2021 (9) TMI 1480 - HC - Income Tax

Validity of order passed u/s 92-CA(3) - Computation of limitation - HELD THAT - Writ Court noting that as against the draft assessment order, the assessee has approached the Dispute Resolution Panel (DRP), the writ petitions were disposed of by permitting the respondents/writ petitioner to pursue the statutory remedy as opted by it and accordingly, the writ petition was closed. In such circumstances, the Appellant cannot be aggrieved over the said order, and the Learned Writ Court did not apply the conclusion arrived at, by which in so far as the writ petition filed by the respondent herein. With the observation, that the writ petition is unnecessary. Since the writ petition filed by the respondent writ petitioner in W.P. No. 35420 of 2019 was not disposed of on merits along with the other cases but has been closed as the respondent had availed the alternate remedy before the DRP. Appellant submitted that the ratio laid down by the Learned Writ Court would not apply to the respondent-writ petitioner. This issue is obvious, because, the writ petition filed by the respondent-writ petitioner was not adjudicated on merits and was closed, as the respondent chose to avail the alternate remedy provided under the Act by approaching the DRP. It is made clear that the respondent-writ petitioner would be entitled to canvass all legal and factual issues before the Income Tax Appellate Tribunal, before which the appeal is now pending, including the point relating to limitation. Accordingly, the writ appeal is disposed of.

Summary

Issues:
Computation of limitation under Section 92-CA(3) of the Income Tax Act, 1961.

Detailed Analysis:

Issue 1: Computation of Limitation
The writ appeal involved a dispute regarding the computation of limitation under Section 92-CA(3) of the Income Tax Act, 1961. The Appellants challenged the order contending that it was barred by limitation. The Learned Writ Court, in a batch of cases, considered the matter where the assessee had challenged the order passed under the said section. The court noted that the assessee had approached the Dispute Resolution Panel (DRP) against the draft assessment order. The court permitted the respondent/writ petitioner to pursue the statutory remedy opted by them, resulting in the closure of the writ petition without a decision on merits.

Issue 2: Applicability of Conclusion
The Appellants raised concerns over the order, arguing that the conclusion reached by the Learned Writ Court did not apply to the respondent-writ petitioner. This was due to the fact that the writ petition filed by the respondent was closed as they chose to avail the alternate remedy by approaching the DRP. The court clarified that the respondent would have the opportunity to address all legal and factual issues before the Income Tax Appellate Tribunal, including the matter of limitation.

Conclusion
The writ appeal was disposed of with no costs, and the connected Miscellaneous Petitions were closed. The judgment emphasized the importance of availing statutory remedies provided under the Income Tax Act and highlighted the right of the respondent to present their case before the Appellate Tribunal. The decision provided clarity on the application of limitation in such cases and the significance of pursuing appropriate legal avenues for dispute resolution in tax matters.