AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 910
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....on proceedings under section 263 of the Act merely based en audit objections. 3. erred in passing an order under section 263 of the Act without appreciating that the assessment order sought to be revised was passed pursuant to directions issued by the Hon'ble Dispute Resolution Panel ('DRP') under section 144C of the Act, which is a collegiate body comprising of three Commissioners of Income-tax, being officers of coordinate rank with the revisional authority, and hence outside the scope of revision under section 263 of the Act. 4. erred in not appreciating that the assessment order passed by jurisdictional Assessing Officer ('learned AO') under section 143(3) read with section 144C(13) of the Act was neither erroneous nor prejudicial to the interest of the revenue. 5. erred in initiating revision proceedings under section 263 of the Act despite the fact that the learned AO had conducted an enquiry on the relevant issues, and it is settled law that the power under section 263 of the Act cannot be exercised in cases of inadequate enquiry, but only in cases of complete lack of enquiry. 6. erred in not appreciating that assessmen....
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....rtaining to employee stock option expenses, without pointing an error and based on mere conjunctures and surmises ignoring the factual matrix of the case as well as the nature of the transaction undertaken by Appellant. 16. Erred in alleging underassessment of income of Rs 5,61,54,212 pertaining to cocoa grant received from Mondelez Europe GmbH, without pointing an error and based on mere conjunctures and surmises ignoring the factual matrix of the case as well as the nature of the transaction undertaken by Appellant 17. Erred in alleging underassessment of income of Rs 27,19,35,938 pertaining to unrealized gains on forward contracts accrued during the captioned AY, without pointing an error and based on mere conjunctures and surmises ignoring the factual matrix of the case as well as the nature of the transaction undertaken by Appellant. 18. Erred in alleging underassessment of income of Rs 45,40,10,518 pertaining to unrealized losses on forward contracts disallowed in the preceding AY and claimed in the captioned AY, without pointing an error and based on mere conjunctures and surmises ignoring the factual matrix of the case as well as the nature of the....
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....eal from the said assessment order does not lie with the Id.CIT(A), but lies directly to the ITAT as per provision of section 253(d). Now, the issue to be addressed in this case is whether, the Ld.CIT has erred in initiating proceedings u/s. 263 of the Act, when the original assessment order has been passed us. 143(3) r.w.s. 144C(13), on the basis of the directions of the Dispute Resolution Panel(DRP). 15. We may gainfully refer to the provision of section 263 in this regard. "263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation 1. For the removal of doubts, it is hereby declared that, for the purposes of....
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.... in this case seems to be quiet conscious of this fact as he has mentioned on one of the issues, that AO has not properly followed the direction u's. 144A. But, he is quipe silent and has nowhere mentioned that the final assessment order is passed after the direction of DRP Admittedly, this is not a case, where draft assessment order is being revised. This is a case where final assessment order passed pursuant to the direction of DRP ws. 144(3) is being revised by Ld.CIT. Ld. Counsel of the assessee in this regard submits that from the Finance Act, 2009, memorandum explaining the rationale behind the insertion of section 144C of the Act by the Finance Bill, 2009 as also the CBDT Circular No. 5 of 2010 dated 3 June 2010 issued explaining the said insertion, the notes on clauses, etc., it can be seen that consequential amendments have been made to various provisions of the Act as a result of insertion of section 144C in the act. Such consequential amendments have been made to section 13 1, section 246A and section 253 of the Act. That however, no amendment is made in section 263 of the Act as a consequence of insertion of section 1440 Ef the Act to deem such orders being capable ....
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.... (d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority, (e) records relating to the draft order, (f) evidence collected by, or caused to be collected by, it, and (9) result of any enquiry made by, or caused to be made by, it. (7) The Dispute Resolution Panel may, before issuing any 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 sub-section (5) for further enquiry and passing of the assessment order. [Explanation. For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, n....
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....on(148), by notification in the Official Gazette dired givinity of the provisions of this act shall not apply or shall apply with such exceptions, modifications aald adaptations as may be specified in the notifications. Provided that no direction shall be issued after the 31st day of March, 2022 (14D) Every notification issued under sub-section(148) and sub-section (14C) shall, as soon as may be after the notification issued, be laid before each House of parliament) (15) For the purposes of this section,- (a) "Dispute Resolution Panel" means a collegium comprising of three Commissioners of Income-tax constituted by the Board for this purpose, (b) "eligible assessee" means, (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) any non-resident not being a company, or any foreign company) 18. A reading of the said section brings to the fore following:- The assessee has option to go to the DRP by filing objection before it. As per the provisions of section 144C(5)....
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....regard is placed on the decision of the Apex Court in the case of Supertech Ltd. v Emerald Court Owner Resident Welfare Association [Misc Application No. 1572 of 2021, dated 4-10-2021]. 19. Further, the scheme of the Act itself does not provide any interference in the direction of the DRP as the law containing section 144C(13) directs that the AO shall pass an order inconformity with the directions of the DRP without providing any further opportunity of being heard to the assessee. When the Act itself provide, that order has to be passed by the AO without providing any opportunity to the assessee pursuant to the direction of the DRP, the direction given in this order u/s. 263 by the Ld.CIT to the AO to call for the details of allowability of various deductions claimed by the assessee, in light of the observations discussed by him is quiet contrary to the sanguine provisions of law. Even otherwise, the order passed by the Ld.CIT is an exercise in futility inasmuch as, if the AO proceeds to pass an order by giving the assessee an opportunity of being heard, the same will be against the mandate of section 144C(13). Furthermore, it is also settled law that in assessment u/s. 1....
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....'ble Bombay High court in the case of Virendra Kumar Jhamb v. N.K. Vohra [2009] 176 Taxman 11. In this case, the Jurisdictional High Court held that the assessee had approached the DDIT (investigation) under the Direct tax Amnesty Scheme. The CIT had accepted that the taxable income be computed at 8 percent of the total receipts. A second CIT, on scrutiny and verification of the assesses records, found the decision of the earlier CIT to be fair and justifiable. A subsequent CIT sought to revise the order under section 263, and tax income at 9 percent of the receipts. The Bombay High Court inter alia held that the assessment orders were solely based on the directives of the earlier CITs, and the same could not be revised by the subsequent CIT under section 263. 24. In light of the above discussion and case laws, the case laws referred by the Ld.CIT-DR are not applicable on the facts of the case. As, we have already noted that the submission of Ld.CIT-DR are at variance with the exposition by Hon'ble Bombay High Court in Vodafone India Services (P) Ltd. (supra). The L&CIT-DR in his submission has emphasized that proceeding before DRP is akin to appeal before Lid.CIT(....