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TMI Blog2025 (2) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, TPO passed order u/s 92CA(3) of the Act on 31.03.2023 making upward adjustments to ALP by Rs. 79,30,427/-. The said order was passed after taking into account the contentions of the assessee before the TPO. In view of the said order, addition of Rs. 79,30,427/- was made to the returned income of the assessee company in accordance with the provisions of 92CA(4) of the Act. The draft assessment order determining the total income of Rs. 6,49,38,057/-, passed under section 144C r.w.s. 1448 of the Act dated 22.09.2023, was duly served to assessee. 2.1 The assessee filed objections against the assessment order before the Dispute Resolution Panel, which issued directions on 22.05.2024, as per the provisions of section 144C(5) of the Act. In paragraphs 2.4.2 and 2.5.3 of its order, the Ld. DRP directed the Transfer Pricing Officer to include 'Batchmaster Software Pvt. Ltd.' as a comparable and to exclude 'XS-CAD' on account of functional dissimilarities. As per the directions of DRP, the TPO passed a give effect order to the directions received under Section 144C vide order dt.12.06.2024. The TPO revised the adjustments made for provision of software developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made for Provision of software development services from 67,95,430/- to 42,91,728/-The order of DRP along with order passed by TPO were received in this office in worklist on 12-06-2024." 6. In rebuttal, the ld.AR referred to the judgment of the jurisdictional High Court in the case of Rapiscan Systems Pvt. Ltd Vs ADIT (Int. Taxation) which is to the following effect : "FINDINGS: 13. Before dealing with rival contentions, it is apposite to consider Sections 144C(13) and 282(1)(c) of the Income Tax Act and Section 13 of the I.T. Act which reads thus: "Section 144C: Reference to dispute resolution panel:- (1) to (12)... (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained insection 153 or section 153B, 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." "Section 282: Service of notice generally:- (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the AO is mandated to complete the assessment ―in conformity with the directions as framed by the DRP. That very provision commands the AO to complete the assessment within one month from the end of the month in which such a direction is received. 17. As is manifest from a reading of sub-section (13) of Section 144C of the Act, the AO is not accorded any discretion in the framing of an order of assessment once directions have come to be framed by the DRP. In fact, the provision requires the AO to frame an order of assessment in conformity with those directions and without providing any further opportunity of hearing to the assessee. This principle of law has been affirmed by the Bombay High Court in the aforenoted paragraphs of Vodafone Idea and in Shell India Markets Private Limited v. Additional Commissioner of Income Tax Officer, National Faceless Assessment Centre & Ors10. The relevant paragraph of the decision in Shell India are extracted hereinbelow: '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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequential penalty proceedings are thus liable to be set aside on this short score alone." (Emphasis Supplied) 16. The Bombay High Court in Vodafone Idea Ltd. (supra) opened as under: "15. Annexed to the affidavit of Mr. Satish Sharma is a screenshot of the CHN-Case History Notings of the Dispute Resolution Panel proceedings uploaded on the Income-tax Business Application portal. The screenshot is of the page as it appears on the Income-tax Business Application portal. A perusal of the screenshot of Case History Notings of the Dispute Resolution Panel read with the affidavit filed by Mr. Satish Sharma, the Chief Commissioner of Income-tax and Ms. Anne Varghese, the Joint Commissioner of Income-tax, clearly indicate that once the DRP directions are uploaded and the Document Identification Number ("DIN") is generated, which is also visible on the first page of the hard copy of the DRP directions, the said document is visible to the AO of the Faceless Assessment Unit ("FAU") having jurisdiction over the permanent account number of the assessee concerned. Thus, both the affiants agree that the Dispute Resolution Panel directions once uploaded on the Income-tax Business Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, 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 are forbidden. Once the statute has prescribed a limitation period for passing the final order, it is expected that the internal procedure of the Department should mould itself 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 the assessee. Hence, the Faceless Assessing Officer cannot be believed that the Dispute Resolution Panel direction was received by him only on August 23, 2023 despite being uploaded on the Income-tax Business Application portal on March 25, 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." 17. The Madras High Court in Taeyang Metal India (P) Ltd. (supra) followed the principle laid down by the Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from it (see Dr. (Mrs.) Chanchal Goyal v. State of Rajasthan 8). It is equally settled that a singular different fact or point may change the precedential value of a judgment (see Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. 9). 22. So far, the judgment in the case of Commissioner of Income Tax, Chennai (supra) is concerned on which reliance is placed by Sri Vijhay K Punna, it is profitable to note that in the said case, the Supreme Court considered Section 263(2) of the Income Tax Act, in the said Section the word used is 'made' and not 'receipt of the order'. The Supreme Court emphasized the cardinal principle of the law that provision of statute is to be read as it is and nothing is to be added or taken away from the provision of the statute. In other words, this is well settled that 2003 (3) SCC 485 (2003) 2 SCC 111 when language of statute is clear and unambiguous, it has to be given effect to irrespective of its consequences (see Nelson Motis vs. Union of India 10). 23. The pivotal question is whether in view of the language employed in Section 144C(13) whether directions of DRP can be said to be received by the assessing officer on 30.06.2022. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Standing Counsel for revenue contends that 'receipt' will be the date when the e-mail was received by the revenue containing the DRP directions i.e., on 05.07.2020. 28. As per the view taken by the aforesaid three High Courts there is no doubt that when the originator/DRP sends its directions in computer resource outside its control, it amounts to 'despatch' and similarly, 'receipt' takes place when said electronic record enters the computer resource. 29. Section 282 of the Income Tax Act on which reliance was placed by Sri Vijhay K Punna, learned Standing Counsel for revenue makes it clear that in Sub-Section 1(c) of Section 282, the communication through electronic record as per Chapter IV of the I.T.Act was recognized and treated to be service of notice generally. Chapter IV of the I.T.Act contains Section 13, which envisages time, place of 'despatch' and 'receipt' of electronic record. 30. In order to meticulously examine the aspect of 'despatch' and 'receipt', in the present case, it is apt to quote the relevant portion of letter dated 05.03.2024 filed along with I.A.No.1 of 2024 in the present matter, which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. From the plain reading of the above, it is clear that the order is required to be passed by the Assessing Officer within one month from the date of receipt of order form the end of the month in which the order was received by the Assessing Officer. It is the case of the assessee that the proceedings before the DRP were conducted on the basis of rules and guidelines framed under Section 144B, read with Section 282 of the Act. In the present case, admittedly, the order of DRP was upheld on 22.05.2024 and immediately, the same must have been transmitted and received by the Assessing Officer / TPO. 10. In the present case, the DRP had issued directions on 22.05.2024 and, on the same day, sent an email to the Assessing Officer / TPO. The TPO, after receiving the direction of the DRP, passed the order giving effect on 12.06.2024. However, the Assessing Officer passed the order only on 19.07.2024. In the order dated 19.07.2024, the Assessing ..... 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