2025 (2) TMI 773 - HC - Income Tax

Validity of Order passed u/s 92CD(3) - Whether an Appeal under Section 246A(bb) is the appropriate remedy for the Petitioner? - HELD THAT - What the Petitioner refers to as a letter dated 31st March 2024 (Exh. Q to the Petition) is not a letter but an Order passed under Section 92CD(3). Against the said Order an Appeal is provided under Section 246A(bb) of the Act. Section 246A(bb) of the Act clearly provides for an Appeal to the Commissioner (Appeals) against the Order made under sub-section (3) of Section 92CD of the Act. 21. In these circumstances since the efficacious alternate remedy of an Appeal is available to the Petitioner under Section 246A (bb) of the Act we are not inclined to entertain this Petition and we are inclined to relegate the Petition to the alternate remedy of an Appeal. It has been pointed out to us that subsequent to the filing of this Petition an Order has been passed under Section 154 r/w Section 92CD of the Act. The said Order shows that even as per the Revenue a sum of Rs. 23, 77, 74, 400/- is refundable to the Petitioner. Even though we are dismissing this Petition on the ground of an alternate remedy available to the Petitioner we are of the view that this admitted amount of Rs. 23, 77, 74, 400/- should be paid to the Petitioner along with interest. The Petitioner is at liberty to file an Appeal under Section 246A (bb).) Respondents are directed to refund to the Petitioner an amount as per the Order passed under Section 154 r/w Section 92CD of the Act along with applicable interest until the date of payment.

Summary

The issues presented and considered in this legal judgment are as follows:1. Whether the letter dated 31st March, 2024, issued by Respondent No.1 titled "Order Giving Effect to Advance Pricing Agreement" for Assessment Year 2017-18 should be quashed.2. Whether Respondent No.1 should be directed to issue a refund for Assessment Year 2017-18 in accordance with the modified return of income.3. Whether the said letter dated 31st March, 2024, is barred by limitation.4. Whether an Appeal under Section 246A(bb) of the Act is the appropriate remedy for the Petitioner.The detailed analysis of the identified issues is as follows:Relevant legal framework and precedents:- The assessment proceedings were conducted under Sections 144B, 144C, 92CA, 92CD, and other relevant provisions of the Income Tax Act, 1961.- The Advance Pricing Agreement (APA) and the directions of the Dispute Resolution Panel (DRP) were crucial in this case.- The judgment in Vodafone India Services (P) Ltd. v/s. Union of India [2013] 39 taxmann.com 201 was relied upon by the Petitioner.Court's interpretation and reasoning:- The Court noted that the letter dated 31st March, 2024, was actually an Order passed under Section 92CD(3) of the Act.- The Court highlighted that an Appeal under Section 246A(bb) of the Act was the appropriate remedy against such an Order.- The Court acknowledged that a subsequent Order under Section 154 r/w Section 92CD of the Act indicated a refundable amount of Rs. 23,77,74,400 to the Petitioner.Key evidence and findings:- The Petitioner had filed objections with the DRP and entered into an APA with the Central Board of Direct Taxes.- The DRP directed the AO and the TPO to give effect to the APA for Assessment Year 2017-18.- The Petitioner filed a modified return of income in accordance with the APA and requested withdrawal of transfer pricing grounds of objections.Application of law to facts:- The Court determined that the Order dated 31st March, 2024, should be challenged through an Appeal under Section 246A(bb) of the Act.- Despite dismissing the Petition due to the availability of an alternate remedy, the Court ordered the refund of Rs. 23,77,74,400 to the Petitioner.Treatment of competing arguments:- The Petitioner argued that the letter dated 31st March, 2024, was barred by limitation, while the Respondents contended that it was a valid Order under Section 92CD(3) of the Act.- The Court balanced the arguments by recognizing the availability of an Appeal for the Petitioner while also acknowledging the refundable amount determined by a subsequent Order.Significant holdings:- The Court dismissed the Writ Petition, directing the Petitioner to file an Appeal under Section 246A(bb) of the Act against the Order dated 31st March, 2024.- The Respondents were directed to refund Rs. 23,77,74,400 to the Petitioner as per the subsequent Order under Section 154 r/w Section 92CD of the Act.- No costs were awarded in the case.In conclusion, the Court's decision emphasized the importance of following the prescribed legal procedures and utilizing the appropriate remedies available under the law. The judgment highlighted the significance of adhering to statutory provisions and seeking redress through the established legal mechanisms.