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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 ..... passed by the AO is barred by limitation and is liable to be quashed. Appeal filed by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... parable on functional dissimilarities and Batchmaster Software Pvt. Ltd. is included as comparable. The Transfer Pricing Officer revised the adjustment made u/s. 92CA in the order dated 31.03.2023. In the order dated 31.03.2023, the TPO made following adjustments: S.No. Description Adjustment u/s 92CA (in Rs.) 1 Provision of Software development expenses 67,95,430/- 2 Interest on delayed receivables 11,35,997/- Total Adjustments 79,30,427/- As per directions of the Ld. DRP, the TPO revised the adjustments made for Provision of software development services." 5. The ld.DR, on the other hand, has drawn our attention to page 9 of the AO's order, wherein it was mentioned that the order of the DRP, along with the TP order, was received on 12.06.2024. Accordingly, it was argued that the AO's order was passed within the prescribed time limit and is, therefore, valid. The relevant portion at page 9 of the order reads as under : "…..In the order giving effect to the direction of Ld. DRP, the TPO revised the adjustments 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Emphasis Supplied) 14. The E-Assessment Scheme, 2019 placed reliance on Section 13 of the I.T. Act for the purpose of delivery of electronic record. The relevant portion reads thus: "Delivery of electronic record: 10. (1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of:- (a) placing an authenticated copy thereof in the assessee's registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or his authorized representative; or (c) uploading an authenticated copy on the assessee's Mobile App; and followed by a real time alert. (2) and (3) xxx (4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of Section 13 of the Information Technology Act, 2000 (21 of 2000)." (Emphasis Supplied) 15. The Delhi High Court in Louis Dreyfus Company India Private Limited (supra) held as under: "15. In terms of sub-section (13) of Section 144C of the Act, the AO is mandated to complete the assessment ―in conformity with the directions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 this Scheme shall be through the National e-assessment Centre. 22. It is thus manifest that as per the provisions of E-as, 2019, all orders, notices and decisions have to be necessarily uploaded on the ITBA portal and as part of the larger faceless assessment regime which now holds the field. The uploading of the directive of the DRP on the ITBA portal would thus constitute valid and sufficient service and the period of limitation as prescribed in Section 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid position becomes clear, it is evident that the order of assessment, if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory timelines as incorporated in the aforenoted provisions. Accordingly, the writ petition is liable to be allowed and the impugned order of assessment and the consequential penalty proceedings are thus liable to be set aside on this short score alone.&q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 the directions issued under sub- section (5) of section 144C of the Act, the Assessing Officer shall. . ." there is no requirement of delving in a further in-depth analysis of the clear provision. 18 to 20...... 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 permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed bearing that crucial date in mind. 20. Importantly, the Bombay High Court in Vodafone Idea Ltd. (supra) poignantly held that as per the said scheme once e- assessment centre is in receipt of DRP directions, the period of limitation runs from that date. No further deep dive is required in view of language of Section 144C(13) of the Income Tax Act. 21. Sri Vijhay K Punna, learned Standing Counsel for revenue, placed reliance on the judgment of Supreme Court in the case of National Faceless Assessment Centre (supra). The said case is arising out of faceless assessment procedure envisaged in Section 144B of the Income Tax Act. The Apex Court while upholding the view of the High Court observed that faceless assessment scheme came into being recently and therefore, the revenue ought to have been given some leverage to correct themselves and take corrective measures. The said observation of the Supreme Court is related to the faceless regime and cannot be stretched and made applicable in this case. This is trite that the precedential value of a judgment relates to the point which has been actually decided and not what is logically flowing from it (see Dr. (Mrs.) Chanchal Goya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored or transmitted to any other person but does not include an intermediary;" (Emphasis Supplied) 26. Once 'originator' enters a computer resource outside his control, 'despatch' takes place. Sub-Section 2 (a) of Section 13 of the I.T.Act deals with 'receipt' which makes it clear that 'receipt' occurs at the time when the electronic record enters the designated computer resource. Thus, the meaning of 'despatch' or 'receipt' is elaborately defined in aforesaid Sub-sections of Section 13 of the I.T.Act. The word 'computer resource' is also defined under Section 2(k) of the I.T.Act, which reads thus: "Section 2: Definitions (k) ― computer resource means computer, computer system, computer network, data, computer data base or software;" 27. In the instant case, parties have taken a diametrically opposite view on the aspect whether the directions uploaded on the portal on 30.06.2022 can be treated to be 'receipt' on the part of the assessing officer. Sri Vijhay K Punna, learned Standing Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt poignantly held that the portal of the department is the 'computer resource in the control of the department'). 32. In view of forgoing discussion, there is no cavil of doubt that assessing officer received the DRP's directions on 30.06.2022 and therefore, the limitation must be counted from that date and not from 05.07.2022. The impugned assessment orders dated 30.08.2022 and 01.09.2022 that were issued counting the limitation from 05.07.2022 in both the Writ Petitions are liable to be set aside as the same are issued beyond permissible period of limitation. 33. In the result, both the Writ Petitions are allowed by setting aside the impugned assessment orders dated 30.08.2022 and 01.09.2022. There shall be no order as to costs. Miscellaneous applications, if any, shall stand closed." 7. In view of the above, the appeal of assessee is required to be allowed. 8. We have heard the rival submissions and perused the material on record. Section 144C(13) of the Act provides as under: Section 144C(13) in The Income Tax Act, 1961 (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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