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TMI Blog2023 (5) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... 12/2019 even if the benefit of extended period of 12 months is granted on account of a valid reference having been made u/s 92CA of the Act. The Final Assessment Order has been passed in present case on 31/03/2021 and therefore, the same is barred by limitation. Assessee appeal allowed. - ITA No. 940/MUM/2021 - - - Dated:- 27-4-2023 - SHRI B. R. BASKARAN , ACCOUNTANT MEMBER And SHRI RAHUL CHAUDHARY , JUDICIAL MEMBER For the Appellant/Assessee : Shri Madhur Agrawal / Shri Vasishth Dave For the Respondent/Department : Dr. Yogesh Kamat ORDER Per Rahul Chaudhary , Judicial Member : 1. The present appeal is directed against the Assessment Order dated, 31/03/2021, passed under Section 143(3) read with Section 144C(13) read with Sections 143(3A) 143(3B) of the Income Tax Act, 1961 [hereinafter referred to as the Act ], as per directions, dated 23/03/2021, issued by the CIT (Dispute Resolution Panel-1), Mumbai-3 (hereinafter referred to as the DRP ) under Section 144C(5) of the Act pertaining to the Assessment Year 2016-17. 2. When the appeal was taken up for hearing, the Learned Authorised Representative for the Appellant invited our attention to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Authorised Representative for the Appellant also placed reliance on the following the judgments/decisions: - Pfizer Healthcare India Private Ltd Vs. Joint Commissioner of Income Tax: (2021) 433 ITR 28 (Madras) - DCIT vs. Saint Gobain India Pvt. Ltd.: 444 ITR 636 (Madras) - Atos India Private Limited Vs. DCIT [ITA No. 1795/Mum/2017, dated 23/02/2023, Assessment Year 2012-13], - Mondelez India Foods Pvt. Ltd. vs. Addl. CIT [ITA No. 1492/Mum/2015, dated 14/11/2022]. - M/s Teleperformance Global Services Private Limited vs. Additional/Joint/Deputy/ Assistant/Income Tax Officer, Delhi and Deputy Commissioner of Income Tax, Mumbai [ITA No. 1180/Mum/2021, dated 24/03/2023] On the strength of the aforesaid judgments/decisions, the Ld. Authorised Representative for the Appellant submitted that the order, dated 01/11/2019 passed by the TPO as well as the Final Assessment Order, dated 31/03/2021, passed by the Assessing Officer should be quashed as being null void, and barred by limitation. 3. Per Contra Learned Departmental Representative submitted that the Revenue has not accepted the judgment of the Hon ble Madras High Court in the case of Pfizer Healthcare I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber or excluding it. Section 153 states that no order of assessment shall be made at any time after the expiry of 21 months from the end of the assessment year in which the income was first assessable. The submission of the revenue is to the effect that limitation expires only on 12 am of 1-1-2020. However, this would mean that an order of assessment can be passed at 12 am on 1-1-2020, whereas, in my view, such an order would be held to be barred by limitation as proceedings for assessment should be completed before 11.59.59 of 31-12-2019. The period of 21 months therefore, expires on 31-12-2019 that must stand excluded since section 92CA(3A) states 'before 60 days prior to the date on which the period of limitation referred to section 153 expires'. Excluding 31-12-2019, the period of 60 days would expire on 1-11-2019 and the transfer pricing orders thus ought to have been passed on 31-10-2019 or any date prior thereto. Incidentally, the Board, in the Central Action Plan also indicates the date by which the Transfer Pricing orders are to be passed as 31-10-2019. The impugned orders are thus, held to be barred by limitation . (Emphasis Supplied) 5. The above judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. As per section 92CA(3A), the order has to be passed before the expiry of 60 days prior to the date on which the period of limitation under section 153 expires. As per 92CA(4), the assessing officer has to pass an order in conformity with the order of the TPO. After receipt of the order from the TPO determining ALP, the assessing officer is to forward a draft assessment order to the assessee, who has an option either to file his acceptance of the variation of the assessment or file his objection to any such variation with the Dispute Resolution Panel and also the Assessing Officer. Sub-section (5) of section 144C of the Act provides that if any objections are raised by the assessee before the Dispute Resolution Panel, the Panel is empowered to issue such direction as it thinks fit for the guidance of the Assessing Officer after considering various details provided in Clauses (A) to (G) thereof. Sub-section (13) of section 144C of the Act provides that upon receipt of directions issued under sub-section (5) of section 144C of the Act, the Assessing Officer shall in conformity with the directions complete the assessment proceedings. It goes without saying that if no objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the scheme of the Act, we are of the opinion that the word may used therein has to be construed as shall and the time period fixed therein has to be scrupulously followed. The word may is used there to imply that an order can be passed any day before 60 days and it is not that the order must be made on the day before the 60th day. The impact of the proviso to the subsection clarifies the mandatory nature of the time schedule. The word may cannot be interpreted to say that the legislature never wanted the authority to pass an order within 60 days and it gave a discretion. Therefore, the learned Judge rightly held the orders impugned in the writ petitions as barred by limitation, as the Board, in the Central Action Plan, has specified 31-10-2019 as the date on which orders are to be passed by the TPO, reiterating the time limit to be mandatory. (Emphasis Supplied) 6. Keeping in view the facts of the present case, the time limit for passing order under Section computed 92CA(3) of the Act per the above judgments of the Hon ble Madras High Court can be computed as under: S. No. Particulars Relevant date/period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (3) of section 92CA; and (ii) any non-resident not being a company, or any foreign company A perusal of the above definition would show that eligible assessee mean any person in whose case variation arises as a consequence of the order of the TPO passed u/s. 92CA(3) of the Act. The order has to be a valid order. In the instant case since, the order of TPO was beyond the period of limitation it is not a valid order. Therefore, there is no eligible assessee in terms of the definition provided in sub-section (15) to section 144C of the Act. If there is no eligible assessee, no reference to DRP could have been made. Once the substratum for making the assessment under transfer pricing mechanism erodes the subsequent proceedings emanating from flawed foundation is without jurisdiction. 10. Further in the case of Atos India Pvt. Ltd. (supra) it has been held by the Tribunal as under: 42. Thus, despite the fact that the reference made to the Ld. TPO is valid, in absence of a legally valid transfer pricing order and a valid draft assessment order, the Ld. AO cannot assume jurisdiction to proceed with the assessment under Section 144C of the Act and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final assessment order would end on 31.12.2009, even considering the extension by twelve months. In the present case, the order of the DRP itself is only 24.09.2010 much beyond the permissible period. 46. Thus taking into the provisions of law and the judgment referred to above, we hold that the final assessment order passed on 31 January 2017 is beyond the prescribed period of limitation under section 153 of the Act expiring on 31 March 2016, thus, barred by limitation and is hereby quashed. (Emphasis Supplied) 11. In the present case we have already held in paragraph 7 above that the order, dated 01/11/2019 passed by TPO under Section 92CA(3) of the Act is barred by limitation. The Appellant, therefore, does not qualify as an Eligible Assessee under Section 144C(15)(b)(i) of the Act. The Assessing Officer did not have jurisdiction to pass the Draft Assessment Order, dated 24/12/2019 under Section 144C(1) of the Act. As a result, the time limit available to the Assessing Officer under Section 153 of the Act for passing the assessment order expired on 31/12/2019 even if the benefit of extended period of 12 months is granted on account of a valid reference having bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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