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2023 (10) TMI 785
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....ppearing on behalf of Mr. Narendar Chetty, learned counsel for the petitioner and Ms. K. Mamata Choudary, learned counsel for the respondent-Department. 3. The whole dispute in the two writ petitions originates from an order passed by the Income Tax Appellate Tribunal (for short the "Tribunal") in ITA No. 108/Hyd/2011 for the assessment year 2006-2007. The Tribunal vide order dated 27.06.2014 had partly allowed an appeal of the petitioner/assessee. 4. For the aforesaid year, the petitioner/assessee had filed its return after claiming deductions under Section 10A of the Act. The said return of the petitioner/assessee was subjected to scrutiny by the Assessing Officer. The Assessing Officer noting certain international transactions being made by the petitioner/assessee referred the matter to the Transfer Pricing Officer (TPO) under Section 92CA(1) for determining the Arm's Length Price (ALP). On examination, the TPO noted that while selecting comparables in ITES-BPO category, the petitioner/ assessee has wrongly applied incomparables with the comparables ignoring the provisions of rule 10B(4) of the Act. Finally, the TPO passed a draft assessment order. The petitioner/assesse r....
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.... Chief Commissioner or Principal Commissioner or Commissioner. "(3) The provisions of sub-sections (1), (1A), (1B) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of subsection (2A), be completed at any time- (i) [***] (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act; (iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147." The provision of Section 153 went in for an amendment which came into force from 01.06.2016. The amended provision under Section 153(3) also is being reproduced herein under: "(3) Notwithstanding anything contained in sub-sections (1) [,(1A)] and (2), an order of fresh assessment [or fresh order under section 92CA, as the case may be,] in pursuance of an order ....
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....tant case having been passed after a considerable period of time and the time limit was also lapsed as is required under sub-section (2A) of Section 153. Learned counsel appearing for the petitioner in support of his contentions, relied upon the decision of High Court of Gujarat in the case of Instruments Control Co. v. Chief Commissioner of Income-tax-1 & 2 (2008) 215 CTR 366 = (2008) 300 ITR 176 Delhi. A similar view has also been taken by the High Court of Delhi in the case of Commissioner of Income-tax v. Bhan Textile (P.) Ltd. (2008) 215 CTR 366 Delhi = (2008) 300 ITR 176 Delhi and also in the case of Nokia India (P.) Ltd. v. Deputy Commissioner of Income-tax (2017) 85 taxman.com 291 (Delhi). A similar view has also been taken by the High Court of Kerala in the case of DR R.P. PATEL, HAHNEMAN HOUSE, COLLEGE ROAD, KOTTAYAM VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, KOTTAYAM in WPC No. 29193 of 2008 (A) decided on 09.03.2015. 10. Per contra, learned counsel for the respondent-Department opposing the petition submits that it is wrong on the part of the petitioner/assessee to state that the authority is denude of its powers after the prescribed time limit is p....
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....al under Section 254, the time limit prescribed under sub-section (2A) of Section 153 so also sub-section 3 of Section 153 are to be only considered to be a sort of guidelines or a directives without any mandatory force of law. It was in this context that the learned counsel contended that the said provisions have to be treated only as a directory and not a statutory command. 15. Learned counsel for respondent-Department also contended that the Tribunal had remanded only few issues raised before it to the authority for fresh consideration, therefore, it does not amount to total remand and thus, Section 153 (2A) of the Act has no application to the present case. In other words, the contention of learned standing counsel is that Section 153 (2A) of the Act is applicable only where, the matter is remanded in toto and Section 153 (2A) has no application in case of partial remand. 16. Having heard the contentions put forth on either side and on perusal of records, so far as the factual aspects are concerned, particularly, in respect of the material dates of the orders passed by the different authorities including that of the Tribunal is not in dispute. It is also not in dispute th....
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....Appellate Authority after setting aside or cancelling the earlier assessment order, the authority concerned is required to make an assessment in terms of the direction of the Appellate Tribunal or the Appellate Authority as the case may be within a stipulated period. A plain reading of the aforesaid statutory provisions does not give any other interpretation other than that mentioned above. 20. The very purpose of enacting sub-section (2A) goes to show that it has been enacted to meet with a situation where the original assessment order has been set aside/cancelled by the Appellate Tribunal or the Appellate Authority under Section 250 or under Section 254 or under Section 263 or under Section 264. As regards sub-section 3 of Section 153 as it stood prior to the amendment carried out in the year 2016, the reading of the said provision of law would also give a clear indication that there shall be no time limit for completion of the assessment, reassessment and recomputation towards compliance of any direction contained in an order under Section 250, 254, 260, 262, 263 or Section 264 subject to the provisions of sub-section (2A) and in a proceeding otherwise than by way of an appea....
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....53. Such classes included a case of fresh assessment made under section 146; a case of assessment, reassessment or re-computation in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 of 264, as also in case of a firm, where an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147. 19. The situation, however, must bee seen to have undergone a material change upon introduction of sub-section (2A) of section 153 of the Act, which provides inter alia that notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section 146 or in pursuance of an order, under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the Assessing Officer or the order under section 250 or section 254 is received by th....
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....he proceedings to the Assessing Officer for fresh consideration after summoning two witnesses and carrying out such probe as may be necessary. We may record that such commissions paid to the two agencies was the sole dispute between the assessee and the Department. In the original assessment, the Assessing Officer discussed only this issue and made corresponding disallowance. In essence, thus, the Assessing Officer was required to pass a fresh order of assessment which was necessary on account of an order passed by the Tribunal under section 254 of the Act cancelling the assessment framed by the Assessing Officer. The period of limitation prescribed in section 153(2A), therefore, would not apply. While such an order was served on the Commissioner on 3.8.1994, within a period of two years of the end of such financial year, a fresh order of assessment had to be passed by the Assessing Officer. The same not having been done, in our view, such proceedings have become time-barred. The assessment placed before the Assessing Officer by the Tribunal's order, therefore, must be treated as having abated. In that view of the matter, the declaration prayed for by the petitioner must be granted....
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.... pass a fresh assessment order upon remand where Section 153 (2A) would apply, the AO would be bound to follow the time limit imposed by sub-section (2A). Where the AO as only giving effect to an appellate order, then Section 153 (3) (ii) of the Act would apply. 25. In the present case, of the seven issues, the assessment in respect of five was set aside and the issues remanded for a fresh determination. Whether the remand was to the TPO or the DRP would not make a difference as long as what results from the remand is a fresh assessment of the issue. Clearly, therefore, the time limit for completing that exercise was governed by Section 153 (2A) of the Act." 24. The High Court of Kerala also in the case of DR R.P. PATEL, (supra) in paragraph No.12 held as under: "12. The resultant position therefore is that, even in a case where only one issue has been directed to be considered afresh, the limitation under Section 153(2A) would apply. It is clear from the passage in [(2008) 300 ITR 173 (Delhi] (supra) extracted above that, sub section (3) of Section 153 applies to a different situation where only a consequential order has to be passed in implementation of a dir....