TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1433
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....ution Panel ("DRP") under section 144C(5) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and consequently, not granting the refund claimed by the Petitioner. 3. We were informed during the hearing that during the pendency of this Writ petition, Respondent No. 1 has passed an order dated 12th August 2025 giving effect to the Tribunal's order dated 12th September 2018 which resulted in a refund of Rs. 1,44,61,013/-, which amount has been credited to the account of the Petitioner on 15th September 2025. The Petitioner claims that it is entitled to further interest under the Act, and that it will pursue the same in accordance with law. While passing the said order dated 12th August 2025, Respondent No. 1 inadvertently missed granting depreciation on "brand usage", which has been allowed in an earlier year, and hence the Petitioner has filed a rectification Application dated 15th September 2025. Counsel for the Respondent states on instructions, that the rectification Application would be disposed of in accordance with law, within 2 weeks from the date of uploading of this order on the High Court Website. We appreciate the conduct of the 1st Respondent in pass....
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....otal income at Rs. 15,69,32,395/- as against the Returned loss of Rs. 6,37,59,600/-. (vi) The Petitioner, being aggrieved by the draft Assessment Order dated 21st March, 2016, filed its objections before the DRP under Section 144C(2) of the Act. The Petitioner also preferred an additional claim of depreciation on brand usage before the DRP. (vii) On 08th December, 2016, the DRP provided its directions in accordance with the provisions of Section 144C(5) of the Act. (viii) Thereafter, the 1st Respondent, on 17th January 2017, passed the final assessment order, under Sections 143(3) read with 144(C)(13) of the Act and determined the Petitioner's income as Rs. 12,99,83,723/- against the Returned loss of Rs. 6,37,59,600/-. (ix) Thereafter Respondent No.1 passed a rectification Order on 24th February 2017 computing the total income at Rs.7,89,12,190/-. (x) Aggrieved by the final order, the Petitioner filed an Appeal before the Mumbai Bench of Income-Tax Appellate Tribunal, Mumbai, and challenged the final assessment order dated 17th January 2017, passed by the 1st Respondent. (xi) The Tribunal decided the Appeal filed by the Petition....
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....f of the Petitioner, submitted that the 1st Respondent was required to pass a final Assessment Order as mandated by the provisions of Section 144(C)(13) of the Act, in conformity with the directions 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. Mistri 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. Mistri submitted that after the letter dated 5th August, 2020, the representative of the Petitioner constantly followed up the matter and visited the office of the 1st Respondent on several occasions to ascertain the status of the pending proceedings. 7. Mr. Mistri has drawn our attention to the statement made in paragraph 17 of the petition, where the Petitioner has stated that during their visits to the office of the 1st Respondent, the officer assured the aut....
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....tion 144(C) and the applicable provisions of Section 153, the proposed adjustments/additions proposed in the transfer pricing proceedings will stand vitiated. 10. Mr. Mistri also drew our attention to the decisions in Roca Bathroom Products (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. The learned Senior Counsel also pointed out that this Court had passed an order in the matter of Shelf Drilling Ron Tappmeyer Ltd. Vs. Assistant Commissioner of Income Tax (International Taxation), [2023 SCC Online Bom 1589]. which 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. However, in the SLP filed by the Department, the Supreme Court had passed an interim order dated 22nd September 2023 that Shelf Drilling Ron Tappmeyer Ltd. judgement shall not be cited as a precedent in subsequent matters until further orders. 11. Mr. Mistri also pointed out t....
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....s directions in a matter that was the subject of remand and if the directions are passed in the second round, then the timelines provided under Section 144(C)(13) of the Act are not applicable. Therefore, according to the revenue, the 1st Respondent is not bound to complete the assessment within one month from the end of the month in which such directions are received. In this view of the matter, she submitted that the 1st Respondent has already passed the order giving effect on 12th August 2025 against which the Petitioner has filed a rectification Application. The 1st Respondent is in the process of passing the rectification Order. 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 144C 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....
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....n 144C(15)(b)] in case he proposes to make, on or after the 1st October, 2009, any variation which is prejudicial to the interest of such Assessee. Section 144 C(1) reads as follows: "144 C(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." 20. Admittedly, the Petitioner being an eligible assessee, the 1st Respondent sent a draft assessment order to the Petitioner on 21st March, 2016. Once the Assessing Officer invokes the provisions of Section 144C(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 and the Assessing officer. Section 144C(2) reads as follows:- "144C(2) On receipt of the draft order, the eligible assessee shall, wit....
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...., the assessment without providing any further opportunity of being heard to the assessee,..." (emphasis supplied). Therefore, the Assessing officer ought to complete the assessment and that too in conformity with the directions given by the DRP under sub-section (5) of Section 144(C) of the Act. The word 'shall' in the Section makes the provision mandatory. 25. Further, in view of the non obstante clause in Sub-Section 13 to Section 144(C), it is clear that the said provision imposes a restriction on the Assessing Officer and denies him the benefit of the more expansive time limit available under Section 153 or Section 153(B) to pass a final order of assessment. The aforesaid provision clearly mandates that he has to pass the final order of Assessment within one month from the end of the month when the directions of the DRP are received by him, even without hearing the Assessee concerned. This is also what we meant in paragraph 25 of our order passed in Writ Petition (L) No.11226 of 2025 decided on 10.10.2025. 26. Therefore, by the clear language of Section 144(C)(13) of the Act, the 1st Respondent ought to have passed the assessment order within a period of one month from t....
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....sment. It is a settled principle of law that where a statute requires something to be done in a particular manner, it has to be done in that manner. The statutory provisions cannot be waived or deviated from. If the argument of the Revenue is accepted, then we will have to ignore the mandatory nature of the provisions of Section 144C(13) while reading the Section. Such a route of interpretation is not permissible. All the words in the statute will have to be read and given a meaning. 31. Therefore, we reject the submission of the Revenue that in case of remand proceedings, the timelines provided by Section 144C(13) are not applicable and the assessment can be completed beyond the time limits provided by the said section. 32. In view thereof, it is clear that the proceedings pending before the 1st Respondent concerning the transfer pricing addition of Rs. 10,54,04,393.00 are barred by limitation and now outside the purview of Section 144(C)(13) of the Act. The 1st Respondents cannot now invoke the provisions of Section 144(C)(13) of the Act and complete the assessment because the time frame mandated by the Section has already expired. It is accordingly so declared. 33. Cons....