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TMI Blog2024 (4) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... s and directions and same when issued u/s 119 of the Act specifically mention the fact that Board has invoked the powers of Section 119 of the Act. The explanatory notes to the provisions of Finance Act only explain the substance of the provisions of the concerned Finance Act relating to Direct taxes and may serve as external aid to interpretation of the Finance Act but cannot be considered to be issued u/s 119 of the Act, so as to say that if anything contained therein in the explanatory notes has not been followed by the assessing officer, it will lead to defiance of orders, instructions and directions issued by the Board u/s 119 of the Act. Thus the exercise of jurisdiction by invoking clause (c) of Explanation 2 of Section 263(1) of the Act, itself was bad. Then reference to any order u/s 263 of the Act is to an assessment order, which otherwise is passed in due course of law and is otherwise a valid and enforceable order and not an order which is void ab initio, being not passed in accordance with due course of law. Decided in favour of assessee. - Shri Shamim Yahya, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri Himanshu S. Sinha, Shri Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 30.11.2015 passed u/s 143(3) r.w.s. 144C of the Act, assessee preferred an appeal before the ITAT. The ITAT vide its order dated 15.09.2016 in ITA No.344/Del/2016, set aside the issue before AO/TPO for fresh calculation of ALP. In consequence of the order of ITAT, a reference for calculation of ALP according to direction of the ITAT was made to the DCIT, TPO-(3)(2), New Delhi. The DCIT, TPO-3(3)(2), New Delhi, after considering the merits of the case, proposed adjustment of Rs. 1,61,23,309/- on account of difference of ALP by passing order u/s 92CA(3) r.w.s. 254 of the Act, dated 29.10.2018. Accordingly, Assessment order/s 254/143(3) r.w.s. 92CA(3) of the Act was passed on 12.11.2018 and the income was recomputed as under:- Income, as declared in ITR Rs. 1,06,24,217/- Additions/disallowances (i) TPO adjustment u/s 92CA(3), of the Act vide order dated 29.10.2018. Rs. 1,61,23,309/- Total Income Rs. 2,67,47,526/- 4. It may be noted that the TPO reduced the ALP adjustment from Rs. 3,87,54,545/- to Rs. 1,61,23,309/-, therefore a final assessment order incorporating the adjustments was passed on 12.11.2018. 5. However, Ld. Pr. CIT, on re-examination of the case records and also o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case and in law, the Ld. Pr. CIT erred in holding that the assessment order dated November 12, 2018, was erroneous and prejudicial to the interests of the revenue without satisfying the prerequisite conditions of section 263 of the Act. The above Grounds of Appeal are without prejudice to each other. The Appellant craves for leave to amend, vary, omit or substitute any of the aforesaid grounds of appeal or add any further ground of appeal(s) at any time before or at the time of hearing of the appeal. 9. Heard and perused the record. At the time of hearing Ld. DR had pointed that assessee has also approached Hon ble Delhi High Court challenging the same order u/s 263 of the Act. Ld. AR had countered that both are independent remedy. However, the Bench had observed that having availed alternative here, the assessee may withdraw the Writ for which Ld. AR submitted that same shall be withdrawn. On 22.03.2024 order dated 10.11.2023 is filed showing WP(C) 9636/2019 being withdrawn. 9.1 The ld. AR heavily relied on the judgement of the Hon ble Andhra Pradesh High Court in the case Zuari Cement Ltd. vs. ACIT [TS-271-HC-2013 (AP)-TP] and the judgement of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before him. However, the entire data is available on record and, therefore, in order to arrive at correct computation the assessee s plea regarding sub-contracting expenses 100% attributable to non AE business has to be examined. The assessee has filed additional evidence in support of its contention and, therefore, it would be in the interest of justice that the additional evidence is admitted for arriving at proper computation of ALP. We, accordingly, admit the additional evidence and restore the matter back to the file of Ld. TPO to examine the assessee s plea in this regard. In case it is found that D E expenses were attributable 100% to independent third party transaction then the same has to be excluded for computing the operating cost of the assessee because operating cost pertaining to AE only has to be considered. 12. The order of the TPO shows that in compliance of the directions of the Tribunal, a reference was received from the AO and the assessee was given a fresh opportunity of hearing. The assessee had filed additional evidences before the TPO which were taken into consideration by the TPO. 13. Now, when, in the background of the aforesaid facts coming up from the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional evidences. As observed earlier in para 4, the TPO had made reference to the additional evidences as considered. Thus, the judgement relied by the ld. DR is not applicable to the present facts and circumstances. 14.1 At the same time, by the judgement of the Hon ble Delhi High Court in the case of Headstrong Services India (P) Ltd. (supra) the AO was directed to frame the assessment afresh. This judgement of the Hon ble Delhi High Court in Headstrong Services India (P) Ltd. (supra) was cited before the Hon ble Madras High Court and it appears that for that reason the Hon ble Madras High Court in paras 18 and 19 had made a distinction in regard to cases in which the entire order is not set aside and a mere direction is issued. We appreciate the arguments of the ld. DR that the judgement of the Hon ble Andhra Pradesh High Court in the case of M/s Zuari Cement Ltd. (supra) was not a case where, after remand proceedings, a fresh order was passed, but, that was a case of original assessment being challenged for non-following the provisions of section 144C. However, the Hon ble Delhi High court judgement in Headstrong Services India (P) Ltd. (supra) being binding as the precedent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f orders, instructions and directions issued by the Board u/s 119 of the Act. Thus the exercise of jurisdiction by invoking clause (c) of Explanation 2 of Section 263(1) of the Act, itself was bad. 17. Then reference to any order u/s 263 of the Act is to an assessment order, which otherwise is passed in due course of law and is otherwise a valid and enforceable order and not an order which is void ab initio, being not passed in accordance with due course of law. The following judgements, which the ld. AR has relied, also brings forth the settled proposition of law that a non est and void order cannot be subject matter to the revisionary proceedings u/s 263 of the Act:- (i) Gigabyte Technology (India) (P.) Ltd. V. CIT, [2020] 121 taxmann.com 301 (Bombay) (HC); (ii) DCIT v. Dina Mahabir Re-Rollers Pvt. Ltd. [2022] 135 taxmann.com 338(Patna - Trib.); (iii) Mohan Jute Bags Mfg. Co. v. PCIT [2021] 131 taxmann.com 309 (Kolkata -Trib.); (iv) Keshab Narayan Banerjee v. CIT [1998] 101 Taxman 512 (Cal.) (Calcutta-HC); (v) Westlife Development Ltd. v. Principal Commissioner of Income Tax [2017] 88 taxmann.com 439 (Mum. - Trib.); and (vi) V. Narayanan v. DCIT, [2010] 127 ITD 133 (Chennai) (Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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