AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 305
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....ns of Rs. 79,30,427/- reported in Form 3CEB. Thereafter, TPO passed order u/s 92CA(3) of the Act on 31.03.2023 making upward adjustments to ALP by Rs. 79,30,427/-. The said order was passed after taking into account the contentions of the assessee before the TPO. In view of the said order, addition of Rs. 79,30,427/- was made to the returned income of the assessee company in accordance with the provisions of 92CA(4) of the Act. The draft assessment order determining the total income of Rs. 6,49,38,057/-, passed under section 144C r.w.s. 1448 of the Act dated 22.09.2023, was duly served to assessee. 2.1 The assessee filed objections against the assessment order before the Dispute Resolution Panel, which issued directions on 22.05.2024, as per the provisions of section 144C(5) of the Act. In paragraphs 2.4.2 and 2.5.3 of its order, the Ld. DRP directed the Transfer Pricing Officer to include 'Batchmaster Software Pvt. Ltd.' as a comparable and to exclude 'XS-CAD' on account of functional dissimilarities. As per the directions of DRP, the TPO passed a give effect order to the directions received under Section 144C vide order dt.12.06.2024. The TPO revised the adjust....
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.... ".....In the order giving effect to the direction of Ld. DRP, the TPO revised the adjustments made for Provision of software development services from 67,95,430/- to 42,91,728/-The order of DRP along with order passed by TPO were received in this office in worklist on 12-06-2024." 6. In rebuttal, the ld.AR referred to the judgment of the jurisdictional High Court in the case of Rapiscan Systems Pvt. Ltd Vs ADIT (Int. Taxation) which is to the following effect : "FINDINGS: 13. Before dealing with rival contentions, it is apposite to consider Sections 144C(13) and 282(1)(c) of the Income Tax Act and Section 13 of the I.T. Act which reads thus: "Section 144C: Reference to dispute resolution panel:- (1) to (12)... (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 insection 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." "Section 282: Service o....
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....of Section 13 of the Information Technology Act, 2000 (21 of 2000)." (Emphasis Supplied) 15. The Delhi High Court in Louis Dreyfus Company India Private Limited (supra) held as under: "15. In terms of sub-section (13) of Section 144C of the Act, the AO is mandated to complete the assessment ―in conformity with the directions as framed by the DRP. That very provision commands the AO to complete the assessment within one month from the end of the month in which such a direction is received. 17. As is manifest from a reading of sub-section (13) of Section 144C of the Act, the AO is not accorded any discretion in the framing of an order of assessment once directions have come to be framed by the DRP. In fact, the provision requires the AO to frame an order of assessment in conformity with those directions and without providing any further opportunity of hearing to the assessee. This principle of law has been affirmed by the Bombay High Court in the aforenoted paragraphs of Vodafone Idea and in Shell India Markets Private Limited v. Additional Commissioner of Income Tax Officer, National Faceless Assessment Centre & Ors10. The relevant paragraph....
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...., if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory timelines as incorporated in the aforenoted provisions. Accordingly, the writ petition is liable to be allowed and the impugned order of assessment and the consequential penalty proceedings are thus liable to be set aside on this short score alone." (Emphasis Supplied) 16. The Bombay High Court in Vodafone Idea Ltd. (supra) opened as under: "15. Annexed to the affidavit of Mr. Satish Sharma is a screenshot of the CHN-Case History Notings of the Dispute Resolution Panel proceedings uploaded on the Income-tax Business Application portal. The screenshot is of the page as it appears on the Income-tax Business Application portal. A perusal of the screenshot of Case History Notings of the Dispute Resolution Panel read with the affidavit filed by Mr. Satish Sharma, the Chief Commissioner of Income-tax and Ms. Anne Varghese, the Joint Commissioner of Income-tax, clearly indicate that once the DRP directions are uploaded and the Document Identification Number ("DIN") is generated, which is also visible on....
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.... providing for an alternate redressal mechanism in the form of Dispute Resolution Panel stand defeated. That is not the intention of the Legislature when the provision was introduced in the Act. Section 144C(10) of the Act provide that the directions of Dispute Resolution Panel are binding on the Assessing Officer. By failing to pass any order in terms of the provision, the Assessing Officer cannot be permitted to defeat the entire exercise and render the same futile. When a statute prescribes the power to do a certain thing in a certain way, then the thing must be done in that way and other methods of performance are forbidden. Once the statute has prescribed a limitation period for passing the final order, it is expected that the internal procedure of the Department should mould itself to give meaning to and act in aid of the provision. Any procedural defect (there is none in this case) in the internal mechanism of the working of E- assessment Scheme, cannot operate against the interest of the assessee. Hence, the Faceless Assessing Officer cannot be believed that the Dispute Resolution Panel direction was received by him only on August 23, 2023 despite being uploaded on the Inco....
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....recently and therefore, the revenue ought to have been given some leverage to correct themselves and take corrective measures. The said observation of the Supreme Court is related to the faceless regime and cannot be stretched and made applicable in this case. This is trite that the precedential value of a judgment relates to the point which has been actually decided and not what is logically flowing from it (see Dr. (Mrs.) Chanchal Goyal v. State of Rajasthan 8). It is equally settled that a singular different fact or point may change the precedential value of a judgment (see Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. 9). 22. So far, the judgment in the case of Commissioner of Income Tax, Chennai (supra) is concerned on which reliance is placed by Sri Vijhay K Punna, it is profitable to note that in the said case, the Supreme Court considered Section 263(2) of the Income Tax Act, in the said Section the word used is 'made' and not 'receipt of the order'. The Supreme Court emphasized the cardinal principle of the law that provision of statute is to be read as it is and nothing is to be added or taken away from the provision of the statute. In oth....
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....ed under Section 2(k) of the I.T.Act, which reads thus: "Section 2: Definitions (k) ― computer resource means computer, computer system, computer network, data, computer data base or software;" 27. In the instant case, parties have taken a diametrically opposite view on the aspect whether the directions uploaded on the portal on 30.06.2022 can be treated to be 'receipt' on the part of the assessing officer. Sri Vijhay K Punna, learned Standing Counsel for revenue contends that 'receipt' will be the date when the e-mail was received by the revenue containing the DRP directions i.e., on 05.07.2020. 28. As per the view taken by the aforesaid three High Courts there is no doubt that when the originator/DRP sends its directions in computer resource outside its control, it amounts to 'despatch' and similarly, 'receipt' takes place when said electronic record enters the computer resource. 29. Section 282 of the Income Tax Act on which reliance was placed by Sri Vijhay K Punna, learned Standing Counsel for revenue makes it clear that in Sub-Section 1(c) of Section 282, the communication through electronic re....
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....pugned assessment orders dated 30.08.2022 and 01.09.2022. There shall be no order as to costs. Miscellaneous applications, if any, shall stand closed." 7. In view of the above, the appeal of assessee is required to be allowed. 8. We have heard the rival submissions and perused the material on record. Section 144C(13) of the Act provides as under: Section 144C(13) in The Income Tax Act, 1961 (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, 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. 9. From the plain reading of the above, it is clear that the order is required to be passed by the Assessing Officer within one month from the date of receipt of order form the end of the month in which the order was received by the Assessing Officer. It is the case of the assessee that the proceedings before the DRP were conducted on the basis of rules and guidelines framed under Section 144B, read ....