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TMI Blog2014 (10) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 144C(8) of the Income Tax Act, 1961. 2. In the light of the above submissions our attention was invited to the following grounds which ventilate the above grievance. The grounds read as under:- 1.2. "That on the facts and circumstances of the case and in law, the "impugned assessment order is bad in law, being a non-speaking order passed in complete disregard of the factual details and submissions filed by the Appellant during the course of the set aside proceedings. 2. Directions issued by the Dispute Resolution Panel ("DRP") are ultravires the provisions f the Act and bad in law. 2.1. That on the facts and circumstances of the case and in law, the directions issued by the DRP are ultra-vires the provisions of section 144C(5) read with section 144C(8) of the Act. 2.2. That on the facts and circumstances of the case and in law, the impugned assessment order is bad in law, to the extent it has been passed in pursuance of directions issued by the DRP which are in violation of the provisions of the Act. 2.1. It was a common stand of the parties that the arguments advanced in ITA No-1570/Del/2014 would also address the grievance in ITA No-1571/Del/2014 as the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Other fee for technical services having business PE or fixed place of profession (Sec. 44DA) iv) Other fee for technical services without business PE or fixed place of profession ( Sec. 115A) 4.2 In pursuance of the above order of the Hon'ble ITAT. the AO has passed the impugned draft appeal effect order u/s 144C read with section 254. In the said order, the AO has held that the assessee did not have a PE in India on the ground that no approval was received by the assessee from RBI for setting up Project Office (PO) in India till end of January, 2008 and also the assessee did not furnish any document suggesting that the activities of seismic survey etc as per contract were carried out from the said PO. The AO has accordingly proposed to bring the amount to tax u/s 115A only. 4.3 During the DRP proceeding. it was argued by the Ld. AR that the AO had had not given adequate opportunity to the assessee before passing the draft appellate order and that it had been brought to the notice of the AO that the assessee had set POs in India for execution of seismic contracts and that the said POs were in operation in India for the duration of the contracts, i.e. 140 days in case of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Dispute Resolution Panel) Rules, 2009. As per Rule 9 of the said Rules, the Panel is specifically empowered to permit the assessee to produce any document to enable it to issue proper directions. In view of the above, the said additional evidence are permitted to be produced by the assessee in the interest of justice. The AO is directed to take into account the submissions and additional evidence filed by the assessee and decide the issue as directed by the Hon'ble ITAT while passing the appeal effect order. In doing so, the AO will provide adequate opportunity of being heard to the assessee. The above grounds of objection are accordingly disposed of." ( emphasis provided by the Bench) 4. Referring to para 4.3.2 of the DRP's order and relying upon IBM India Private Limited vs JCIT (IT(TP)A No.1543/Bang/2012) and Swiber Offshore Construction Pte. Ltd. V. DDIT:ITA No. 7724/Mum/2012 of the order of the Chennai Bench in 140 ITD 171, it was the prayer of the Ld. AR that the issue may be remanded back to the AO with the direction to pass a fresh draft assessment order in accordance with law after providing an opportunity of being heard to the assessee. 4.1. The Ld. CIT DR though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with- (i) the Dispute Resolution Panel; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in subsection (2). (4) The Assessing Officer shall, notwithstanding anything contained in section 153 [or section 153B], pass the assessment order under sub-section (3) within one month from the end of the month in which- (a) the acceptance is received; or (b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:- (a) draft order; (b) objections filed by the assessee; (c) eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee. (14A) [***]........................................................................................................ (15)...................................................................................................................." 5.1. A perusal of the above shows that the provisions of section 144C provides the entire mechanism for making a reference to the DRP; the power of the DRP and also the procedures which have to be followed to issue the direction to the AO are fully set out therein. On a perusal of the statutory provisions it can be seen that (a) where the objections have been filed by the assessee the DRP has to issue directions to the AO for his guidance so as to enable him to complete the assessment; (b) such directions can be given after considering the various factors which have been elaborated in sub-section (6); (c) the DRP has also been conferred with the power to make an enquiry and to issue any directions as per sub-section (7); (d) sub-section (8) places a limitation on the powers of the DRP to either confirm, reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, notwithstanding that such matter was raised or not by the eligible assessee.]" 5.4. The wide sweeping powers vested in the DRP in order to ensure that remand is not made is evident from sub-section (6), (7) and (11) of section 144C extracted hereunder:- "Sub Section (6) of Section 144C (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:- (a) draft order; (b) objections filed by the assessee; (c) evidence furnished by the assessee; (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 (g) result of any enquiry made by, or caused to be made by, it. Sub Section (7) of Section 144C (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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