METHODS OF PERFORMANCE ARE FORBIDDEN 21. It is further settled law that when a power is given to do certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are forbidden. [See: Taylor vs. Taylor [1875] 1 Ch.D. 426; Nazir v. King Emperor AIR 1975 SC 985 and Babu Varghese v. Bar Council of Kerala [1999] 3 SCL 422. FAILURE TO ADHERE TO THE MANDATORY PROCEDURE PRESCRIBED UNDER SECTION 144C OF THE ACT WOULD VITIATE THE ENTIRE PROCEEDINGS AND THE SAME CANNOT BE TREATED AS AN IRREGULARITY/CURABLE DEFECT. 22. The appellant has also contended that the failure to follow the procedure under section 144C of the Act, at the highest, was a proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owing the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) and a number of other decisions, the Madras High Court in Vijay Television (P.) Ltd. v. Dispute Resolution Panel (supra) quashed the final order of the AO and the demand notice. Interestingly, even as regards the corrigendum issued, the Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. 14. Recently, this Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India (20161 388 1TR 383 (Delhi), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra), the Madras High Court in Vi jay Television (P.) Ltd. v. Dispute Resolution Panel, Chennai (supra) as well as the Bombay High Court in International Air Transport Association v. DCIT (20161 290 CTR (Bom.) 46, came to the same conclusion. 15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under section 144C(1) of the Act would, at best, be a curable defect. According to him the matter must be....