TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1316
X X X X Extracts X X X X
X X X X Extracts X X X X
....7/Del/2022 for the Assessment Year (AY) 2018-19, with the following prayers:- "(a) Allow this appeal and set aside the impugned order of Ld. ITAT dated 18.11.2024 for AY 2018-19 in ITA No. 2027/Del/2022. (b) Formulate and decide the substantial questions of law as stated in para 3 of this appeal; (c) Amend, alter, modify/ reframe any of the substantial questions of law which this Hon'ble Court may deem fit and proper in the facts and circumstances of this case." 4. The respondent/assessee is a company incorporated in Korea engaged in producing different kinds of railway vehicles such as multiple units, high speed trains, light rail vehicles, locomotives and passenger coaches, car manufacturing systems and environment plants. The assessee filed its return of income on 26.03.2019 declaring a total income of Rs. 13,64,92,120/-. 5. The case was selected through CASS, and notice under Section 143(2) of the Act was issued on 22.09.2019. By way of assessment proceedings, the case was referred to a Transfer Pricing Officer (TPO) on 24.06.2021. The TPO passed the order dated 25.07.2021 under Section 92CA (3) of the Act proposing upward adjustment amounting t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owed the appeal and held as under :- "17. In the context of faceless assessment process time and place of dispatch and receipt of electronic document (in this case DRP order) is required to be ascertained by reference to section 13 of Information Technology Act, 2000 which is the basis prescribed under Section 144B of Income Tax Act also (refer section 144 B (6) (v)) Hon'ble Supreme Court in case of G. S. Chatha Rice Mills,(2021) 2 SCC 209-J para 85), interpreted this very provision. Applying principles laid down by Hon'ble Supreme Court, only relevant facts necessary for deciding additional ground in present appeal relating to time barred assessment, is time of uploading by DRP of DRP order onto ITBA portal. Intimation letter to DRP order unambiguously shows 26.05.2022 as date of uploading of DRP order. This fact cannot be disputed. Except this critical and relevant information everything else (like when order is visible to AO, date of uploading some document by DCIT/ACIT circle 2(1)(1) Delhi) has been submitted by respondents. It is fair to conclude that the date of uploading DRP order on ITBA portal is 26.05.2022. As per section 144C(13) of the Act, assessment had to be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of directions issued under sub-Section 5 of Section 144C of the Act, the AO shall in conformity with the directions, notwithstanding anything to the contrary contained in Section 153 of the Act, complete the assessment without providing any further opportunity of being heard to the assessee within one month from the end of month in which the directions have been received. 13. Mr. Sunil Agarwal, learned Senior Standing Counsel for the appellant submitted that the short question involved in this appeal is what would be the actual date of "receipt" of the directions of the DRP issued under Section 144C(5) of the Act for the purpose of computing the limitation period prescribed to pass the FAO under Section 144C(13) of the Act. 14. He submitted that Section 282 of the Act prescribes four independent modes of service of communications. All four modes are in the alternative and do not prescribe any priority among the four modes. Service of communications by any of these modes will satisfy the requirements of this section. He also submitted that, Section 144B of the Act governs the procedure of assessment and mode of communication between an assessee and the Department for cases w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er Section 144C(13), date of "receipt" of DRP directions by the AO, is the statutory basis for the commencement of limitation period available to the AO for passing the FAO, Section 144C(12) of the Act, provides the limitation to DRP to "issue" directions to AO under Section 144C(5) of the Act. In support of his submission, he has relied upon Collector Of Central Excise, Madras v. M/s M.M Rubber and co., Tamil Nadu, 1992 Supp (1) Supreme Court Cases 471 and Commissioner of Income Tax, Chennai v. Mohammed Meeran Shahul Hameed (2022) 1 Supreme Court Cases 12. 19. According to Mr. Agarwal, under Section 144C(13) of the Act, date of "Receipt" of DRP order by the office of the AO, is the statutory basis for period of limitation available to the AO to pass the FAO. The date of receipt of DRP order by the AO in Dak is 01.06.2022, therefore, the FAO dated 01.07.2022 has been passed within limitation provided u/s 144C(13) of the Act. 20. He submitted that the note would show that the date of receipt of DRP directions by the AO is the only issue involved in this appeal and it is purely a question of fact to be decided on the basis of factual evidence on record as a sine qua-non. The qu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....He also stated that judgments relied upon by the respondent are delivered in the context of Indian companies and none of the cases pertain to foreign company unlike the assessee in the instant appeal. Therefore, all of them need to be distinguished on facts itself and therefore have no bearing on instant appeal. 25. In support of his submission, he has relied upon the following judgments:- a. Canon India P Ltd v. Commissioner Customs (2021) 18 SCC 563. b. CIT v. Arvind Construction Co P Ltd (1992) 193 ITR 330 (Del) c. CIT v. ITAT (2000) 245 ITR 659 (Del) d. Jaipuria Samla Amalgamated Collieries Ltd v. CIT (1972) 3 SCC 317 e. Commissioner Central Excise v. Raghuvar India Ltd (2000) 5 SCC 299 f. Kanwar Singh Saini v. High Court of Delhi (2012) 4 SCC 307 g. CCE v. M. M. Rubber & Company 1992 Supp (1) SCC 471 h. National Thermal Power Co Ltd v. CIT (1997) 7 SCC 489 26. Ms. Ananya Kapoor, learned counsel for the respondent, submitted that, as per Section 144C(13) of the Act, the AO should have completed the assessment by 30.06.2022. However, the FAO has been prepared, issued and served on 01.07.2022, in direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om the side of the DRP is complete and since the entire documents are uploaded through electronic mode, the same happens seamlessly and accordingly, the receipt of the said document also becomes instantaneous. Hence, the date of receipt of DRP direction was also 26.05.2022 itself and the due date in terms of Section 144C(13) of the Act would start reckoning from that date itself. 30. She submitted that the E-ASSESSMENT SCHEME, 2019 ("the Scheme") dated 12.09.2019, states that all communication among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National E-assessment Centre. In fact paragraph 8(b) of the Scheme states that all internal communication shall mandatorily be through electronic mode only. Hence, the reliance by the appellant/Revenue on the physical receipt copy through speed post/dak on 01.06.2022 is not relevant as Revenue is in fact taking a stand which is contrary to its own Scheme, issued under Section 143(3)(A) of the Act. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....patch of the order to the addressee. It is only upon due dispatch and that the order is outside the control of the originator, that the order can be said to have been 'issued'. In the electronic mode, issue and receipt is simultaneous as the moment the document is uploaded, it is said to have been issued and receipt. 35. She has contested the stand of Revenue/appellant for the following reasons:- a. An arbitrary distinction has been drawn by the Revenue/appellant between Faceless AO and Jurisdictional AO as it only determines who passes the FAO. The mode of communication being electronic at all stages, such a distinction makes no difference to the facts of the present case. In fact, Annexure 6 relied upon by the AO in the appeal set itself evidences that all communication throughout the proceedings has only been through electronic mode. The appellant's attempt to canvass e-assessment proceedings to apply only to proceedings conducted by Faceless AO and not Jurisdictional AO, is completely erroneous. Even for assessment proceedings conducted through Jurisdictional AO, the proceedings have to be in electronic form only. b. The stand that electronic communication ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (supra), which was admittedly is in the context of issuance of notice for initiation of reassessment to the taxpayer from the AO. That was a case of communication between the Department and the assessee and will not apply mutatis mutandis in case of communication in respect of on-going assessment proceedings between the different machineries within the Income Tax Department itself. e. In Suman Jeet Aggarwal (supra), this Court had identified 5 categories and none of those 5 categories are applicable to the facts at hand. In that case, the Revenue argued that mere generation of the notice on the ITBA portal amounts to issuance of notice to taxpayers, and this argument was rejected by this Court. In the facts and issue involved in the present case, the matter is conclusively covered by decision of this Court in the case of Louis Dreyfus Company India Private Limited (supra) which is a vital fact which has been grossly ignored by the Revenue/appellant. 36. Ms. Kapoor in support of her submissions, has relied upon the following judgments:- a. Louis Dreyfus Company India Private Limited v. DCIT 13(1) in W.P.(C) 15381/2022 (Delhi High Court). b. PCIT-1 v. M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssment of 2019, had concluded, as under:- "10. According to learned counsel, the issue which stands raised here is no longer res integra and stands conclusively settled by the decision of the Bombay High Court in Vodafone Idea Limited v. Central Processing Centre & Ors^8. Our attention was drawn to the following passages of that decision: "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 Dispute Resolution Panel directions are uploaded and the Document Identification Number ("DIN") is generated, which is also visible on the first page of the hard copy of the Dispute Resolution Panel directions, the said document is visible to the Assessing Officer of the Faceless Asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, once the e-assessment Centre is in receipt of the Dispute Resolution Panel directions, the period of limitation runs from that day. There is no requirement of a deep dive in an analysis of the phrase "upon receipt of directions" as it appears in section 144C(13) of the Act. The fundamental principle of interpretation is to assign words their natural, original and precise meaning, provided that the words are clear and take into account the purpose of the statute. It is settled law that a provision should be interpreted in its literal sense and given its natural effect. This is the elementary golden rule of interpretation of statutes. Since there is no ambiguity pertaining to the phrase "upon receipt of the directions issued under sub-section (5) of section 144C of the Act, the Assessing Officer shall. . ." there is no requirement of delving in a further in-depth analysis of the clear provision.." xxxx xxxx xxxx 20. Section 144C of the Act is a self contained provision which carves out a separate class of assessees, i.e., "eligible assessee". Section 144C of the Act was inserted in the Finance Act of 2009, and came into effect from October 1, 2009. In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... xxxx xxxx xxxx 16. This is evident from Section 144C of the Act which is extracted here in below:- "144-C. Reference to Dispute Resolution Panel.- (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. (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. (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 spe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding 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) 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 or Section 153-B, 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. (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. (14-A) The provisions of this section shall not apply to any assessment or reassessment order passe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... paragraphs of Vodafone Idea Ltd (supra) and in Shell India Markets Private Limited(supra). The relevant paragraph of the decision in Shell India is extracted herein below: "10. Sub-section (13) of Section 144C, therefore, is very clear inasmuch as the Assessing Officer shall, upon receipt of the directions issued under sub-section (5), in conformity with the directions, complete the assessment within one month from the end of the month in which such direction is received. Sub-section (13) also provides that the Assessing Officer can complete the assessment without providing any further opportunity of being heard to the assessee. This means that the moment the Assessing Officer receives the directions under sub-section (5), he has to straightaway complete the assessment and he does not even have to hear the assessee. The Assessing Officer shall simply comply with the directions received from the DRP within one month from the end of the month in which such direction is received. 18. In this backdrop, we note that both the judgments of the Bombay High Court in Shell India Markets Private Limited(supra) and Vodafone Idea Ltd (supra) construe the time lines as provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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. 23. The writ petition is allowed. The order of assessment dated 24 August 2022 as well as the penalty show cause notice dated 24 August 2022 are quashed and set aside. For reasons aforenoted and consequent to a failure on the part of the respondents to implement the directives of the DRP, the return as submitted by the petitioner would be deemed to have been accepted and the tax liability worked accordingly." (emphasis supplied) 40. In Vodafone Idea Ltd(supra), the Revenue has made it clear that once DRP directions are uploaded with DIN number on the ITBA Portal, the same is visible to the AO. 41. In fact, the intimation letter to respondent dated 26.05.2022 having a DIN number, would affirm that the same is the date of uploading of the DRP directions. The ITAT records a finding on the uploading of DRP directions on 26.05.2022 and the same has not been dispu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Louis Dreyfus Company India Private Limited (Supra) and Vodafone Idea Lts. (Supra) has held that once the DRP directions are uploaded on the portal, it would mean that the DRP/originator has lost control over it on the date and time the directions were uploaded on the portal and it must be treated to be "receipt" by the recipient i.e., AO on the same date. The relevant paragraphs of the judgment are reproduced as under:- "14. The E-assessment Scheme, 2019 ([2019] 417 ITR (St.) 12) placed reliance on section 13 of the Information Technology Act for the purpose of delivery of electronic record. The relevant portion reads thus (page 21 of 417 ITR (St.)): "10. Delivery of electronic record.- (1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of,- (a) placing an authenticated assessee's registered account; or copy thereof in the (b) sending an authenticated copy thereof to the registered e-mail address of authorised representative; or the assessee or his (c) uploading an authenticated copy on the assessee's mobile app; and followed by a real time a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is deemed to have been received by the assessment units concerned once received through the National e-Assessment Centre. Thus, once the e-assessment centre is in receipt of the Dispute Resolution Panel directions, the period of limitation runs from that day. There is no requirement of a deep dive in an analysis of the phrase 'upon receipt of directions' as it appears in section 144C(13) of the Act. The fundamental principle of interpretation is to assign words their natural, original and precise meaning, provided that the words are clear and take into account the purpose of the statute. It is settled law that a provision should be interpreted in its literal sense and given its natural effect. This is the elementary golden rule of interpretation of statutes. Since there is no ambiguity pertaining to the phrase 'upon receipt of the directions issued under sub-section (5) of section 144C of the Act, the Assessing Officer shall...' there is no requirement of delving in a further in-depth analysis of the clear provision.... 21. Thus, if the provisions of section 144C as mandated by the statute are not strictly adhered to the entire object of providing for an alternate redress....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which such a direction is received. Thus, the key words used in section 144C(13) are "upon receipt of directions issued under sub-section (5)". 24. Although, the Delhi, Bombay and Madras High Courts have already taken a view and we respectfully agree with that once such directions of Dispute Resolution Panel are uploaded on the portal, the Dispute Resolution Panel lost control over it and the date on which it entered the portal, the recipient, i.e., the Assessing Officer comes to know about it. 25. To elaborate, it is profitable to refer to section 13(1) of the Information Technology Act. This sub-section deals with "despatch of electronic record" and envisages that "despatch" of an electronic record is when it enters the computer resource outside the control of originator. Indisputedly, in this case, the "originator" is the Dispute Resolution Panel. Sub-section (za) of section 2 of the Information Technology Act defines the word "originator" and reads thus: "2. Definitions.-... (za) 'originator' means a person who sends, generates, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored or transm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gard, it is hereby stated that the directions dated June 30, 2022 were uploaded on Income-tax Business Application portal on June 30, 2022. Further, the physical copy of the directions was also sent to the Assessing Officer on June 30, 2022 through speed post." (emphasis supplied) 31. The Income-tax Department through communication dated June 30, 2022 (annexure P-19) informed that the order under section 144C(5) dated June 30, 2022 is having Document No. (DIN) ITBA/DRP/M/144C(5)/2022-23/1043689612 (1). This is a system generated document and it does not require any signature. A conjoint reading of communications dated January 30, 2024 and March 5, 2024 (annexure P-18) and communication dated June 30, 2022 (annexure P-19) leaves no room for any doubt that the Dispute Resolution Panel's directions were despatched on June 30, 2022 and also uploaded on the portal on the same date. Thus, the Dispute Resolution Panel/originator had lost control over it on the date and time the said directions were uploaded on the portal. Hence, the same must be treated to be a "receipt" by the recipient, i.e., the Assessing Officer on the same day, i.e., June 30, 2022. (See paragraph 26....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... month from the end of the month on which DRP order/ directive was received by the AO would be 30.06.2022. In the case of the appellant/Revenue, the FAO was passed only on 01.07.2022, which is clearly barred by limitation as contemplated under Section 144C (13) of the Act. 48. Mr. Agarwal has relied upon the judgments, as noted below along with the propositions of law laid down therein: i. GAIL (India) Ltd (Supra):-The Court found that on a refund claim the limitation period starts from the "date of service" of the final assessment order. This means that simply uploading the order to a customs portal is not enough. The assessee must receive formal intimation of the order for the one-year limitation period under Section 27(1B)(c) of the Customs Act, 1962, to begin. Furthermore, Merely because the Customs Department has uploaded the final assessment order on portal is not sufficient compliance of intimation to the assessee as it is a condition sine qua non to file the refund claim within one year as per Section 27(1B)(c) of the Act from the date of finalization provided such order of assessment is communicated to the assessee. The judgment is clearly distinguishable as it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....if applied immediately. (vi) Receipt by CIT(Judicial) suffices. (vii) For common orders, limitation from earliest receipt by any officer. (viii) Administrative instructions cannot override statutory limitation start date. v. Canon India P Ltd (Supra):-The Supreme Court held that only the "proper officer" who assessed/cleared goods under Section 17 can issue show-cause notices for duty recovery under Section 28 of the Act. DRI-issued notice for misclassification of cameras as non- video (based on 29-min recording limit) was invalid. The Review petition (2024) partially allowed, clarifying DRI officers can be empowered via notifications under Section 4(2); 2021 judgment per incuriam for overlooking Section 28(11) validation upheld. vi. Arvind Construction Co P Ltd. (Supra):- This Court held that limitation for reference under Section 256 to High Court starts from the date the jurisdictional CIT receives the ITAT order, not the CIT(Judicial). Receipt by any "Commissioner" triggers the 60-day period, but internal forwarding delays are the Department's responsibility. Earlier decisions aligned; emphasized strict statutory interpretation witho....