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TMI Blog2023 (8) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... wait to be reminded like in this case and still take almost two years to start the process. Sub-Section (13) of Section 144C provides that an assessment officer shall, upon receipt of the directions, issued under Sub-Section (5), in conformity with the directions complete, notwithstanding anything to the contrary contained in Section 153, 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. What is contemplated u/s 144C (13) is the passing of the final assessment order. Twelve months as provided u/s 153(3) would start from the end of the financial year in which the Principal Commissioner received the order u/s 254 from the ITAT. The assessing officer should have taken steps to pass the final order under Sub-Section (13) of Section 144C within 12 months period. The exclusion of applicability of Section 153, in so far as non-obstante clause in Sub-Section (13) of Section 144C is concerned, it is for limited purpose to ensure that dehors larger time available, an order based on the directions of the DRP has to be passed within 30 days from the end of the receipt of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gas Corporation (ONGC) and Transocean Drilling Services (India) Pvt. Ltd. The said rig was on a bareboat charter basis. The arrangement continued upto July 2013 and from August 2013 to November 2013, the said rig was used under a nomination contract for providing drilling services to ONGC. From December 2013 to March 2014, the said rig required and underwent major repairs and refurbishment at the Pipavav Defence and Offshore Engineering Company Limited. After the repairs and refurbishment, the said rig was deployed for performing drilling services for ONGC upto May 2017. The agreement with ONGC was entered into by Shelf Drilling Offshore Services (India) Pvt. Ltd. (SDOSIPL) which sub-contracted the job work to Petitioner. During this period, Petitioner has computed its income on presumptive basis under Section 44BB of the Income-tax Act, 1961 ( the Act ) for Assessment Year 2013-14 and from Assessment Years 201516 till date. For Assessment year 2014-15, i.e., the year under consideration, after fulfilling the requisite conditions in Section 44BB(3) of the Act, Petitioner exercised the option available to it to compute its income other than on presumptive basis under Section 44BB. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by oral requests. On 22nd February 2021, over one year later, Petitioner was called upon by Respondent no. 1 to produce the details of contracts entered into by it and the reasons for incurring a loss during assessment year 2014-15. Petitioner provided all documents and details called for. By a notice dated 10th September 2021 issued by Respondent no. 1 under Section 142(1) of the Act, Petitioner was directed to furnish details of month-wise operational expenses and income. Petitioner responded vide letter dated 16th September 2021. Petitioner was again called upon to provide documents and details which Petitioner provided. Repeated notices were issued under Section 142(1) of the Act to Petitioner and finally Petitioner was issued a show cause notice dated 23th September 2021 which Petitioner received at 9.42 a.m. allowing time upto 3.30 p.m. on 24th September 2021 to respond. Various allegations were made against Petitioner including non-submission of documentary evidence to show the state of the rig at the time of purchase, genuineness of the cost of acquisition etc. Various other allegations including not following accounting standard-29 or non-provision of TDS details were al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. It is an admitted position that Petitioner qualifies for computation of its income on the basis of Section 44BB of the Act. For the year under consideration, i.e., assessment year 2014-15, it has opted out of the said provision and has fulfilled the conditions as required under Sub-Section (3) thereof. In the first round of proceedings, the then Respondent No. 1, referring to various aspects in the assessment order rejected Petitioner s books of account by invoking the provisions of Section 145 of the Act. He has thereafter estimated Petitioner s income by effectively following the computation methodology in Section 44BB(1) of the Act. In this regard, Petitioner had filed additional evidence before the DRP and also dealt with each and every aspect put against it by Respondent No. 1 in draft assessment order. However, the DRP upheld the conclusion reached by Respondent No. 1. On further appeal to the ITAT, it discussed each and every aspect raised by Respondent No. 1 and on several of such issues specifically held that the view taken by Respondent No. 1 and upheld by the DRP was erroneous and unsustainable in law. The ITAT finally held that (a) Petitioner had prepared its books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the said limitation, i.e., by 30th September 2021. Division Bench of the Hon ble Madras High Court has upheld this position in the case of Commissioner of Income-tax v. Roca Bathroom Products (P) Ltd. (2022) 140 taxmann.com 304 (Madras) [Roca Bathroom (DB)]. The Division Bench had confirmed the law laid down by a learned single Judge of Madras High Court in Roca Bathroom Products (P) Ltd. vs. Dispute Resolution Panel-2, Bangalore (2021) 127 taxmann.com 332 (Madars) [Roca Bathroom (SB)] (b) In the present case, date of ITAT s order was 4th October 2019 when it was remanded to the Assessing Officer for denovo consideration. The due date as per Section 153(3) read with proviso thereto provided that the limitation to pass fresh order pursuant to the order of ITAT would expire on 31st March 2021, i.e., 12 months from the end of the financial year in which the order was received by the specified authority. In view of the Notification no. 10/2021 dated 27th February 2021 issued by the Central Board of Direct Taxes in the exercise of the powers conferred by Sub-Section (1) of Section 3 of the Relaxation Act and in partial modification of the earlier Notification, the time to pass the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and High Courts have reiterated this position. 15. The provision of Section 144C of the act with a non-obstante clause was inserted later than the incorporation of the non-obstante clause in Section 153 of the Act. Thus the Legislature was aware of the non-obstante clause in Section 153 of the Act when the similar non-obstante clause was inserted in Section 144C of the Act. The later non-obstante clause shall prevail over the already existing one. Mr. Suresh Kumar did not elaborate though. 16. Section 153 of the Act is a general provision dealing with all assessees and all types of orders as compared to Section 144C of the Act which deals only with regard to matters pertaining to eligible assessees and orders are passed wherein assessee has choice to file objections before the DRP. Long established jurisprudence holds, for matters covered by special provisions, the overlapping general provisions must yield ground to the special provisions. Again this was not elaborated. 17. It was further submitted by Mr. Suresh Kumar that one of the ramifications of the interpretation put by the Hon'ble Madras High Court in Roca Bathroom (DB)(Supra) that the time limit under Section 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 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. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5), (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words twenty-one months , the words eighteen months had been substituted: [Provided further that in respect of an order of assessment relating to the assessment year commencing on (i) the 1st day of April, 2019, the provisions of this subsection shall have effect, as if for the words twenty-one months , the words twelve months had been substituted; (ii) the 1st day of April, 2020, the provisions of this subsection shall have effect, as if for the words twenty-one months , the words eighteen months had been substituted:] [Provided also that in respect of an order of assessment relating to the assessment year commencing on [***] the 1st day of April, 2021, the provisions of this subsection shall have effect, as if for the words twenty-one months , the words nine months had been substituted:] [Provided also that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2022, the provisions of this sub-section shall have effect, as if for the words tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment or reassessment, as the case may be, under the said sub-sections shall, (a) in a case where such search is initiated under section 132 or such requisition is made under section 132A; (b) in the case of an assessee, to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; (c) in the case of an assessee, to whom any books of account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to, be extended by twelve months.] (4) Notwithstanding anything contained in [sub-sections (1), (1A), (2), (3) and (3A)], where a reference under sub-section (1) of section 92CA is made during the course of the proceeding for the assessment or reassessment, the period available for completion of assessment or reassessment, as the case may be, under the said [sub-sections (1), (1A), (2), (3) and (3A)], shall be extended by twelve months. (5) Where effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 is to be given by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] wholly or partly, otherwise than by making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order under section 250, section 254, section 260, section 262, section 263, or section 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, on or before the expiry of twelve months from the end of the month in which such order is received or passed by the [Principal Chief Commissioner or Chief Commissioner or] Principal Commissioner or Commissioner, as the case may be; or (ii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147, on or before the expiry of twelve months from the end of the month in which the assessment order in the case of the firm is passed. (7) Where effect to any order, finding or direction referred to in sub-section (5) or sub-section (6) is to be given by the Assessing Officer, within the time specified in the said subsections, and such order has been received or passed, as the case may be, by the income-tax authority specified therein before the 1st day of June, 2016, the Assessing Officer shall give effect to such order, finding or direction, or assess, reassess or recompute the income of the assessee, on or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under that sub-section; or (b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or (v) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer; or (vi) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him; or (vii) in a case where an application made before the Income-tax Settlement Commission is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or (viii) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencing from the date on which the Assessing Officer makes a reference to the Principal Commissioner or Commissioner under the second proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order under clause (ii) or clause (iii) of the fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of sub-section (4) of section 12AB, as the case may be, is received by the Assessing Officer,] shall be excluded: Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in subsections (1), [(1A),] (2), (3) and sub-section (8) available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: Provided further that where the period available to the Transfer Pricing Officer is extended to sixty days in accordance with the proviso to sub-section (3A) of section 92CA and the period of limitation available to the Assessing Officer for making an order of assessment, reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion contained in the said order, if such other person was given an opportunity of being heard before the said order was passed. MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 27th February, 2021 S.O. 966(E). In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020 (hereinafter referred to as the said notification), the Central Government hereby specifies, for the purpose of sub-section (1) of section 3 of the said Act, that, (A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and the completion of any action, as referred to in clause (a) of subsection (1) of section 3 of the said Act, relates to pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer. Sub-Section (11) provides for an opportunity of hearing to the assessee prior to issuance of the directions. For disposal of the objections received, Sub-Section (12) sets out a limitation of nine (9) months from the end of the month in which the draft order is forwarded to the eligible assessee. In passing a final assessment order, Sub-Section (13) specifically excludes the provisions of Section 153 stating that the Assessing Officer shall pass a final order of assessment even without hearing the assessee, in conformity with the directions issued by the DRP within one month from the end of the month when such directions were received by him. However, in our view, the exclusion of Section 153/153B is specific to, and kicks in only at the stage of passing of final assessment order after directions are received from the DRP, and not at any other stage of the proceedings under Section 144C and hence, the entire proceedings would have to be concluded within the time limits prescribed. Sub-Sections (14) and (15) are not relevant for the purpose of this Writ Petition. 21. Under Section 153(1) of the Act, the assessment has to be completed with 21 months since the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated. Section 144C envisions a special assessment, one which includes the determination of Arms Length Price (ALP) of international transactions engaged in by the assessee. The DRP was constituted bearing in mind the necessity for an expert body to look into intricate matters concerning valuation and transfer pricing and it is for this reason that specific timelines have been drawn within the framework of Section 144C to ensure prompt and expeditious finalisation of this special assessment. The purpose is to fast-track a special type of assessment. That cannot be considered to mean that overall time limits prescribed have been given a go by in the process. 24. We find it difficult to accept the submissions of Mr. Suresh Kumar because it would in fact mean that, notwithstanding the twelve month period prescribed under Section 153 (3) of the Act, where it says that an order of fresh assessment in pursuance of an order under Section 254 of the Act may be made at any time before the expiry of twelve months from the end of the financial year in which order under Section 254 of the Act is received by the Commissioner, would not apply to a case where Section 144C of the Act is applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to be an impermissible avoidance arrangement is received by the Principal Commissioner etc., shall be excluded. There is no mention anywhere about Section 144C of the Act. 26. If we accept the submissions of Shri Suresh Kumar that when there is a remand as in this case, the AO is unfettered by limitation, it would run counter to the avowed object of provisions that were considered while framing the provisions of Section 144C of the Act. Having set time limits every step of the way, it does not stand to reason that proceedings on remand to the AO may be done at leisure sans the imposition of any time limit at all. 27. Having considered the language of Section 144C and 153, we cannot accept that the provisions of Section 153 are excluded to the operation of Section 144C. 28. Mr. Mistri, therefore, is correct in his submissions that the time limit prescribed under Section 153 of the Act would prevail over and above the assessment time limit prescribed under Section 144C of the Act. This is because the Assessing Officer may follow the procedure prescribed under Section 144C of the Act, if he deems fit necessary but then the entire procedure has to be commenced and concluded within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 144C(4) of the Act with the same limited purpose to imply, even though there might be a larger time limit under Section 153, once the matter is remanded to AO by the ITAT under Section 254, the process to pass final order under Section 144C has to be taken immediately. 32. The object is to conclude the proceedings as expeditiously as possible. There is a limit prescribed under the statute for the AO and therefore, it is his duty to pass an order in time. After 30th September 2021, the AO will have no authority to pass any final assessment order in this Case. 33. We cannot accept the submissions of Shri Suresh Kumar that passing of draft assessment order before 30th September 2021 would suffice. We find support for this view in Roca Bathroom (SB) (Supra) and Roca Bathroom (DB) (Supra). 34. In the circumstances, since no final assessment order can be passed in the present case as the same is time barred, the Return of Income as filed by Petitioner be accepted. This would however, not preclude the Revenue from taking any other steps in accordance with law. 35. Petition disposed. No order as to costs. Writ Petition No. 2340 of 2021 (A.Y. 2014-15) 36. Since the facts, dates, issues an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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