Bombay High Court
Pr. Commissioner Of Income Tax-15 vs Lionbridge Technologies Pvt Ltd on 3 December, 2018
Bench: Akil Kureshi, M.S.Sanklecha
S.R.JOSHI itxa-622-2016.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 622 OF 2016
The Pr. Commissioner of Income Tax-15 .. Appellant.
v/s.
Lionbridge Technologies Pvt. Ltd., .. Respondent.
Mr. Suresh Kumar, for the Appellant.
Mr. J. D. Mistri, Sr. Advocate with Mr. A. K. Jasani, for the Respondent.
CORAM: AKIL KURESHI &
M.S.SANKLECHA, JJ.
DATE : 3rd DECEMBER, 2018.
P.C:-
This Appeal under Section 260-A of the Income Tax Act, 1961 (the Act), challenges the order dated 29th May, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order dated 29 th May, 2015 is in respect of Assessment Year 2007-08.
2 The Revenue urges the following question of law for our consideration:
" Whether on the facts and in the circumstance of the case and in law, the Tribunal is correct in entertaining the objection that the assessment order is without jurisdiction null and void and unenforceable?"
3 Respondent-Assessee is engaged in the business of Design, Development and export of computer software and providing information technology enabled services.
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4 For the subject Assessment Year, an assessment was
completed on 17th October, 2011 under Section 144C(13) read with Section 143(3) of the Act, by making various additions. On challenge, the Tribunal by its order dated 25th January, 2012 set aside the above Assessment Order dated 17th October, 2011 and restored the assessment to the Assessing Officer. This was only for the reason that the Dispute Resolution Panel (DRP) had not dealt with the objections of the Respondent.
5 On the above remand, the Assessing Officer referred the International Transactions to the Transfer Pricing Officer (TPO). On receipt of the Order dated 27 th January, 2014 of the TPO, the Assessing Officer passed an Assessment Order on 12 th March, 2014 under Section 143(3) read with Section 144(C)(13) of the Act. This on the basis of the observations made by the DRP in original Assessment Proceedings, which has already been set aside.
6 Thereafter, on 16th April, 2014, the Assessing Officer issued a corrigendum to Assessment Order dated 12th March, 2014. This to the effect that the order dated 12 th March, 2014 should be treated as Draft Assessment Order and not as a final order disposing of the Assessment for subject Assessment Year.
7 The Respondent, thereafter, challenged the Draft Assessment Order, as a result of the corrigendum, before the DRP. Thereafter, the final Assessment Order dated 9th January, 2015 was also passed in terms of DRP directions. It is the above order dated 9 th January, 2015 which was the subject of challenge before the Tribunal.
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8 In appeal before the Tribunal, the Respondent urged that the
order dated 9th January, 2015 of the Assessing Officer is without jurisdiction. In as much the assessment was completed earlier on 12 th March, 2014 by passing a final order without following the mandate of Section 144(C)(i) of the Act or directions of the Tribunal. Further, the above order dated 12th March, 2014 is sought to be converted into a Draft Assessment Order by corrigendum dated 16 th April, 2014 i.e. beyond the period to pass an order under Section 153(2A) of the Act. If the corrigendum is of no effect, then all subsequent proceedings are without jurisdiction.
9 The Tribunal by the impugned order, noted the fact that even, according to the Assessing Officer, the time to complete the Assessment, consequent to the order dated 25 th January, 2012 of the Tribunal expired on 31st March, 2012. This in terms of Section 153(2A) of the Act. In this case, the Tribunal held that the final order was passed on 12th March, 2012. Thereafter, the Assessing Officer after having become functus Officio, on 16th April, 2014 issued a corrigendum to the order dated 12th March, 2012, seeking to convert the final order of Assessment into a draft order of Assessment. This, the Tribunal found is not permissible as the corrigendum dated 16th April, 2014 was issued after the time to pass the Assessment Order, had expired. In fact, the Tribunal notes and follows the decision of the Madras High Court in similar facts in the case of Vijay Television (P) Ltd., v/s. DRP 369 ITR 113 (Mad.). In fact, in the above case, the Court held that a corrigendum issued beyond the period of limitation is a defective, thus ineffective. The impugned order also held that the Assessing Officer had failed to follow the directions of the order dated 25th January, 2012 of the Tribunal. Thus, 3 of 6 ::: Uploaded on - 07/12/2018 ::: Downloaded on - 28/12/2018 23:03:02 ::: S.R.JOSHI itxa-622-2016.odt allowed the Respondent's appeal.
10 Mr. Suresh Kumar, learned Counsel for the Appellant- Revenue urges that, this appeal requires admission. According to him, the Respondent-Assessee had accepted the corrigendum dated 16 th April, 2014, converting the final order into a draft order of Assessment. This is evident as the Respondent had filed objection to the DRP with regard to draft Assessment Order. Once it is so accepted, Mr. Suresh Kumar, submits that, it is not open to the Respondent to urge that in the absence of a final order being passed within the time limit prescribed under the statute, the order is null and void.
11 It must be noted that in respect of the procedure and determination of the ALP of International Transaction between related person, the law provides a special dispensation. In terms of Section 144C(I) of the Act, the Assessing Officer is to first pass a draft Assessment Order which is subject to challenge, by way of representation to the DRP. It is only after the DRP disposes of the representation, that the Assessing Officer passes a final order in terms of the directions of the DRP and such final order is appellable to the Tribunal. In this case, it is undisputed that on 12th March, 2014, the Assessing Officer passed a final Assessment Order in terms of the directions made by the DRP in the earlier round. The time to pass any such order, would expire in the present facts on 31 st March, 2014, however, in case a Draft Assessment Order is issued, then the time to pass a final Assessment Order gets extended to one month after the passing of the directions by the DRP in terms of Section 144C(13) of the Act. Nevertheless, the Draft Assessment Order should have in the present facts been passed before 31 st March, 2014 in terms of 4 of 6 ::: Uploaded on - 07/12/2018 ::: Downloaded on - 28/12/2018 23:03:02 ::: S.R.JOSHI itxa-622-2016.odt Section 153A(2A) of the Act. In this case, undisputedly, a final order was passed on 12th March, 2014 and is being sought to be corrected by issue of corrigendum on 16th April, 2014 i.e. after the time to pass the Draft Assessment Order has expired. In fact, the Tribunal placed reliance upon the decision of a single judge of the Madras High Court in Vijay Television (P) Ltd., (supra). This, decision has now been upheld by the Division Bench of the Madras High Court in Assistant Commissioner of Income Tax v/s. Vijay Television (P) Ltd., 407 ITR 642. In the above case, non issue of Draft Assessment Order could not be corrected by issuing a corrigendum to a final Assessment Order. Just as in the facts before the Madras High Court, here also the demand notice and institution of pending proceedings were not withdrawn by the corrigendum. Besides, in International Air Transport Association v/s. Deputy Commissioner of Income Tax 68 taxmann.com 246 - this Court has held that the Draft Assessment Order is necessary in terms of Section 144 C(1) of the Act before the Assessing Officer can proceed to pass a final Assessment Order. In the absence thereof, the order is without jurisdiction. So far the contention on behalf of the Revenue that the Respondent was estopped from challenging the corrigendum dated 16th April, 2004, as it was accepted by it and a representation also filed to the DRP. This submission overlooks the fact that there can be no estoppel on issue of law pertaining to jurisdiction. Therefore, if the corrigendum dated 16 th April, 2014 and the order dated 12th March, 2014 of the Assessing Officer is without jurisdiction, the same can be raised at any time and the principle of estoppel will not apply. Mere consent of parties does not bestow jurisdiction, if the order is beyond jurisdiction. Therefore, we do not find any substance in this objection of the Revenue. Besides, the finding of the 5 of 6 ::: Uploaded on - 07/12/2018 ::: Downloaded on - 28/12/2018 23:03:02 ::: S.R.JOSHI itxa-622-2016.odt Tribunal in the impugned order that the order of the Assessing Officer was beyond the scope of the remand by order dated 25 th January, 2012 of the Tribunal. This more particularly so as the remand by the Tribunal was occasioned on account of failure of the DRP to deal with the objections of the Respondent to the Draft Assessment Order. Therefore, making a reference again to the TPO for fixing the ALP, was not called for. Nothing has been pointed out to us which would even remotely suggest that the same is not correct.
12 Therefore, in the above view, the question as proposed, does not give rise to any substantial question of law.
13 Accordingly, Appeal dismissed. .
(M.S.SANKLECHA,J.) (AKIL KURESHI,J.)
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