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TMI Blog2023 (6) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... d 05/05/2022, for the Assessment Year 2010-11. 2. The assessee in appeal has assailed the assessment order on two grounds: (i) In holding that the amounts received under the International Sales and Marketing Agreement is taxable; (ii) In holding that the Appellant is not entitled to the benefit of Principle of Mutuality . The assessee vide letter dated 14/03/2023 has raised an additional ground, the same reads as under: 3. On the facts and circumstances of the case and in law, the assessment order dated December, 31, 2019 passed by the assessing officer without passing draft assessment order, is bad in law and void ab initio as the same has been passed in violation of section 144C of the Income-tax Act, 1961. 3. Shri Paras Savla appearing on behalf of the assessee submitted at the outset that the assessee is in third round of litigation for Assessment Year 2010-11 before the Tribunal. The assessment u/s. 143(3) R.W.S. 144C(13) of the Income Tax Act, 1961 [ in short the Act] was framed by the Assessing Officer vide order dated 17/05/2013 treating receipts from international sales and marketing as Royalty/Fee for Technical Services (FTS). The assessee carried the issue in appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional ground of appeal assailing validity of assessment order dated 31/12/2019 stating that the final assessment order has been passed without passing draft assessment order. Thus, the impugned assessment order has been passed in violation of the provisions of section 144C of the Act. He further submitted that no additional documents are required to be filed for deciding additional ground of appeal. The ld. Authorized Representative of the assessee placed reliance on the decision of Tribunal in ITA No. 1830/Mum/2021 in support of additional grounds of appeal raised by the assessee. 3.2 The ld. Authorized Representative of the assessee submitted that the Tribunal in the first round of litigation remanded the issue to the file of Assessing Officer to adjudicate the issue of mutuality raised by the assessee. Thus, it was not simplicitor remand to reconsider the issue that have already been decided by the Assessing Officer in the first round of assessment order. The assessee had raised an argument on principle of mutuality , which was not earlier considered by the Assessing Officer or the CIT(A) though a specific ground was raised before the CIT(A). The ld. Authorized Representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd raised by the assessee is purely legal and goes to the root of validity of assessment order. No additional documentary evidences are required to be adduced to adjudicate the additional ground raised by the assessee. In light of decision in the case of NTPC Ltd. vs. CIT, 229 ITR 383(SC), the additional ground raised by the assessee is admitted for adjudication. 6. In so far as factual matrix of the case, repeated appeals and sequence of events narrated by the ld. Authorized Representative of the assessee, are not in dispute. The present appeal emanates from the assessment order dated 31/12/2019 passed in pursuance to the directions of the Tribunal vide order dated 09/03/2018. For the sake of completeness the relevant extract of the Tribunal order in ITA No. 2217/Mum/2016 dated 09/03/2018 (supra) is reproduced herein below: 5. A perusal of the orders of the Assessing Officer as well as that of CIT(A) reveal that the impugned sums have been held to be taxable as Royalty income. In fact, the CIT(A) has noted in para 5 of the impugned order that similar issues have been decided by the Tribunal in assessee s own case vide order dated 14.01.2015 (supra) and directed the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer. The Assessing Officer was required to pass the draft assessment order under the provisions of section 144C of the Act before passing the final assessment order. This Bench in assessee s appeal in second round of litigation in ITA No. 1830/Mum/2021 while considering identical ground challenging the validity of final assessment order without there being any draft assessment order held as under:- 9. We have heard the submissions made by rival sides on the short legal issue raised by the assessee by way of additional ground of appeal. From the submissions made by rival sides the fact emerges that in the second round, the AO passed final assessment order dated 29/12/2016 without passing the draft assessment order. 10. Provisions of section 144C of the Act lays down the procedure to be followed under special mechanism. The AO is first required to pass draft assessment order u/s 144C (1) of the Act. On receipt of the draft assessment order, the eligible assessee within 30 days either accepts the variations or may file objections, against such variations before the DRP. If no objections are filed against the draft assessment order, the AO shall pass the final assessment order. In case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) read with Section 144C read with Section 254 of the Act and it certainly makes a variation to the returned income filed by the petitioner. This even if, one proceeds on the basis that the returned income stands varied by the order of the Tribunal in the first round, to the extent the petitioner accepts it. Therefore, the Assessing Officer correctly invokes Section 144C of the Act in the impugned order. Once having invoked Section 144C of the Act, the Assessing Officer is obliged to comply with it in full and not partly. This impugned order was passed consequent to the order of the Tribunal dated 5th May, 2017 restoring some of the issues before it to the Assessing Officer for fresh adjudication. 9. This fresh adjudication itself would imply that it would be an order which would decide the lis between the parties, may not be entire lis, but the dispute which has been restored to the Assessing Officer. According to us, the order dated 31st January, 2018 is not an order merely giving an effect to the order of the Tribunal, but it is an assessment order which has invoked Section 143(3) of the Act and also Section 144C of the Act. This invocation of Section 144C of the Act has tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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