2024 (8) TMI 568 - HC - Income Tax

Applicability of limitation as prescribed u/s 153 to the proceedings u/s 144C - whether the provisions of Section 153 prescribing time limit for completion of assessment, re-assessment and re-computation apply to the proceedings u/s 144C which provide for cases where a reference may be made to the dispute resolution panel? - HELD THAT - A decision is rendered by a co-ordinate Bench of this Court in Shelf Drilling Ron Tappmeyer Limited 2023 (8) TMI 460 - BOMBAY HIGH COURT wherein a view is taken that the limitation as prescribed where Section 153 applies to the proceedings u/s 144C. Also there is one more decision of M/s. Roca Bathroom Products Private Limited 2022 (6) TMI 848 - MADRAS HIGH COURT taking a similar view. Both these decisions were referred to and relied on behalf of the parties. There was quite a debate at the bar on such decision and what one is permitted to do with it. We were informed that the decision of this Court in Shelf Drilling 2023 (8) TMI 460 - BOMBAY HIGH COURT is assailed by the Revenue before the Supreme Court. As informed that the proceedings not only in Shelf Drilling (supra), but in several other cases arising from orders passed by the different High Courts on the same issue, are pending consideration before the Supreme Court. The orders passed by the Supreme Court issuing notice in such proceedings, are also placed on record. It is on such complexion, the proceedings were argued before us. Having heard learned Counsel for the parties, we reserve appropriate orders to be passed on the present proceedings.

Summary

Issues: Interpretation of Section 144C of the Income Tax Act, 1961 in relation to Section 153

In this judgment, the High Court of Bombay considered the interpretation of Section 144C of the Income Tax Act, 1961, specifically focusing on sub-sections (1), (4), and (13) of Section 144C in connection with the provisions of Section 153 of the Act. The main issue was whether the time limits prescribed under Section 153 for assessment, re-assessment, and re-computation also apply to proceedings under Section 144C, which involve references to the dispute resolution panel. The Court referred to a previous decision by a co-ordinate Bench of the same Court and a decision by the Division Bench of the Madras High Court, both supporting the view that the limitation under Section 153 does apply to proceedings under Section 144C. The judgment in Shelf Drilling Ron Tappmeyer Limited Vs. Assistant Commissioner of Income Tax & Ors. (2023) and The Commissioner of Income Tax & Anr. Vs. M/s. Roca Bathroom Products Private Limited (2022) were cited and debated during the proceedings.

The Court noted that the decision in Shelf Drilling was challenged by the Revenue before the Supreme Court, and the Supreme Court issued a notice in September 2023. The Supreme Court also directed that the judgment in Shelf Drilling should not be cited as a precedent in any other matter until further orders, and its operative portion would only apply to the respondents in that case. The Revenue, represented by Mr. Venkataraman, made detailed submissions arguing for a different interpretation of the provisions of Section 144C, Section 153, and Section 92CA of the Act. He urged the Court to consider a different view from the one taken in Shelf Drilling. The Revenue proposed that if the Court agrees with their contentions, a reference on the question of law should be made to a larger bench for consideration.

The Court was informed that not only the proceedings in Shelf Drilling but also in several other cases from different High Courts were pending before the Supreme Court on the same issue. The arguments presented by both sides were considered, and the Court reserved its decision for further orders. The interim orders previously issued were to remain in effect until the Court passed additional appropriate orders. The judgment highlighted the complexity of the issue and the ongoing debate surrounding the interpretation of the relevant provisions of the Income Tax Act.