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TMI Blog2022 (6) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... with section 144B of the Income Tax Act, 1961 ('Act') is barred by limitation since passed/issued beyond the maximum time limit prescribed under section 144C(13) of the Act and hence is liable to be quashed/annulled as time barred. Henceforth all the grounds below are without prejudice to Ground No. 1 above: 2. Ground No. 2-Addition made by the learned AO of the amount under the head "any other allowable deduction" in Column No. 33 of Schedule BP of the Income Tax Return (TTR') amounting to INR 19,11,08,847: 2.1 On the facts and in the circumstances of the case and in law, while the learned AO has erred in completely ignoring the submission filed by the Appellant during the course of assessment proceedings, the learned DRP grossly erred in not comprehending the facts, submissions and explanations/supporting documents presented by the Appellant to explain the aforesaid claim made in the ITR. A. Notional income on Government Grants amounting to INR 15,30,16,504: 2.2 On the facts and in the circumstances of the case and in law, the learned AO and DRP have erred in not appreciating that out of the disallowance of INR 19,11,08,847, an amount of INR 15,30,16,504 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of INR 46,87,009 pertains to deduction for amount of provision for rent equalisation reversed during the subject year, which was offered to tax by the Appellant in the prior years when such provision was created and hence resulting in double addition. 2.10 On the facts and in the circumstances of the case and in law, the learned DRP has erred in alleging that no details were provided by the Appellant with respect to the earlier years in which the reserve for lease rent equalisation was created, without appreciating that the computation of income of earlier years wherein the lease equalisation reserve was created and added back to the taxable income was duly furnished. 3. Ground No. 3-Addition on account of international transaction pertaining to interest on outstanding receivables amounting to INR 3,60,744 to the returned income of the Appellant. 3.1 The learned AO/TPO/DRP have erred in making an addition of INR 360,744 to the total income of the Appellant due to adjustment in the arm's length price ('ALP') of the international transaction pertaining to interest on outstanding receivables ('impugned transaction'). 3.2 The learned AO/TPO/DRP have e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystems Inc, USA, in India. During the year, the assessee entered into international transactions with Associate enterprises and made aggregate value of international transactions with them of Rs. 1840,59,64,451/- as per Form 3CEB. The total transactions for "Arm's Length Price" have been declared at Rs. 18,40,59,64,451/-. Assessing Officer referred the matter to the Transfer Pricing Officer (TPO). TPO passed an order u/s. 92CA(3) on 14.01.2021 which was received by the AO on 18.02.2021. Pursuant to the draft assessment order passed by the AO, assessee filed objections before the DRP. DRP gave its directions dated 10.01.2022. The said order was subject to giving effect by the TPO and the TPO passed the order pursuant to the directions of the DRP on 18.02.2022. Pursuant to these orders, AO passed the order as under:- Returned Income 234,88,32,480/- Add: Adjustment u/s. 92CA of the I.T. Act 3,60,744 Disallowance of other deduction as per para 7 19,11,08,847 19,14,69,591 Assessed total income 254,03,02,071 4. Against the above order, assessee has filed the appeal before the ITAT. 5. Various g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived. 9. The DRP's direction has to be given effect by the AO. The scheme of Act does not postulate involvement of TPO in the giving effect of the direction of the DRP, hence any verification or giving effect of the DRP's direction by the TPO is not under the scheme of Act which prescribes the time limit. A perusal of the provision of section 144C would clarify the same. Section 144C in its entirety reads as under:- "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 which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,-- (a) 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee. (14A) The provisions of this section shall not apply to any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection subsequent to the DRP's direction cannot in any manner be considered to expand the time limit as prescribed in the Act. Even from this date of TPO's giving effect, the final assessment order is time barred in any case. As already noted by us, Ld. DR's plea that TPO's giving effect to the DRP's direction on 18.02.2022 can be considered as sufficient compliance to the time barring provision contained in section 144C(13) is not legally sustainable. 11. Undoubtedly, in this case, the assessment order has been passed beyond the time limit prescribed u/s. 144C(13) being more than one month after the date of receipt of the directions of the DRP by the AO, as per the information provided in the paper book submitted by the assessee's counsel. The factual veracity of these dates has not been disputed by the Revenue. In this view of the matter, we agree with the contention that the order passed by the AO is void ab initio and liable to be quashed as the final assessment order is time barred. We hold and direct accordingly. 12. In coming to the above conclusion, we draw support from the following case laws to the same effect submitted by the Ld. counsel of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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