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TMI Blog2023 (11) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... self to give meaning to and act in aid of the provision. Any procedural defect (there is none in this case) in the internal mechanism of the working of E-assessment Scheme, cannot operate against the interest of assessee. Hence, the FAO cannot be believed that the DRP direction was received by him only on 23rd August 2023 despite being uploaded on the ITBA portal on 25th March 2021. The failure on the part of department to follow the procedure under Section 144C of the Act is not merely a procedural irregularity, but is an illegality and vitiates the entire proceeding. The assessment order passed by FAO two years after the DRP directions, is time barred and cannot be sustained. Consequently, the ROI as filed has to be accepted. Petitioner is entitled to receive the refund together with interest, in accordance with law. The procedure to be completed within 30 days of this order being unloaded. This would, however, not preclude revenue, should the need arise, from reopening the assessment by following due process and in accordance with law. - K. R. Shriram And Dr. Neela Gokhale, JJ. For the Petitioner : Mr. J. D. Mistri, Senior Advocate a/w Mr. Madhur Agrawal i/b Mr. Jite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is not directly relevant to determine the issue under consideration in the present proceedings, save and except a direction of the Apex Court dated 29th April 2020 passed in Civil Appeal No. 2377 of 2020 directing the Revenue to conclude the assessment proceedings for AY 2016-2017 at the earliest. 5. In the meantime, the TPO passed an order proposing an adjustment to the value of the international transaction of Petitioner. The Assessing Officer ( AO ) passed a draft order dated 29th December 2019 under Section 144C(1) of the Act for the relevant AY and proposed various additions/disallowances. Petitioner filed objections under Section 144C(2)(b) of the Act before the Dispute Resolution Panel ( DRP ) on 27th January 2020. A notice was issued by the DRP and Petitioner responded by filing relevant documents/evidence in support of objections raised by it. Finally the DRP issued directions dated 25th March 2021 under Section 144C(5) of the Act. The directions of DRP were uploaded on the Income Tax Business Application ( ITBA ) portal on the same date and the said directions were served on Petitioner vide e-mail dated 6th April 2021. The grievance of Petitioner essentially is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conformity with the directions of DRP was completed on 31st August 2023, it was within the one month prescribed under Section 144C(13) of the Act as the limitation period ran from the date of receipt by him of the order and not the date when the same were uploaded on the ITBA portal. Mr. Singh thus says that it was only on the receipt of the directions of DRP that the FAO was duty bound to complete the assessment, i.e., pass the final order. Mr. Singh thus prayed for dismissal of the petition. 9. Therefore, admittedly, the DRP issued the directions on 25th March 2021 whereas the assessment was completed and an order came to be passed on 31st August 2023. 10. At the outset it is important to note that the entire assessment proceedings are governed by the Faceless Assessment Mechanism under the scheme known as the e-Assessment Scheme ( eAS ), 2019 as notified by the Ministry of Finance (Department of Revenue) on 12th September 2019. The salient features of the scheme include defining the scope of scheme, jurisdiction of e-Assessment Centre, procedure for assessment, penalty proceedings for non-compliance amongst other features. The Central Government amended the FAS of 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of such assessment; (xxxii) The National e-Assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the Act. 11. An analysis of eAS and the amendment indicate that various notices, summons and orders are received and issued by the National e-Assessment Centre ( NeAC ) set up to conduct e-assessment proceedings in a centralized manner. Paragraph 4(2) of the eAS provides as under : 4(2). All communication among the assessment unit, review unit, verification unit or technical unit or with the assessee or with any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under the scheme shall be through the National e-Assessment Centre. Thus, any notice, summons, order is deemed to have been received by the FAO once it is available to the NeAC. 12. On 1st August 2023, when the matter was listed before this Court, a statement was made by Mr. Singh that because of the commencement of the Faceless Assessment Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el files an affidavit explaining, inter alia, as to why when the Faceless Assessment Regime had already kicked in, DRP s directions were sent to the Jurisdictional Assessing Officer instead of to the Faceless Assessing Officer. So also the Jurisdictional Assessing Officer, who had received the directions of DRP, and it will be the same officer who was in that post when the directions were received and not any successor, shall file an affidavit explaining why he/she did not forward the directions of DRP to the concerned Faceless Assessing Officer particularly when, as Mr. Singh states, the Faceless Assessment Regime had begun. These affidavits shall be filed and copy served by 10th August 2023. 5 Stand over to 22nd August 2023. 13. Pursuant to our directions of 1st August 2023, two affidavits were filed, one by Mr. Satish Sharma, the Chief Commissioner of Income Tax (International Taxation and Transfer Pricing) West Zone, Mumbai and another by Ms. Anne Varghese, JCIT, Ratlam on 10th August 2023. The relevant portion of the affidavit of Mr. Satish Sharma reads thus : 4. I respectfully say that I have called the factual position and the relevant records from the DRP and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Bombay HC. (emphasis supplied) 14. The relevant portion of the affidavit of Ms. Anne Varghese reads thus : 3. I say that at the relevant time I was working as Jurisdictional Assessing Officer in my capacity as Deputy Commissioner of Income Tax 5(2)(1), Mumbai. 4. I respectfully say that Physical copy/offline order of the Dispute Resolution Panel (D.R.P.) dated 25.03.2021 was received in tapal/inward register by the Jurisdictional Assessing Officer in its office on 30.03.2021 in the case of Vodafone Mobile Services Limited . 5. I respectfully say that the physical copy of the D.R.P. order was not forwarded to the Faceless Assessing Officer since it was ascertained that the said direction dated 25.03.2021 of the D.R.P. was available under the View Download Order/Letter/Notices Tab Functionality of the Income Tax Business Application (I.T.B.A.). I say that the documents which are visible under the View Download Order/Letter/Notices Tab Functionality of the Income Tax Business Application (I.T.B.A.) are also available to other officers (AO of Faceless Assessment Unit (F.A.U.) in this case) having jurisdiction over the PAN. 6. I respectf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the DRP directions were always visible and accessible to the FAO on the ITBA portal. 17. Mr. Singh made all attempts to persuade us that despite the ITBA portal displaying the DRP directions and the same being accessible to the FAO, it was only on 23rd August 2023 that the same were received by the FAO. We cannot accept this because, the E-assessment Scheme itself provides that all communication is deemed to have been received by the assessment units concerned once received through the NeAC. Thus, once the E-assessment Centre is in receipt of the DRP directions, the period of limitation runs from that day. There is no requirement of a deep dive in an analysis of the phrase upon receipt of directions as it appears in Section 144C(13) of the Act. The fundamental principle of interpretation is to assign words their natural, original and precise meaning, provided that the words are clear and take into account the purpose of the Statute. It is settled law that a provision should be interpreted in its literal sense and given its natural effect. This is the elementary golden rule of interpretation of Statutes. Since there is no ambiguity pertaining to the phrase upon receipt of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on over the PAN. Moreover, Mr. Satish Sharma states the DRP directions cannot be sent to the FAO directly because no authority will be aware of his identity. Though we had highlighted all these defects in Revenue s case in our order dated 5th September 2023, no attempt has been made to clarify. It is thus very difficult to agree with the proposition advanced by Mr. Singh that as per the CHN the DRP direction was received by the FAO only on 23rd August 2023. There is no whisper of any explanation as to why the FAO, who was seized with the pending assessment of Petitioner, remained inactive and silent for two long years and swung into action only when information about filing of this writ petition was uploaded on the CHN. Strangely enough a noting pertaining to this writ petition filed on 8th June 2023 appears on the CHN of 11th July 2023, but still the DRP directions of 25th March 2021 appear only on 23rd August 2023. No explanation on behalf of the department is forthcoming. We have to draw adverse inference. 20. Section 144C of the Act is a self contained provision which carves out a separate class of assessees, i.e., eligible assessee . Section 144C of the Act was inserted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 2017 SCC OnLine DEL 8441 , the Delhi High Court has held that the question whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of Section 144C of the Act? , is no longer res integra and any order passed contrary to Section 144C of the Act cannot be sustained. 23. In a decision cited by Mr. Mistri in the matter of Shell India Markets (P.) Ltd. (supra), this Court has also held as follows : 10. Sub-section (13) of Section 144C, therefore, is very clear inasmuch as the Assessing Officer shall, upon receipt of the directions issued under Sub-section (5), in conformity with the directions, complete the assessment within one month from the end of the month in which such direction is received. Sub-section (13) also provides that the Assessing Officer can complete the assessment without providing any further opportunity of being heard to the assessee. This means that the moment the Assessing Officer receives the directions under Sub-section (5), he has to straightaway complete the assessment and he does not even have to hear the assessee. The Assessing Officer shall simply comply with the directions received from the DRP with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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