TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 708
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....sing the refund claim of the Petitioner. The directions were given by the DRP to the 1st Respondent under Section 144(C)(5) of the Income Tax Act, 1961 ("the Act"). 3. The main issue raised in the petition is the effect of not completing the assessment within a period of one month from the end of the month in which the Assessing Officer receives such directions from the DRP under Section 144(C) (5) of the Act. According to the Petitioner, if the Assessing Officer fails to complete the assessment within the time frame as prescribed by Section 144(C)(13), the transfer pricing addition ought to be treated as non est on the ground that it becomes time barred. 4. The facts and circumstances relating to the dispute, which is the subject matter of the present Petition, are as follows:- (i) The Petitioner filed its Return of Income for AY 2010-2011 on 14th October, 2010. In the said Return of Income, the Petitioner declared its total income as Rs. 78,58,40,928.00. The Petitioner claimed a refund of Rs. 3,32,90,793.00 arising out of (a) tax deducted at source of Rs. 60,49,110.00; and (b) advance tax paid of Rs. 29,51,10,000.00. (ii) The Return of Income filed by the ....
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.... the case of the Petitioner that the 1st Respondent erred in not following the directions issued by the DRP on 13th November, 2014, by which the DRP allowed the depreciation on goodwill. Therefore, the Petitioner, on 18th December, 2015, filed an Appeal before the Mumbai Bench of Income-Tax Appellate Tribunal, Mumbai, and challenged the final assessment order dated 31st December, 2014, passed by the 1st Respondent. (x) The Tribunal decided the Appeal filed by the Petitioner on 18.12.2015. As far as the transfer pricing adjustment of Rs.5,26,86,111.00 is concerned, the Tribunal remanded the matter back to the file of the DRP for fresh adjudication. The remand was following the precedent adopted in the Petitioner's own case of earlier Assessment Year i.e. A.Y. 2009 & 2010. The Tribunal directed the DRP to pass a speaking and reasoned order after affording a reasonable opportunity of being heard to the Petitioner. Thus, the petitioner's ground concerning the erroneous disallowance of the corporate service charge was treated as allowed by the tribunal for statistical purposes. Further, the Tribunal allowed the Petitioner's claim of depreciation on intangibles. It also allowed ....
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....ons issued by the DRP on 19th March, 2020. He further submitted that the requirements of Section 144(C)(13) is that the final assessment order ought to be passed within one month from the end of the month in which the 1st Respondent receives such directions. Mr. Mistry further submitted that the 1st Respondent did not follow the mandate of Section 144(C)(13) and, therefore, the Petitioner, by its letter dated 5th August, 2020, requested the 1st Respondent to give effect to the directions of the DRP passed on 19th March, 2020. Mr. Mistry submitted that after the letter dated 5th August, 2020, the representative of the Petitioner constantly followed up on the matter and visited the office of the 1st Respondent on several occasions to ascertain the status of the pending proceedings. 6. Mr. Mistry has drawn our attention to the statement made in paragraph 19 of the petition, where the Petitioner has stated that during their visits to the office of the 1st Respondent, the officer assured the authorised representative of the Petitioner that the issues concerning the specific assessment year in question would soon be taken up for consideration. Mr. Mistry also took us through the dates....
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....s (P) Ltd. Vs. Dispute Resolution Panel-2, Bangalore [2021] 127 Taxman.com 332, passed by the learned Single Judge of the Madras High Court, and Commissioner of Income Tax Vs. Roca Bathroom Products (P.) Ltd, [2022] 140 Taxman.com 304, passed by the Division Bench of the Madras High Court, and also decision of this Hon'ble Court in Shelf Drilling Ron Tappmeyet Ltd. Vs. Assistant Commissioner of Income Tax (International Taxation), [2023 SCC Online Bom 1589]. He submitted that, in the case of Shelf Drilling Ron Tappmeyer Ltd., [Bombay], this Hon'ble High Court has considered both the decisions delivered in Roca Bathroom Products (P) Ltd. passed by the Single Judge and the Division Bench of the Madras High Court. 10. Mr. Mistry submitted that the decision of this court in Shelf Drilling Ron Tappmeyer Ltd. was the subject matter of challenge before the Hon'ble Supreme Court in the case of Asst. Commissioner of Income Tax Vs. Shelf Drilling Ron Tappmeyer Ltd. [SLP/20569 - 20572/2023 dated 8/8/2025]. In that case, the Hon'ble Supreme Court has dealt with the issues concerning the interpretation of Section 144(C) and 153 of the Act and the timelines provided therein. Her Ladyship Just....
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.... the assessment. According to the revenue, not passing the final assessment order within the time frame provided by the Section, does not vitiate the proceedings, and the same cannot be treated as time barred. Ms. Nagaraj further submitted that the larger issue of interpretation of Section 144 C and that of Section 153 of the Act relating to the timelines is pending before the Hon'ble supreme Court in Asst. Commissioner of Income Tax Vs. Shelf Drilling Ron Tappmeyer Ltd. [SLP/20569 - 20572/2023 dated 8/8/2025]. Therefore, reliance ought not to be placed on the decisions of this Court in Shelf Drilling Ron Tappmeyer Ltd. (Supra) or that of the Madras High Court in Roca Bathroom Products (P) Ltd. (Supra). In any case, Ms. Nagaraj submitted that the 1st Respondent is in the process of completing the assessment as per the provisions of Section 144C(13) of the Act. 14. We have considered the above submissions made on behalf of the Petitioner and the Revenue. 15. There is no dispute about the facts, circumstances, and the sequence of events and communications addressed by the Petitioner to the 1st Respondent. Admittedly, directions were given by the DRP in the second round of proce....
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....nt a draft assessment order to the Petitioner on 12th March, 2014. Once the Assessing officer invokes the provisions of Section 144 C (1), then the assessee on the receipt of the draft order has two options under Section 144C(2); i) file his acceptance of the variations to the Assessing officer; or ii) file his objections, if any, to such variations either with the DRP or the Assessing officer. 20. Section 144 C (2) reads as follows: "144 C (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." 21. In the present case, the Petitioner filed its objections with the DRP. Therefore, the provisions of Section 144C(5) were triggered. Section 144C(5) reads as follows: "144C(5) The Dispute Resolution Panel shall, in a case where any objection is received under subsection (2), issue such directions, as it thinks fit, for the guidance of the Assessing O....
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....153 B are expressly excluded. 26. Therefore, by clear language of Section 144(C)(13) of the Act, the 1st Respondent ought to have completed the assessment order within a period of one month from the end of the month in which such direction of the DRP is received. We agree with the submissions of Mr. Mistry that the Assessing Office does not have any discretion after the DRP issues directions under section 144C(5), and he cannot deviate from the procedure envisaged under the Section. In the present case, despite repeated reminders, the 1st Respondent has not completed the assessment in conformity with the directions of the DRP, as passed on 19th March 2020. 27. As far as the submission of the Revenue is concerned, that the provisions of the Act, and in particular Section 144(C)(13), do not prescribe a specific time limit for the 1st Respondent to complete the assessment within the specified time when the case is of a remand by the Tribunal is concerned, we are of the view that the submission is not sustainable in view of the clear and unambiguous language of Section 144(C)(13) of the Act. If the submission of the Revenue is accepted, then the entire scheme and mandate of Secti....