2021 (9) TMI 1460 - AT - Income Tax

DRP power to condone the delay in filing objections by the assessee before the Panel - AR admitted that there was a delay in filing the objections before the DRP by 3 days (the assessee has to file objections before the DRP u/s 144C(2)(b) within 30 days from the date of receipt of draft assessment order) - HELD THAT - DRP derives its authorities and powers from the provisions of section 144C and its procedures are governed by Income Tax (Dispute Resolution Panel) Rules, 2009. The provisions of the Act or Rule do not give power to the DRP to condone any delay in filing the objections by the assessee before the Panel. If the Legislature had intended to give such powers, it had been expressly implied as in the case of powers with the CIT(A) u/s 249(3) of the I.T.Act and ITAT u/s 253(5) of the I.T.Act. Therefore, we are of the view that the DRP does not have powers to condone the delay of filing objections by the assessee before the Panel. See INNO ESTATES PRIVATE LIMITED 2018 (9) TMI 222 - MADRAS HIGH COURT - we hold that the DRP has no power to condone the delay in filing objections by the assessee before the Panel. ITAT power to hold that the assessment order is barred by limitation - In this case, the final assessment order dated 30.09.2016 was not pursuant to the direction of DRP. Therefore, the correct course open for the assessee would have been to file an appeal before the CIT(A) and pursue the said issue. The Hon ble Madras High Court in the case of Inno Estates (P.) Ltd 2018 (9) TMI 222 - MADRAS HIGH COURT had also decided the above issue indirectly. In the case considered by the Hon ble High Court, the Advocate for the assessee submitted that the appeal would lie to the ITAT u/s 253(1)(d) of the I.T.Act and not before the CIT(A) u/s 246(1)(a) of the I.T.Act. This contention of the Advocate was rejected by the Hon ble Madras High Court. The Hon ble Madras High Court directed the assessee to file an appeal to the CIT(A) instead of ITAT The plea of the assessee that the assessment order is barred by limitation, is not entertained on account of the reason that ITAT does not have jurisdiction for the same. Tribunal in the case of Yokogawa India Ltd. 2021 (4) TMI 151 - ITAT BANGALORE relied by the assessee will not have application, since the ITAT has not considered the judgment of Hon ble Madras High Court, cited supra. As regards the DR s reliance on the ITAT order in the case of Himalaya Drug Co. v. DCIT (supra), we are not taking note of the same, since we have no jurisdiction to consider the plea of limitation on facts of this case. It is ordered accordingly. Appeal filed by the assessee is dismissed.

Summary

Issues Involved:
1. Whether the Dispute Resolution Panel (DRP) has the power to condone the delay in filing objections by the assessee.
2. Whether the ITAT can hold the final assessment order as barred by limitation.

Issue 1: DRP's Power to Condone Delay in Filing Objections:
The assessee raised two-fold issues in additional grounds, challenging the DRP's dismissal of objections due to a 3-day delay in filing. The ITAT analyzed if the DRP has authority to condone such delays. It was established that the DRP derives its powers from the IT Act and its rules, which do not explicitly grant the DRP the power to condone filing delays. Relying on a judgment by the Hon'ble Madras High Court, the ITAT concluded that the DRP lacks the authority to condone delays in filing objections, as explicitly stated in the ruling.

Issue 2: ITAT's Jurisdiction on Limitation of Assessment Order:
The second issue revolved around whether the ITAT can determine if the assessment order is time-barred. The ITAT clarified that since the DRP did not provide any directions on merits but rejected objections based on time limitations, the ITAT's jurisdiction was limited. Referring to a case before the Hon'ble Madras High Court, it was established that in such cases, the correct course for the assessee would be to appeal before the CIT(A) rather than the ITAT. The ITAT emphasized that it lacked jurisdiction to entertain the plea of limitation, citing the judgment of the Hon'ble Madras High Court. Consequently, the ITAT dismissed the appeal filed by the assessee, as it did not have the jurisdiction to consider the plea of limitation in this case.

In conclusion, the ITAT's judgment addressed the issues of the DRP's power to condone delays in filing objections and the ITAT's jurisdiction regarding the limitation of the assessment order. The ruling clarified the legal boundaries and upheld the decisions based on the provisions of the IT Act and relevant case laws, ultimately dismissing the appeal filed by the assessee.