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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 ..... DRP is in excess of jurisdiction and the challenge posed to the same by the assessee is well founded - the AO is directed to pass a speaking draft assessment order considering the fresh evidences admitted by the DRP and calling for whatever evidences the authority deems fit – the order of the DRP is set aside – Decided partly in favor assessee. - I.T.A. Nos. 1570 & 1571/Del/2014 Alongwith SA. No. 201 & 202/Del/2014 - - - Dated:- 26-9-2014 - Smt. Diva Singh And Sh. J. S. Reddy,JJ. For the Appellant : Sh. Ajay Vohra, Adv. Sh. Rohit Garg, Adv. For the Respondent : Sh. Sanjeev Sharma Sh. Vivek Kumar, Sr. DR ORDER Per Diva Singh, JM The present appeals have been filed by the assessee against the separate orders dated 30.01.2014 passed by the AO u/s 144C(13)/ 143(3) read with section 254 of the Income Tax Act, 1961 pertaining to 2008-09 and 2010-11 assessment years pursuant to the directions of the DRP-II, New Delhi dated 24.12.2013 and 26.12.2013 respectively. The Ld. AR right at the outset submitted that the sole grievance in the present appeals which the assessee would want to address is the action of the DRP in remanding the issue to the AO instead o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) read with section 115A of the Act. Against this draft assessment order, the assessee is found to have filed Objections before the DRP however the DRP, confirmed the action of the AO. The AO, thereafter, passed the final assessment order. Against this order the assessee filed appeal before the ITAT. A perusal of the order of the DRP shows that the Co-ordinate Bench vide their order dated 20.04.2012 remitted the issue back to the file of the AO with the following directions:- i) Determine whether assessee has a PE or not; and ii) Thereafter determine the taxable income of the assessee in accordance with the law by taking into consideration the order of ITAT also in the case of CGG Verotas Services SA. 3.1. The DRP order sums up the order of the Co-ordinate Bench further and after addressing the facts comes to the following conclusions:- Hon. ITAT further held that after examining the existence of PE, income has to be determined on the basis of following four categories: i) Fees for Technical Services rendered in connection with prospecting for or extraction or production of mineral oil having business PE or fixed place of profession [Sec. 44DA) ii) Fees for Techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation is required to be filed with the RBI in relation to setting up of PO. It is submitted that the above intimation is a conclusive proof of having set up PO in India. 4.3.1 Further, the assessee also filed additional evidence vide letter dated 29.10.2013 filed on 08.11.2013 before the DRP enclosing copy of 'Certificate for Establishment of Place of Business in India issued by ROC on 11.12.2007 and other documents in support of its claim. The above additional evidence was forwarded to the AO vide letter dated 11.11.2013 by the DRP with direction to examine the matter and submit remand report. However, the AO in his report dated 14.11.2013 has merely repeated his old stand with regard to taxability u/s 115A and has stated that the additional evidence is not admissible under Rule 46A of the Income Tax Rules, 1962. In response to the above remand report it is submitted by the Ld. AR vide letter dated 17.12.2013 that there was no additional evidence per se and that the ROC Certificate and other documents were filed only to further establish its earlier claim regarding existence of PO in India and carrying out of the seismic service etc from the said PO. 4.3.2 On careful co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the seismic service etc from the said PO. In view of the above, the said additional evidence are permitted to be produced by the assessee in the interest of justice under rule 9 of the Income Tax (Dispute Resolution Panel) Rules, 2009. The assessee will file copy of the above additional evidence before the AO who is directed to examine the same after providing adequate opportunity of being heard to the assessee. 5. In the afore-mentioned peculiar facts and circumstances on considering the material available on record, the provisions of law and the judicial precedents cited, we are of the view that the prayer on behalf of the assessee has to be accepted. Before we address the specific reason for coming to the said conclusion we first deem it appropriate to extract the relevant provisions under consideration:- 144C. (1)The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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.] (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 [or sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation within which the direction under sub-section (5) is to be given effect to by the AO; (i) sub-section (13) mandates the AO to pass an order in conformity with the direction of the DRP without providing an opportunity to the assessee. 5.2. Accordingly it is seen that the statute has provided sufficient powers to the DRP for considering all the material placed before it and equipped it with vast powers to conduct enquiry before issuing any direction to the AO. The statute contemplates that after empowering the DRP, with such wide powers the DRP shall give clear and speaking directions to the AO for passing the assessment order and the statute ensures that the said power is not delegated to the AO. 5.3. The above conclusion is evident from a bare perusal of sub-sections (5) and (8) of section 144C extracted hereunder:- Sub Section (5) of Section 144C (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. Sub Section (8) of Section 144C (8) The Dispute Resolution Panel may confirm, red ..... X X X X Extracts X X X X X X X X Extracts X X X X
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