TaxTMI 
TaxTMI 
2025 (6) TMI 60
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.....09.2019. The assessee in the report in Form 3CEB has reported following transactions as international transactions: S.No. Name of the AE Description of International Transactions Transfer Pricing Method Amount in INR 1. LS Cable & System Ltd. Purchase of raw materials TNMM 61504914 2. LS Cable & System Ltd. India Project Office Purchase of raw materials TNMM 6528553 3. LS Vina Cable & System Purchase of raw material TNMM 8611687 4. LS Global Co.Ltd. Purchase of raw material TNMM 279045817 5. LS Metal Co.Ltd. Purchase of raw material TNMM 46458376 6. LS Cable & System Ltd. Sale of manufactured goods TNMM 313634879 7. LS Cable & System Ltd. India Project Office Sale of manufactured goods TNMM 129455015 8. LS Cable & System Ltd. India Project Office Sale of manufactured goods Other Method 3809602 9. LS Cable & System Ltd. Purchase of machinery Other Method 49861799 10. LS Cable & System Ltd. India Project Office Receipt of services TNMM 110194344 11. LS Cable & System Ltd. Corporate guarantee Other Method 0 12. LS Cable & System Ltd. Issue of share capital Other Method 868455000 ....
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....nces of the case and in law, in not allowing the Depreciation/capacity adjustment carried out by Appellant for improving comparability analysis based on his own conjectures and summaries even though the same is allowed under the Income tax Act. 6. That the Ld. AO/TPO/DRP has erred in the facts and in circumstances of the case and in law, in rejecting the custom duty adjustment undertaken by Appellant for improving comparability analysis based on his own conjectures and summaries even though the same is allowed under the Income tax Act. 7. That the Ld. AO/TPO/DRP has erred in the facts and in circumstances of the case and in law in rejecting cash profit level indicator without appreciating the fact that there were significant differences between the depreciation of comparable companies visà- vis the appellant. 8. That the Ld. AO/TPO/DRP has erred in the facts and in circumstances of the case and in law in not making appropriate adjustments to account for differences in working capital employed by the Appellant vis-a-vis the comparable while computing margins of comparable companies. 9. That on facts and in laws, the AO erred in holding that the Appellant has furnished....
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....55(1) on 27.06.2022. This means the same would have been uploaded on portal on this date and thus, being made available to the appellant, TPO, NFAC and thus available to AO as well. Ld. AR further argued that the AO has mentioned in its final order that the DRP directions were issued on 29.06.2022. Thus, taking the date of DRP directions as mentioned in the AO Order, the due date to pass the AO final order would also be 31.07.2022. Since the final Assessment Order has been passed on 24.08.2022 which is in divergence to due date prescribed u/s144C (13) of the Act, the ld. AR of the assessee submits that the final order passed by the Assessing Officer is barred by limitation, and hence, should be treated as void. 11. On the other hand, the ld. CIT DR vehemently supported the order of the lower authorities and argued that in the present case though the ld. DRP has passed the order on 27.06.2022 but it is possible that the said order was received by the AO in the month of July, 2022 and thus the final order passed by the Jurisdictional Assessing officer on 24.08.2022 is well within the period of limitations as provided in section 144C (13) of the Act. He thus prayed that this ground o....
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....ny directions referred to in sub-section (5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. (8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under subsection (5) for further enquiry and passing of the assessment order. (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) U....
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.... order passed by ld. DRP was received by the AO and expired on 31.07.2022. However undisputedly, the final assessment order was passed on 24.08.2022 which is beyond the period of one month as allowed in section 144C(13) of the Act. Thus the final order passed u/s 143(3) r.w.s. 144C(13) is barred by limitations and is void and invalid order. The Hon'ble Jurisdictional High Court in the case of PCIT Vs. M/s Fibrehome India Pvt. Ltd. in ITA No. 91 of 2024 vide order dt. 05.02.2024 has held as under:- "3. We note that an identical question has been answered by us in W.P.(C) 15381 of 2022 titled as "Louis Dreyfus Company India Private Limited vs. Deputy Commissioner of Income Tax Circle 13(1), Delhi & Ors." in favour of the assessee / petitioner. While dealing with this question, we had observed as follows:- "14. The determination which the AO makes in the first instance is recognized to be a draft of the proposed order of assessment by virtue of section 144C(1) of the Act. If the assessee be aggrieved by the proposed order of assessment, it is entitled to file objections before the DRP in accordance with Section 144C(2) of the Act. The power of the AO to complete the assessment on ....
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....ne Idea construe the time lines as provided in Section 144C to be mandatory in character. In our considered opinion, this interpretation is in accord with the intent behind insertion of that provision and the bare text and spirit of that section. Thus, we accord our approval to the interpretation as set out in the aforenoted decisions of the Bombay High Court. 19. Further, the procedure of assessment as provided under Section 144C does not envisage or contemplate the interdiction or involvement of the TPO once a directive has been framed by the DRP. The role of the TPO comes to an end once an order as contemplated under Section 92 CA(4) of the Act has come to be framed and remitted to the AO. There was thus no occasion for the TPO having resumed proceedings post the passing of the direction by the DRP on 20 June 2022. 20. Undisputedly, the directive of the DRP came to be uploaded on the ITBA portal on 24 June 2022. It is additionally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (Additional/ Joint/ Deputy/ Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) on 27 June 2022. It is there....
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....te are not strictly adhered the entire object of providing for an alternate redressal mechanism in the form of DRP 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 DRP are binding on the AO. By failing to pass any order in terms of the provision, the AO 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 assessee. Hence, the FAO cannot be believed that the DRP direction was received by him only on 23rd August 2023 despite being uploaded on the ITBA portal on 25th March 2021. The failure on the part of department to fol....
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....takes centre stage in the adjudication of this dispute. The said sub-section is set out below: "(13) Upon receipt of the directions issued under subsection (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." From the above provision, it is evident that the specified time limit is one month from the end of the month in which directions are received. It is also clear that the time limit should be computed from the date of receipt of directions issued under sub-section (5) thereof. Sub-section (5) of Section 144C deals with the issuance of directions by the DRP. The admitted position is that the DRP issued directions on 16.06.2022 and this fact is borne out by examining the proceedings of the DRP, which is contained at page Nos. 122 to 130 of the typed set of papers. The said proceedings also record that the copy of the directions of the DRP is being forwarded to the assessee, the assessing officer and t....
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....ssing officer was duly authorized to exercise jurisdiction either under the WhatsApp message issued on 13.04.2022 or upon the physical file being signed on 21.04.2022." 17. Further the decision of the ITAT, Chennai Bench 'D" in the case of M/s Cognizant Technology Solutions India Private Limited (as successor-in-interest of M/s KBACE Technologies Private Limited) vs. ACIT in IT(TP)A 61/CHNY/2023 vide order dated 29.05.2024 has held has under: "10. We have heard rival submissions in the light of facts of the case, evidence placed on record and judicial citations relied upon. Ground of appeal no.1 is general in nature and hence bereft of any meritorious adjudication. Coming to grounds of appeal Nos. 2 to 6 whereby the assessee has challenged procedural irregularities in giving effect proceedings and thus arguing that the AO dated 18.05.2023 is barred by limitations, we find considerable force in the arguments put forth by the assessee. Facts on records indicate that the DRP Bangalore had given its directions on 01.12.2022. Within the meanings of section 144C(13) was incumbent on the AO to have passed his order on or before 31.01.2023. The DR could not controvert the said timeline ....