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TMI Blog2019 (8) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the assessee with YCJ. A copy of such a Resolution dated 10-09-2015 has been placed on record. It states the amount of total transfer pricing adjustment as per the rectification order dated 21-03-2013 at ₹ 16.43 crore, having transfer pricing adjustment relating to YCJ at ₹ 9,85,89,000/- and the remaining amount of ₹ 6,57,81,925/- on account of transactions with non-YCJ AEs. As per the Resolution, the amount of transfer pricing adjustment corresponding to transactions with YCJ has been reduced to ₹ 5,78,23,800/-, thereby giving relief of ₹ 4.07 crore and odd. Such a Resolution has been admittedly accepted by the assessee. Having accepted the MAP order, the assessee cannot agitate such an issue in the appellate proceedings. In the extant case, the assessee admittedly accepted the Resolution under the MAP. Once the assessee has accepted such a Resolution as per which the amount of transfer pricing adjustment, corresponding to transactions with YCJ, has been restricted to ₹ 5,78,23,800/-, the assessee now cannot resile from such Resolution and is bound by the same. AR fairly admitted that the Resolution has been accepted by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 3. Having gone through the subject matter of the additional grounds taken by the assessee, it is discernible that the same are legal grounds involving adjudication on questions of law. The Hon ble Supreme Court in National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC) has observed that the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a nontaxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item . Answering the question posed before it in affirmative, their Lordships held that on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee and the Tribunal has jurisdiction to examine the same. We find that the additional grounds rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such - filing objections before the DRP. He further submitted that although the notice of demand was issued pursuant to such a draft order, but the same was never enforced and further though penalty proceedings were initiated through this draft order, but no penalty order was actually passed. He still further submitted that if the assessee was aggrieved by the nomenclature of draft order, then it should not have agitated the matter before the DRP or should have challenged it by means of a writ petition, which it did not. Crux of his argument was that a draft order was simply wrongly described as an `Assessment order , which did not prejudice the assessee in any manner. 6. We have heard both the sides and gone through the relevant material on record. Section 144C of the Act has caption Reference to Dispute Resolution Panel . Sub-section (1) of section 144C provides that: 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 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the TPO, passed a final assessment order instead of a draft order. A question arose as to whether the order so passed could be treated as a valid order. Accepting the contention of the assessee, the Hon ble High Court set aside the order passed by the AO by observing that: where there was omission on the part of the AO to follow the mandatory procedures prescribed in the Act, such omission cannot be termed as a mere procedural irregularity and it cannot be cured . Thus the assessment order was quashed. Almost similar issue came up for consideration before the Hon ble jurisdictional High Court in Pr. CIT Vs. Lionbridge Technologies Pvt. Lt. (2019) 260 taxmann 273 (Bom.) in which the Tribunal in the first round restored the matter to the AO on the ground that the DRP failed to deal with the assessee s objections. During such remand proceedings, reference was made to the TPO. On receipt of the TPO s order, the AO straightaway passed an order u/s.143(3) r.w.s. 144C(13). On realizing the mistake, the AO issued a corrigendum to such an assessment with a view to treat it as a draft assessment order and not a final assessment order. Matter finally travelled to the Hon ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lized his mistake and went on to pass another `Assessment order on 29.11.2012, this time u/s 144C(13) of the Act. Consequently, it is palpable that the AO kept on passing one final assessment order [u/s 144C(3)] after another final assessment order [u/s 144C(13)]. On going through the entire exercise of assessment, it can be seen that so many statutorily mandated procedural lapses have occurred at the end of the AO, which have the effect of vitiating the impugned assessment order. 11. The ld. DR tried to distinguish the decision in the case of Vijay Television (supra) by arguing that firstly, it was a decision in a writ petition and hence does not have a binding effect in other cases and secondly, no draft order was passed in that case. In our considered opinion these contentions are sans merit. Even if a decision is rendered in a writ petition, it does not cease to be operative in other cases to the extent of ratio decidendi laid down therein. The next distinction drawn by the ld. DR was that the decision to quash the final assessment order came in the absence of the AO passing a draft order, which was not a case in the extant appeal. We have noted above that no dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer pricing adjustment corresponding to transactions with YCJ has been reduced to ₹ 5,78,23,800/-, thereby giving relief of ₹ 4.07 crore and odd. Such a Resolution has been admittedly accepted by the assessee. 13. Now we need to see the effect of MAP proceedings vis- -vis the quashing of the assessment order on the legal issue as discussed hereinabove. Normally, if an assessment order is quashed, all the additions made in the order stand deleted and the returned income becomes the finally determined total income. However, position is little different, when the assessee has accepted a MAP resolution as per which some amount of addition has been held to be sustainable, which has been accepted by the assessee. 14. Section 295 of the Act empowers the CBDT to make rules for the purposes of the Act. Sub-section (2) lists certain matters in respect of which the Board may provide for rules. Clause (h) of section 295(2) empowers the Board to make rules providing for: `the procedure for giving effect to the terms of any agreement for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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