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TMI Blog2024 (5) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... out jurisdiction and therefore, null in the eyes of law andtherefore, we quash the impugned assessment order. Assessee appeal allowed. - Shri Aby T. Varkey, Judicial Member And Shri Jagadish, Accountant Member For the Appellant : Shri Soumen Adhak (Virtual) For the Respondent : Shri A. Sasikumar, CIT ORDER PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Assessing Officer (hereinafter the AO ) u/s. 143(3) r.w.s. 144C(1) r.w.s. 92CA of the Income Tax Act, 1961 (hereinafter the Act ) dated 21.11.2017 for the Assessment Year (AY) 2013-14. 2. Ground No.1.1 of the assessee s appeal reads as under: 1.1 That on the facts and circumstances of the case, since the Ld. AO has passed the final assessment order after expiry of one month from the end of the month in which the directions of the Honourable Dispute Resolution Panel (Ld. DRP) were received by the Ld. AO, the impugned order shall be regarded as invalid as barred by limitation in terms of section 144C(13) of the Act. 3. Brief facts are that the assessee company is engaged in the business of providing audio, video, web conference to its customers. It filed its return of income (RoI) for AY 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that assessee failed to reply/comply; and therefore, assessee was given one more opportunity by the AO before passing the final order. 5. According to the Ld.AR, the assessee objected to the framing of the final assessment order by pointing out to the AO vide letter dated 20.11.2017 [found placed at Page Nos. 3 to 4 of the Paper Book], wherein, it was asserted that the AO having received the direction of the DRP on or before 21.09.2017, he was bound to complete the final assessment order before 31.10.2017 and since, the last date for passing the order u/s. 144C(13) of the Act has expired on 31.10.2017, he cannot pass the same being time-barred. Nevertheless, the AO passed the final assessment order on 21.11.2017 despite the assessee pointing out to him that the order is time barred. Now before us, assessee is assailing the action of AO passing final assessment order as bad being time-barred. In order to support such a proposition, he relied upon the decision of the Hon ble Madras High Court order in Writ Petition No.12159 of 2023 and WMP No.11989 of 2023 dated 23.02.2024 of M/s.Taeyang Metal India Pvt. Ltd. v. DCIT/ITO/DRP, wherein, similar legal issue was asserted by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its AE; and pursuant thereto, the TPO vide order dated 24.10.2016 made a downward adjustment of Rs. 7,53,90,367/-. Pursuant thereto, the AO passed the draft assessment order on 26.12.2016 computing total income of the assessee at Rs. 48,75,73,688/- in place of the returned income of Rs. 37,23,48,860/-. Against the proposed addition made in draft assessment order, the assessee filed objection before the DRP and the DRP was pleased to reject the objections of the assessee on 08.09.2017, thereby, confirmed the adjustment made by the TPO to the extent of Rs. 7,53,90,367/-. Pursuant thereto, the AO passed the impugned final assessment order on 21.11.2017 u/s. 143(3) r.w.s. 144C(1) r.w.s. 92CA of the Act. The assessee has challenged the action of the AO passing the final order in November, 2017, whereas, according to the Ld.AR, the AO was bound to pass the final assessment order on or before 31st October, 2017 as per the timeline given u/s. 144C(13) of the Act. In order to adjudicate this legal issue, we note that following are admitted facts i.e. the AO received the directions of the DRP on 18.09.2017 (as confirmed by the Ld.DR before us); and thereafter, AO issued notice to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. Explanation. For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee. (9) . (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee before the DRP on 27.01.2017 and the DRP directions were issued on 08.09.2017 and the AO received the DRP directions on 18.09.2017. Therefore, as per section 144C(13) of the Act, the AO has to complete the assessment (final 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. That means, in this case, the AO had received the directions of the DRP dated 08.09.2017, on 18.09.2017. Therefore, within one month from the end of the month of receipt of the DRP directions means 31st October, 2017 is the last date to pass the final assessment order. However, in this case, it is an admitted fact that the final assessment order was passed on 21st November, 2017, which means the final assessment order has been passed after the time barring date on 31st October, 2017. Therefore, such an order is bad in law and the AO has passed the order wholly without jurisdiction and therefore, is null in the eyes of law. 11. The Ld.CIT-DR s only defense was that the DRP had given directions (supra) to the AO ( to verify the claim of the assessee regarding objection No.15 raised bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o take a conservative view. The correction of such view takes very long time with the existing appellate structure. With a view to provide speedy disposal, it is proposed to amend the Income-tax Act so as to create an alternative dispute resolution mechanism within the Income-tax Department and accordingly, section 144C has been proposed to be inserted so as to provide inter alia the Dispute Resolution Panel as an alternative dispute resolution mechanism. 21. Thus, if the provisions of section 144C as mandated by the statute are not strictly adhered to the entire object of providing for an alternate redressal mechanism in the form of Dispute Resolution Panel stand defeated. That is not the intention of the Legislature when the provision was introduced in the Act. Section 144C(10) of the Act provide that the directions of Dispute Resolution Panel are binding on the Assessing Officer. By failing to pass any order in terms of the provision, the Assessing Officer cannot be permitted to defeat the entire exercise and render the same futile. When a statute prescribes the power to do a certain thing in a certain way, then the thing must be done in that way and other methods of performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to therein is the National Faceless Assessment Centre, Delhi. The petitioner has placed on record a communication from the Secretary and ACIT to the DRP. The said communication states that the assessing officer in the captioned case is the National Faceless Assessment Centre, Delhi and that a scanned copy of the proceedings was uploaded to the National Faceless Assessment Centre on 17.06.2022. 7. From the above discussion, the conclusion that emerges is that the directions of the DRP were forwarded to the assessing officer, i.e. National Faceless Assessment Centre, Delhi by uploading the same on 17.06.2022. Although learned senior standing counsel contends that the jurisdictional assessing officer received the directions only on 17.03.2023, for purposes of https://www.mhc.tn.gov.in/judis sub-section (13) of Section 144C, the date of receipt should be reckoned as the date of receipt by the National Faceless Assessment Centre on 17.06.2022. The internal arrangement by which the assessment proceedings relating to the petitioner were purportedly transferred so as to ensure that the proceedings are not barred by limitation is not material for this purpose. Indeed, as contended by l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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