Bombay High Court
Shelf Drilling J. T. Angel Limited vs Assistant Commissioner Of Income ... on 4 August, 2023
Bench: K.R. Shriram, Firdosh Phiroze Pooniwalla
2023:BHC-OS:7855-DB
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Digitally
signed by
TRUSHA
TRUSHA TUSHAR
TUSHAR MOHITE
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MOHITE Date:
2023.08.04
18:46:56
ORDINARY ORIGINAL CIVIL JURISDICTION
+0530
WRIT PETITION NO.2340 OF 2021
Shelf Drilling Ron Tappmeyer Limited,
being a company incorporated under
the laws of Cayman Island and
having its address in India at
4th Floor, Schindler House,
Main Street, Hiranandani Gardens,
Powai, Mumbai - 400 076 .... Petitioner
Versus
1. Assistant Commissioner of Income Tax,
(International Taxation),
Circle - 4(2)(1),
Mumbai, having his address at
Room No.1708, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
2. Principal Commissioner of
Income Tax
(International Taxation) - 4, Mumbai,
having his address at
Room No.1704, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
3. Union of India
Through Joint Secretary & Legal Adviser
Branch Secretariat,
Department of Legal Affairs,
Ministry of Law and Justice,
2nd Floor, Aayakar Bhavan, M.K.Road,
New Marine Lines Mumbai - 400 020 ..... Respondents
WITH
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WRIT PETITION NO.2661 OF 2021
Shelf Drilling J.T. Angel Limited,
being a company incorporated under
the laws of Cayman Island and
having its address in India at
4th Floor, Schindler House,
Main Street, Hiranandani Gardens,
Powai, Mumbai - 400 076 .... Petitioner
Versus
1. Assistant Commissioner of Income Tax,
(International Taxation),
Circle - 4(2)(1),
Mumbai, having his address at
Room No.1708, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
2. Principal Commissioner of
Income Tax
(International Taxation) - 4, Mumbai,
having his address at
Room No.1704, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
3. Union of India
Through Joint Secretary & Legal Adviser
Branch Secretariat,
Department of Legal Affairs,
Ministry of Law and Justice,
2nd Floor, Aayakar Bhavan, M.K.Road,
New Marine Lines Mumbai - 400 020 ..... Respondents
WITH
WRIT PETITION NO.3059 OF 2021
Shelf Drilling Trident XII Limited,
being a company incorporated under
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the laws of Cayman Island and
having its address in India at
4th Floor, Schindler House,
Main Street, Hiranandani Gardens,
Powai, Mumbai - 400 076 .... Petitioner
Versus
1. Assistant Commissioner of Income Tax,
(International Taxation),
Circle - 4(2)(1),
Mumbai, having his address at
Room No.1708, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
2. Principal Commissioner of
Income Tax
(International Taxation)
Circle- 4, Mumbai, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
3. Union of India
Through Joint Secretary & Legal Adviser
Branch Secretariat,
Department of Legal Affairs,
Ministry of Law and Justice,
2nd Floor, Aayakar Bhavan, M.K.Road,
New Marine Lines Mumbai - 400 020 ..... Respondents
WITH
WRIT PETITION NO.3060 OF 2021
Shelf Drilling Offshore Resources Limited II,
being a company incorporated under
the laws of Cayman Island and
having its address in India at
4th Floor, Schindler House,
Main Street, Hiranandani Gardens,
Powai, Mumbai - 400 076 .... Petitioner
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Versus
1. Assistant Commissioner of Income Tax,
(International Taxation),
Circle - 4(2)(1),
Mumbai, having his address at
Room No.1708, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
2. Principal Commissioner of
Income Tax
(International Taxation)
Circle-4, Mumbai, 17th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
3. Union of India
Through Joint Secretary & Legal Adviser
Branch Secretariat,
Department of Legal Affairs,
Ministry of Law and Justice,
2nd Floor, Aayakar Bhavan, M.K.Road,
New Marine Lines Mumbai - 400 020 ..... Respondents
Mr. J. D. Mistri, Senior Advocate a/w Mr. Nitesh Joshi i/b Mr. Atul K.
Jasani, for Petitioners.
Mr. Suresh Kumar a/w Ms.Samiksha Kanani for Respondents.
CORAM: K.R. SHRIRAM, J &
FIRDOSH P. POONIWALLA, J.
RESERVED ON: JULY 25, 2023
PRONOUNCED ON: AUGUST 4, 2023
JUDGMENT (PER K.R.SHRIRAM, J):
Writ Petition No.2661 of 2021 (A.Y. 2014-2015)
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By consent petition is taken up for final hearing at this stage of
admission.
1. Petitioner is a company incorporated under the relevant laws
of Cayman Island and headquartered in Dubai, United Arab Emirates.
Petitioner is engaged in the business of shallow water drilling for clients
engaged in the oil and gas industry. Petitioner has been filing its Return
of Income under the Income Tax Act, 1961. The petition is concerned with
Assessment Year 2014-15.
2. The parent group of Petitioner on a global basis had acquired
38 rigs from one Transocean group sometime in late 2012 for which an
Asset purchase Agreement had been executed. Pursuant to the said
agreement, Petitioner had acquired a rig by name J.T. Angel (the said rig)
which was recorded in the books of account of Petitioner at USD 13.6
million equivalent to Rs.74,22,94,527/- The said rig was already in
operation for a contract between Oil and Natural Gas Corporation (ONGC)
and Transocean Drilling Services (India) Pvt. Ltd. The said rig was on a
bareboat charter basis. The arrangement continued upto July 2013 and
from August 2013 to November 2013, the said rig was used under a
nomination contract for providing drilling services to ONGC. From
December 2013 to March 2014, the said rig required and underwent major
repairs and refurbishment at the Pipavav Defence and Offshore
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Engineering Company Limited. After the repairs and refurbishment, the
said rig was deployed for performing drilling services for ONGC upto May
2017. The agreement with ONGC was entered into by Shelf Drilling
Offshore Services (India) Pvt. Ltd. (SDOSIPL) which sub-contracted the job
work to Petitioner. During this period, Petitioner has computed its income
on presumptive basis under Section 44BB of the Income-tax Act, 1961
("the Act") for Assessment Year 2013-14 and from Assessment Years 2015-
16 till date. For Assessment year 2014-15, i.e., the year under
consideration, after fulfilling the requisite conditions in Section 44BB(3) of
the Act, Petitioner exercised the option available to it to compute its
income other than on presumptive basis under Section 44BB. Petitioner
had also maintained books of account which have been audited in
accordance with Section 44AB.
3. On 29th November 2014 Petitioner filed its Return of Income
for Assessment Year 2014-15 declaring a total loss of Rs.120,18,44,672/-.
The loss had been arrived at by exercising its option not to be assessed on
the presumptive basis of taxation as per Section 44BB(3) of the Act and
computing its income under the regular provisions of the Act. Petitioner's
Return of Income for Assessment Year 2014-15 was selected for scrutiny by
issue of notice dated 28th August 2015 under Section 143(2) of the Act. In
the course of assessment proceedings, notices were issued under Section
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142(1) of the Act along with detailed questionnaire. Petitioner submitted
its response. Respondent no.1 passed draft assessment order dated 26 th
December 2016 invoking the provisions of Section 145 of the Act and
rejected Petitioner's books of account. Despite Petitioner having exercised
its option, Petitioner's income from providing services in connection with
prospecting for or extraction or production of mineral oils has been
effectively computed under Section 44BB(1) of the Act, i.e., at 10% of its
gross receipts. Petitioner's total income accordingly, was computed at
Rs.4,34,79,980/-.
4. Petitioner filed its objections before the Dispute Resolution
Panel (DRP) against draft assessment order, in accordance with Section
144C of the Act. DRP did not accept Petitioner's case and by an order
dated 28th September 2017 gave its direction. Based on that, Respondent
no.1 passed a final assessment order dated 30 th October 2017 under
Section 143(3) read with Section 144C(13) of the Act.
5. Aggrieved by the said final assessment order, Petitioner filed
an Appeal before the Income Tax Appellate Tribunal (ITAT). Petitioner
made various submissions before the ITAT and after hearing the parties
ITAT held that Respondent no.1 and DRP erred in rejecting the books of
account of Petitioner without considering the books and other
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documentary evidences. By its order dated 4 th October 2019, disposing the
appeal, the ITAT remanded the matter to the Assessing Officer (AO) for
fresh adjudication.
6. Since the ITAT had remanded the matter back to the AO,
Petitioner, by a communication dated 5th February 2020, informed AO
about the order and requested for an early disposal of the same. This was
followed by oral requests. On 22nd February 2021, over one year later,
Petitioner was called upon by Respondent no.1 to produce the details of
contracts entered into by it and the reasons for incurring a loss during
assessment year 2014-15. Petitioner provided all documents and details
called for. By a notice dated 10 th September 2021 issued by Respondent
no.1 under Section 142(1) of the Act, Petitioner was directed to furnish
details of month-wise operational expenses and income. Petitioner
responded vide letter dated 16th September 2021. Petitioner was again
called upon to provide documents and details which Petitioner provided.
Repeated notices were issued under Section 142(1) of the Act to Petitioner
and finally Petitioner was issued a show cause notice dated 23th
September 2021 which Petitioner received at 9.42 a.m. allowing time upto
3.30 p.m. on 24th September 2021 to respond. Various allegations were
made against Petitioner including non submission of documentary
evidence to show the state of the rig at the time of purchase, genuineness
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of the cost of acquisition etc. Various other allegations including not
following accounting standard-29 or non provision of TDS details were also
made.
Petitioner replied by a letter dated 24th September 2021 and
reiterated its submissions made earlier.
7. Thereafter Respondent no.1 passed an assessment order dated
28th September 2021 and it reads like a final assessment order. Respondent
no.1, however, by a communication dated 29 th September 2021 clarified
that it was only a draft order.
8. Petitioner, to safeguard against the disability of the objections
being treated as delayed, has filed its objections on 27 th October 2021
before the DRP. In the meanwhile, Petitioner also filed this petition
challenging the impugned order dated 28th September 2021 on various
grounds. The preliminary ground is that the limitation has expired on 30 th
September 2021 under Section 153(3) of the Act read with the provisions
of the Taxation and other laws (Relaxation and Amendment of Certain
Provisions) Act, 2020 (hereinafter referred to as "the Relaxation Act") and
the Notification issued thereunder. Therefore, no final assessment order
can be passed in the present case as the same is time barred. In view
thereof, the Return of Income as filed by Petitioner should be accepted.
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9. We decided to hear the parties first on the preliminary
objection of limitation. If we are satisfied that the final assessment order
cannot be passed, we can dispose the petition with a direction to accept the
Return of Income filed by Petitioner.
10. Before we proceed further, the controversy in short between
the Department and Petitioner was under the provisions of Section 44BB of
the Act which provides for presumption basis of computation of income in
the case of non- resident assessee engaged, interalia, in the business of
providing services or facilities in connection with prospecting for or
extraction or production of mineral oils (the said business).
As per the said Section, 10% of the gross revenues as referred
to in Sub-Section(2) thereof, is regarded as income from the said business.
Sub-Section (3) thereof, enables an assessee to opt out of the said
presumptive basis of taxation provided it keeps and maintains such books
of account and other documents as required under Section 44AA(2) and
gets the same audited and furnishes a report as required under Section
44AB of the Act. In a case where the assessee has opted out of the said
provision, its income is to be computed on a net basis in accordance with
Sections 30 to 43D of the Act. It is an admitted position that Petitioner
qualifies for computation of its income on the basis of Section 44BB of the
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Act. For the year under consideration, i.e., assessment year 2014-15, it has
opted out of the said provision and has fulfilled the conditions as required
under Sub-Section (3) thereof. In the first round of proceedings, the then
Respondent No.1, referring to various aspects in the assessment order
rejected Petitioner's books of account by invoking the provisions of Section
145 of the Act. He has thereafter estimated Petitioner's income by
effectively following the computation methodology in Section 44BB(1) of
the Act. In this regard, Petitioner had filed additional evidence before the
DRP and also dealt with each and every aspect put against it by
Respondent No.1 in draft assessment order. However, the DRP upheld the
conclusion reached by Respondent No.1. On further appeal to the ITAT, it
discussed each and every aspect raised by Respondent No.1 and on several
of such issues specifically held that the view taken by Respondent No.1 and
upheld by the DRP was erroneous and unsustainable in law. The ITAT
finally held that (a) Petitioner had prepared its books of account including
financial statements in accordance with generally accepted accounting
principles; (b) that the said financial statements complied in all material
respects with the accounting standards notified under the Companies Act;
(c) that the accounts were audited which was also evident from the Tax
Audit Report furnished along with the Return of Income; (d) for the
purposes of invoking Section 145(3) of the Act the burden to show that the
books of account were incomplete or incorrect was on Respondent No.1;
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(e)Respondent No.1 and the DRP had erred in rejecting the books of
account without considering the books and other documentary evidences;
and (f) in view thereof, to provide a further opportunity to Respondent
No.1, the issue was remanded back for fresh adjudication. Despite requests
by Petitioner from 05.02.2020 to 22.02.2021, (over one year), the
proceedings for giving effect to the ITAT's Order were not taken up till
22.02.2021. After calling for certain general information which had been
complied with by Petitioner, a notice under Section 142(1) of the Act was
issued on 10.09.2021, almost seven months later. From 10.09.2021 up to
20.09.2021, four notices under Section 142(1) have been issued, i.e., on
10.09.2021, 11.09.2021, 15.09.2021 and 20.09.2021 seeking various
information and documents. The proceeding finally culminated into a
show-cause notice which was issued on 23.09.2021 (received at 3:04 pm)
directing Petitioner to file its response thereto by 3.30 pm on 24.09.2021,
i.e., in 24 hours. A bare perusal of the impugned order shows that a
substantial part of the aspects which have been found against Petitioner,
were raised on 20.09.2021 and 23.09.2021. Further, there are several
aspects which do not find any reference in the notices issued by
Respondent No.1. Finally, the impugned order dated 28.09.2021 has been
passed rejecting Petitioner's books of accounts and effectively computing
Petitioner's income based on the computation methodology provided in
Section 44BB(1), despite the fact that Petitioner had opted out from the
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same.
11. Mr. Mistri submitted that:-
(a) Limitation as provided in Section 153 is the outermost limit
provided for passing the final assessment order under the Act.
The draft assessment order, the DRP's order on the objections
raised by the assessee and the final assessment order ought to
have been passed within the said limitation, i.e., by 30 th
September 2021. Division Bench of the Hon'ble Madras High
Court has upheld this position in the case of Commissioner of
Income-tax v. Roca Bathroom Products (P) Ltd.1 [Roca-
Bathroom (DB)]. The Division Bench had confirmed the law
laid down by a learned single Judge of Madras High Court in
Roca Bathroom Products (P) Ltd. vs. Dispute Resolution Panel-
2, Bangalore 2 [Roca Bathroom (SB)]2
(b) In the present case, date of ITAT's order was 4th October 2019
when it was remanded to the Assessing Officer for denovo
consideration. The due date as per Section 153(3) read with
proviso thereto provided that the limitation to pass fresh order
pursuant to the order of ITAT would expire on 31 st March
2021, i.e., 12 months from the end of the financial year in
1 (2022) 140 taxmann.com 304 (Madras)
2 (2021) 127 taxmann.com 332 (Madars)
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which the order was received by the specified authority. In
view of the Notification no.10/2021 dated 27th February 2021
issued by the Central Board of Direct Taxes in the exercise of
the powers conferred by Sub-Section (1) of Section 3 of the
Relaxation Act and in partial modification of the earlier
Notification, the time to pass the assessment order was
extended to 30th September 2021. The date on which the draft
assessment order has been passed is 28th September 2021.
Therefore, there was no possibility of passing any final
assessment order in the present case as the matter got time
barred on 30th September 2021. As the final assessment order
has not been passed before the said date the proceedings are
rendered to be now barred by limitation. In view thereof, the
Return as filed by Petitioner should be accepted.
12. We should note that the ground of limitation was inserted by
way of an amendment on 12 th July 2022 pursuant to liberty granted by this
court on 5th July 2022. No additional reply has been filed to the amended
part.
13. Mr. Suresh Kumar submitted that the time limit given under
Section 153 (3) of the Act would be in addition to the time prescribed
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under Section 144C of the Act. The period of time limit prescribed under
Section 144C of the Act does not get subsumed in the time limit prescribed
under Section 153(3) of the Act. There is no time limit prescribed under
Section 144C(1) of the Act. Nine months is prescribed only for DRP to pass
its order under Section 144C (12) of the Act and under Section 144C(13)
of the Act one month is provided for the Assessing Officer to complete the
assessment in conformity with the directions given by the DRP. Since there
is no time limit prescribed to pass the draft assessment order under Section
144C(1) of the Act, where was the question of the assessment being
barred under Section 153(3) of the Act. It does not arise.
14. Section 144C of the Act was held to be a self-contained code by the
earlier decision of the Hon'ble Madras High Court in the case of CIT vs Sanmina
SCI India (P.) Ltd3. The finding that Section 144C of the Act is a complete code is
also there in the decision of the single judge in Roca Bathroom (SB) (Supra).
Once 144C of the Act is held to be a complete code then for all things dealt by it,
it would prevail over other provisions including Section 153 of the Act. Hence the
decision of the Hon'ble High Court that the time limit given under Section 153 of
the Act would prevail over and subsume the time limit prescribed under Section
144C of the Act is per incuriam. It is settled law that a self-contained code/
complete code takes precedence for all things dealt by it. The Hon'ble Apex Court
and High Courts have reiterated this position.
3 [2017] 85 taxmann.com 29 (Madras)
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15. The provision of Section 144C of the act with a non obstante clause
was inserted later than the incorporation of the non obstante clause in Section
153 of the Act. Thus the Legislature was aware of the non obstante clause in
Section 153 of the Act when the similar non obstante clause was inserted in
Section 144C of the Act. The later non obstante clause shall prevail over the
already existing one. Mr. Suresh Kumar did not elaborate though.
16. Section 153 of the Act is a general provision dealing with all
assessees and all types of orders as compared to Section 144C of the Act which
deals only with regard to matters pertaining to 'eligible assessees' and orders are
passed wherein assessee has choice to file objections before the DRP. Long
established jurisprudence holds, for matters covered by special provisions, the
overlapping general provisions must yield ground to the special provisions. Again
this was not elaborated.
17. It was further submitted by Mr. Suresh Kumar that one of the
ramifications of the interpretation put by the Hon'ble Madras High Court in Roca
Bathroom (DB)(Supra) that the time limit under Section 153 of the Act would
not refer to passing of draft order but to passing of the final order is that key
machinery provision becomes unworkable. The implication of the finding that the
time limits prescribed in Sections 144C of the Act and Section 153 of the Act are
mutually inclusive and would not refer to passing of draft order but to passing of
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the final order is that most of the orders passed in past years after disposal of
objections by the DRP are being held to be time barred. This is so as the
consistent understanding of officers of the Revenue as also of the Bar and
assessees before this decision was that the limit applied to draft orders and not
the final orders.
Thus such an interpretation that makes key machinery provisions become
unworkable should be rejected as assessees do not have any vested right in
procedural aspects of ongoing assessments.
18. Thus finding of the Hon'ble Madras High Court in Roca Bathroom
(DB) (Supra) that outer time limit in case of reference to TPO would be as per
Section 153 of the Act and that the entire proceedings would have to be
concluded within the time limits prescribed therein is per incuriam.
19. Before we proceed further it will be useful to reproduce
Sections 144C, 153 and said Notification under the Relaxation Act which
read thus:
"144C. Reference to dispute resolution panel.--
(1) The Assessing Officer shall, notwithstanding anything to the
contrary contained in this Act, in the first instance, forward a
draft of the proposed order of assessment (hereafter in this
section referred to as the draft order) to the eligible assessee if
he proposes to make, on or after the 1st day of October, 2009,
any variation which is prejudicial to the interest of such assessee.
(2) On receipt of the draft order, the eligible assessee shall,
within thirty days of the receipt by him of the draft order,--
(a) file his acceptance of the variations to the Assessing
Officer; or
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(b ) file his objections, if any, to such variation with,--
(i)the Dispute Resolution Panel; and
(ii)the Assessing Officer.
(3) The Assessing Officer shall complete the assessment on the
basis of the draft order, if--
(a) the assessee intimates to the Assessing Officer the
acceptance of the variation; or
(b) no objections are received within the period specified in
sub-section (2).
(4) The Assessing Officer shall, notwithstanding anything
contained in section 153 or 153B, pass the assessment order
under sub-section (3) within one month from the end of the
month in which,--
(a) the acceptance is received; or
(b) the period of filing of objections under sub-section (2)
expires.
(5) The Dispute Resolution Panel shall, in a case where any
objection is received under sub-section (2), issue such directions,
as it thinks fit, for the guidance of the Assessing Officer to enable
him to complete the assessment.
(6) The Dispute Resolution Panel shall issue the directions
referred to in sub-section (5), after considering the following,
namely:--
(a) draft order;
(b) objections filed by the assessee;
(c) evidence furnished by the assessee;
(d) report, if any, of the Assessing Officer, Valuation Officer or Transfer
Pricing Officer or any other authority;
(e) records relating to the draft order;
(f) evidence collected by, or caused to be collected by, it; and
(g) result of any enquiry made by, or caused to be made by, it.
(7) The Dispute Resolution Panel may, before issuing any directions referred
to in sub-section (5),--
(a) make such further enquiry, as it thinks fit; or
(b) cause any further enquiry to be made by any income-tax authority and
report the result of the same to it.
(8) The Dispute Resolution Panel may confirm, reduce or
enhance the variations proposed in the draft order so, however,
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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) If the members of the Dispute Resolution Panel differ in
opinion on any point, the point shall be decided according to the
opinion of the majority of the members.
(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,
complete, notwithstanding anything to the contrary contained in
section 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.
(14) *****
(15) For the purposes of this section,--
(a) *****
(b) "eligible assessee" means,--
(i) any person in whose case the variation referred to in sub-section (1)
arises as a consequence of the order of the Transfer Pricing Officer
passed under sub-section (3) of section 92CA; and
(ii) any non-resident not being a company, or any foreign company.'
Time limit for completion of assessments and reassessments and
recomputation.
153. (1) No order of assessment shall be made under section
143 or section 144 at any time after the expiry of twenty-one
months from the end of the assessment year in which the
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income was first assessable:
Provided that in respect of an order of assessment relating to
the assessment year commencing on the 1st day of April,
2018, the provisions of this sub-section shall have effect, as if
for the words "twenty-one months", the words "eighteen
months" had been substituted:
[Provided further that in respect of an order of assessment
relating to the assessment year commencing on--
(i) the 1st day of April, 2019, the provisions of this sub-
section shall have effect, as if for the words "twenty-one
months", the words "twelve months" had been substituted;
(ii) the 1st day of April, 2020, the provisions of this sub-
section shall have effect, as if for the words "twenty-one
months", the words "eighteen months" had been substituted:]
[Provided also that in respect of an order of assessment
relating to the assessment year commencing on
[***] the 1st day of April, 2021, the provisions of this sub-
section shall have effect, as if for the words "twenty-one
months", the words "nine months" had been substituted:]
[Provided also that in respect of an order of assessment
relating to the assessment year commencing on or after the
1st day of April, 2022, the provisions of this sub-section shall
have effect, as if for the words "twenty-one months", the
words "twelve months" had been substituted.]
[(1A) Notwithstanding anything contained in sub-section (1),
where a return under sub-section (8A) of section 139 is
furnished, an order of assessment under section 143 or section
144 may be made at any time before the expiry of [twelve]
months from the end of the financial year in which such
return was furnished.]
(2) No order of assessment, reassessment or recomputation
shall be made under section 147 after the expiry of nine
months from the end of the financial year in which the notice
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under section 148 was served:
Provided that where the notice under section 148 is served on
or after the 1st day of April, 2019, the provisions of this sub-
section shall have effect, as if for the words "nine months", the
words "twelve months" had been substituted.
(3) Notwithstanding anything contained in sub-sections (1) [,
(1A)] and (2), an order of fresh assessment [or fresh order
under section 92CA, as the case may be,] in pursuance of an
order under section 254 or section 263 or section 264, setting
aside or cancelling an assessment, [or an order under section
92CA, as the case may be], may be made at any time before
the expiry of nine months from the end of the financial year in
which the order under section 254 is received by the Principal
Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner or, as the case may be, the
order under section 263 or section 264 is passed by the
[Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, as the case may
be] :
Provided that where the order under section 254 is received
by the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner or, as the case may
be, the order under section 263 or section 264 is passed by the
[Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, as the case may be,]
on or after the 1st day of April, 2019, the provisions of this
sub-section shall have effect, as if for the words "nine months",
the words "twelve months" had been substituted.
[(3A) Notwithstanding anything contained in sub-sections (1),
(1A), (2) and (3), where an assessment or reassessment is
pending on the date of initiation of search under section 132
or making of requisition under section 132A, the period
available for completion of assessment or reassessment, as the
case may be, under the said sub-sections shall,--
(a) in a case where such search is initiated under section 132
or such requisition is made under section 132A;
(b) in the case of an assessee, to whom any money, bullion,
jewellery or other valuable article or thing seized or
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requisitioned belongs to;
(c) in the case of an assessee, to whom any books of account
or documents seized or requisitioned pertains or pertain to, or
any information contained therein, relates to,
be extended by twelve months.]
(4) Notwithstanding anything contained in [sub-sections (1),
(1A), (2), (3) and (3A)], where a reference under sub-section
(1) of section 92CA is made during the course of the
proceeding for the assessment or reassessment, the period
available for completion of assessment or reassessment, as the
case may be, under the said [sub-sections (1), (1A), (2), (3)
and (3A)], shall be extended by twelve months.
(5) Where effect to an order under section 250 or section 254
or section 260 or section 262 or section 263 or section 264 is
to be given by the Assessing Officer [or the Transfer Pricing
Officer, as the case may be,] wholly or partly, otherwise than
by making a fresh assessment or reassessment [or fresh order
under section 92CA, as the case may be], such effect shall be
given within a period of three months from the end of the
month in which order under section 250 or section 254 or
section 260 or section 262 is received by the Principal Chief
Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be, the order
under section 263 or section 264 is passed by the [Principal
Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be] :
Provided that where it is not possible for the Assessing Officer
[or the Transfer Pricing Officer, as the case may be,] to give
effect to such order within the aforesaid period, for reasons
beyond his control, the Principal Commissioner or
Commissioner on receipt of such request in writing from the
Assessing Officer [or the Transfer Pricing Officer, as the case
may be], if satisfied, may allow an additional period of six
months to give effect to the order:
Provided further that where an order under section 250 or
section 254 or section 260 or section 262 or section 263 or
section 264 requires verification of any issue by way of
submission of any document by the assessee or any other
person or where an opportunity of being heard is to be
provided to the assessee, the order giving effect to the said
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order under section 250 or section 254 or section 260 or
section 262 or section 263 or section 264 shall be made within
the time specified in sub-section (3).
[(5A) Where the Transfer Pricing Officer gives effect to an
order or direction under section 263 by an order under section
92CA and forwards such order to the Assessing Officer, the
Assessing Officer shall proceed to modify the order of
assessment or reassessment or recomputation, in conformity
with such order of the Transfer Pricing Officer, within two
months from the end of the month in which such order of the
Transfer Pricing Officer is received by him.]
(6) Nothing contained in sub-sections (1) [, (1A)] and (2)
shall apply to the following classes of assessments,
reassessments and recomputation which may, subject to the
provisions of 51[sub-sections (3), (5) and (5A)], be completed
--
(i) where the assessment, reassessment or recomputation is
made on the assessee or any person in consequence of or to
give effect to any finding or direction contained in an order
under section 250, section 254, section 260, section 262,
section 263, or section 264 or in an order of any court in a
proceeding otherwise than by way of appeal or reference
under this Act, on or before the expiry of twelve months from
the end of the month in which such order is received or
passed by the [Principal Chief Commissioner or Chief
Commissioner or] Principal Commissioner or Commissioner,
as the case may be; or
(ii) where, in the case of a firm, an assessment is made on a
partner of the firm in consequence of an assessment made on
the firm under section 147, on or before the expiry of twelve
months from the end of the month in which the assessment
order in the case of the firm is passed.
(7) Where effect to any order, finding or direction referred to
in sub-section (5) or sub-section (6) is to be given by the
Assessing Officer, within the time specified in the said sub-
sections, and such order has been received or passed, as the
case may be, by the income-tax authority specified therein
before the 1st day of June, 2016, the Assessing Officer shall
give effect to such order, finding or direction, or assess,
reassess or recompute the income of the assessee, on or before
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the 31st day of March, 2017.
(8) Notwithstanding anything contained in the foregoing
provisions of this section, sub-section (2) of section 153A or
sub-section (1) of section 153B, the order of assessment or
reassessment, relating to any assessment year, which stands
revived under sub-section (2) of section 153A, shall be made
within a period of one year from the end of the month of such
revival or within the period specified in this section or sub-
section (1) of section 153B, whichever is later.
(9) The provisions of this section as they stood immediately
before the commencement of the Finance Act, 2016, shall
apply to and in relation to any order of assessment,
reassessment or recomputation made before the 1st day of
June, 2016:
Provided that where a notice under sub-section (1) of section
142 or sub-section (2) of section 143 or section 148 has been
issued prior to the 1st day of June, 2016 and the assessment
or reassessment has not been completed by such date due to
exclusion of time referred to in Explanation 1, such
assessment or reassessment shall be completed in accordance
with the provisions of this section as it stood immediately
before its substitution by the Finance Act, 2016 (28 of 2016).
Explanation 1.--For the purposes of this section, in computing
the period of limitation--
(i) the time taken in reopening the whole or any part of the
proceeding or in giving an opportunity to the assessee to be
re-heard under the proviso to section 129; or
(ii) the period during which the assessment proceeding is
stayed by an order or injunction of any court; or
(iii) the period commencing from the date on which the
Assessing Officer intimates the Central Government or the
prescribed authority, the contravention of the provisions of
clause (21) or clause (22B) or clause (23A) or clause (23B) [,
under clause (i) of the first proviso] to sub-section (3) of
section 143 and ending with the date on which the copy of the
order withdrawing the approval or rescinding the notification,
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as the case may be, under those clauses is received by the
Assessing Officer; or
(iv) the period commencing from the date on which the
Assessing Officer directs the assessee to get his accounts
audited [or inventory valued] under sub-section (2A) of
section 142 and--
(a) ending with the last date on which the assessee is
required to furnish a report of such audit [or inventory
valuation] under that sub-section; or
(b) where such direction is challenged before a court, ending
with the date on which the order setting aside such direction
is received by the Principal Commissioner or Commissioner; or
(v) the period commencing from the date on which the
Assessing Officer makes a reference to the Valuation Officer
under sub-section (1) of section 142A and ending with the
date on which the report of the Valuation Officer is received
by the Assessing Officer; or
(vi) the period (not exceeding sixty days) commencing from
the date on which the Assessing Officer received the
declaration under sub-section (1) of section 158A and ending
with the date on which the order under sub-section (3) of that
section is made by him; or
(vii) in a case where an application made before the Income-
tax Settlement Commission is rejected by it or is not allowed
to be proceeded with by it, the period commencing from the
date on which an application is made before the Settlement
Commission under section 245C and ending with the date on
which the order under sub-section (1) of section 245D is
received by the Principal Commissioner or Commissioner
under sub-section (2) of that section; or
(viii) the period commencing from the date on which an
application is made before the Authority for Advance Rulings
[or before the Board for Advance Rulings] under sub-section
(1) of section 245Q and ending with the date on which the
order rejecting the application is received by the Principal
Commissioner or Commissioner under sub-section (3) of
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section 245R; or
(ix) the period commencing from the date on which an
application is made before the Authority for Advance Rulings
[or before the Board for Advance Rulings] under sub-section
(1) of section 245Q and ending with the date on which the
advance ruling pronounced by it is received by the Principal
Commissioner or Commissioner under sub-section (7) of
section 245R; or
(x) the period commencing from the date on which a
reference or first of the references for exchange of information
is made by an authority competent under an agreement
referred to in section 90 or section 90A and ending with the
date on which the information requested is last received by
the Principal Commissioner or Commissioner or a period of
one year, whichever is less; or
(xi) the period commencing from the date on which a
reference for declaration of an arrangement to be an
impermissible avoidance arrangement is received by the
Principal Commissioner or Commissioner under sub-section
(1) of section 144BA and ending on the date on which a
direction under sub-section (3) or sub-section (6) or an order
under sub-section (5) of the said section is received by the
[Assessing Officer; or
(xii) the period (not exceeding one hundred and eighty days)
commencing from the date on which a search is initiated
under section 132 or a requisition is made under section 132A
and ending on the date on which the books of account or
other documents, or any money, bullion, jewellery or other
valuable article or thing seized under section 132 or
requisitioned under section 132A, as the case may be, are
handed over to the Assessing Officer having jurisdiction over
the assessee,--
(a) in whose case such search is initiated under section 132
or such requisition is made under section 132A; or
(b) to whom any money, bullion, jewellery or other valuable
article or thing seized or requisitioned belongs to; or
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(c) to whom any books of account or documents seized or
requisitioned pertains or pertain to, or any information
contained therein, relates to; or]
[(xiii) the period commencing from the date on which the
Assessing Officer makes a reference to the Principal
Commissioner or Commissioner under the second proviso to
sub-section (3) of section 143 and ending with the date on
which the copy of the order under clause (ii) or clause (iii) of
the fifteenth proviso to clause (23C) of section 10 or clause
(ii) or clause (iii) of sub-section (4) of section 12AB, as the
case may be, is received by the Assessing Officer,]
shall be excluded:
Provided that where immediately after the exclusion of the
aforesaid period, the period of limitation referred to in sub-
sections (1), [(1A),] (2), (3) and sub-section (8) available to
the Assessing Officer for making an order of assessment,
reassessment or recomputation, as the case may be, is less
than sixty days, such remaining period shall be extended to
sixty days and the aforesaid period of limitation shall be
deemed to be extended accordingly:
Provided further that where the period available to the
Transfer Pricing Officer is extended to sixty days in
accordance with the proviso to sub-section (3A) of section
92CA and the period of limitation available to the Assessing
Officer for making an order of assessment, reassessment or
recomputation, as the case may be, is less than sixty days,
such remaining period shall be extended to sixty days and the
aforesaid period of limitation shall be deemed to be extended
accordingly:
Provided also that where a proceeding before the Settlement
Commission abates under section 245HA, the period of
limitation available under this section to the Assessing Officer
for making an order of assessment, reassessment or
recomputation, as the case may be, shall, after the exclusion
of the period under sub-section (4) of section 245HA, be not
less than one year; and where such period of limitation is less
than one year, it shall be deemed to have been extended to
one year; and for the purposes of determining the period of
limitation under sections 149, 154, 155 and 158BE and for the
purposes of payment of interest under section 244A, this
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proviso shall also apply accordingly:
[Provided also that where the assessee exercises the option to
withdraw the application under sub-section (1) of section
245M, the period of limitation available under this section to
the Assessing Officer for making an order of assessment,
reassessment or recomputation, as the case may be, shall,
after the exclusion of the period under sub-section (5) of the
said section, be not less than one year; and where such period
of limitation is less than one year, it shall be deemed to have
been extended to one year:
Provided also that for the purposes of determining the period
of limitation under sections 149, 154 and 155, and for the
purposes of payment of interest under section 244A, the
provisions of the fourth proviso shall apply accordingly.]
Explanation 2.--For the purposes of this section, where, by an
order referred to in clause (i) of sub-section (6),--
(a) any income is excluded from the total income of the
assessee for an assessment year, then, an assessment of such
income for another assessment year shall, for the purposes of
section 150 and this section, be deemed to be one made in
consequence of or to give effect to any finding or direction
contained in the said order; or
(b) any income is excluded from the total income of one
person and held to be the income of another person, then, an
assessment of such income on such other person shall, for the
purposes of section 150 and this section, be deemed to be one
made in consequence of or to give effect to any finding or
direction contained in the said order, if such other person was
given an opportunity of being heard before the said order was
passed."
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 27th February, 2021
S.O. 966(E).--In exercise of the powers conferred by sub-section
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(1) of section 3 of the Taxation and Other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020 (38 of 2020)
(hereinafter referred to as the said Act), and in partial
modification of the notification of the Government of India in
the Ministry of Finance, (Department of Revenue) No.93/2020
dated the 31st December, 2020, published in the
Gazette of India, Extraordinary, Part-II, Section 3, Sub-section
(ii), vide number S.O. 4805(E), dated the 31st December, 2020
(hereinafter referred to as the said notification), the Central
Government hereby specifies, for the purpose of sub-section (1)
of section 3 of the said Act, that,--
(A) where the specified Act is the Income-tax Act, 1961 (43 of
1961) (hereinafter referred to as the Income-tax Act) and the
completion of any action, as referred to in clause (a) of sub-
section (1) of section 3 of the said Act, relates to passing of any
order--
(a) for imposition of penalty under Chapter XXI of the
Income-tax Act, --
(i) the 29th day of June, 2021 shall be the end date of the
period during which the time limit specified in or
prescribed or notified under the Income-tax Act falls, for
the completion of such action; and
(ii) the 30th day of June, 2021 shall be the end date to
which the time limit for completion of such action shall
stand extended;
(b) for assessment or reassessment under the Income-tax Act,
and the time limit for completion of such action under section
153 or section 153B thereof, --
(i) expires on the 31st day of March, 2021 due to its
extension by the said notification, such time limit shall
stand extended to the 30th day of April, 2021;
(ii) is not covered under (i) and expires on 31st day of
March, 2021, such time limit shall stand extended to the
30th day of September, 2021;
(B) where the specified Act is the Prohibition of Benami Property
Transaction Act, 1988, (45 of 1988) (hereinafter referred to as
the Benami Act) and the completion of any action, as referred to
in clause (a) of sub-section (1) of section 3 of the said Act,
relates to issue of notice under sub-section (1) or passing of any
order under sub-section (3) of section 26 of the Benami Act,--
(i) the 30th day of June, 2021 shall be the end date of the
period during which the time limit specified in or prescribed
or notified under the Benami Act falls, for the completion of
such action; and
(ii) the 30th day of September, 2021 shall be the end date to
which the time limit for completion of such action shall stand
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extended.
20. Sub-Sections (5) to (12) of Section 144C of the Act set out the
procedure for receipt, adjudication and disposal of objections by the DRP.
Sub-Section (5) states that the DRP shall issue such directions as it thinks
fit for the guidance of the Assessing Officer in completing the assessment.
In issuing the guidelines, as per Sub-Section (6) the DRP shall take into
account the draft order, objections, evidences, reports of authorities and
records etc. Sub-Section (7) empowers the DRP to make further enquiry, if
thought necessary and Sub-Section (8) confines the power of confirmation,
rejection or enhancement of the variations proposed in the draft order.
Sub-Sections (9) and (10) state that the opinion of the majority of the
members shall prevail and that the directions of the DRP bind the Assessing
Officer. Sub-Section (11) provides for an opportunity of hearing to the
assessee prior to issuance of the directions. For disposal of the objections
received, Sub-Section (12) sets out a limitation of nine (9) months from
the end of the month in which the draft order is forwarded to the eligible
assessee. In passing a final assessment order, Sub-Section (13) specifically
excludes the provisions of Section 153 stating that the Assessing Officer
shall pass a final order of assessment even without hearing the assessee, in
conformity with the directions issued by the DRP within one month from
the end of the month when such directions were received by him.
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However, in our view, the exclusion of Section 153/153B is specific to, and
kicks in only at the stage of passing of final assessment order after
directions are received from the DRP, and not at any other stage of the
proceedings under Section 144C and hence, the entire proceedings would
have to be concluded within the time limits prescribed. Sub-Sections (14)
and (15) are not relevant for the purpose of this Writ Petition.
21. Under Section 153(1) of the Act, the assessment has to be
completed with 21 months since the assessment relates to Assessment Year
2014-15. If it was for Assessment Year commencing on 1 st April 2018 no
order of assessment shall be made under Section 143 or 144 at any time
after the expiry of 18 months from the end of the Assessment Year in
which the income was first assessable. In respect of the order of assessment
in respect of Assessment Year commencing on 1 st April 2019 the time was
reduced to 12 months. The time for Assessment Year commencing on 1 st
April 2020 was once again made to 18 months and for Assessment Year
commencing 1st April 2021 the time prescribed was 9 months. The time for
Assessment Year beginning 1st April 2022 was again made 12 months.
22. Section 153(3) of the Act, as applicable to the case at hand
provides a non obstante clause inasmuch as it states, Notwithstanding
anything contained in Sub-Sections (1), (1A) and (2), an order of fresh
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assessment in pursuance of an order under Section 254 setting aside or
cancelling an assessment, may be made at any time before the expiry of
nine months from the end of the financial year in which the order under
Section 254 is received by the Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner. Provided that
where the order under Section 254 is received by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner, as the case may be, on or after 1st April 2019, the provisions
of this Sub-Section shall have effect, as if for the words "nine months", the
words "twelve months" have been substituted. In this case, since the order
has been passed by the ITAT on 4 th October 2019, the time will be twelve
months from the end of the financial year in which the order under Section
254 was received.
The Chronology of dates and events is as under:
a. Date of ITAT order - 4th October 2019.
b. Due date as per Section 153(3) read with proviso
- 31st March 2021.
c. In view of the extension granted by the
Notification under the Relaxation Act, the extended date
would be 30th September 2021.
d. Date of passing of draft assessment order - 28 th
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September 2021.
No final order was passed until filing of the petition though stay, for
the first time, was granted by this court only on 30th March 2022.
23. No doubt, Section 144C of the Act is a self contained code of
assessment and time limits are inbuilt at each stage of the procedure
contemplated. Section 144C envisions a special assessment, one which
includes the determination of Arms Length Price (ALP) of international
transactions engaged in by the assessee. The DRP was constituted bearing
in mind the necessity for an expert body to look into intricate matters
concerning valuation and transfer pricing and it is for this reason that
specific timelines have been drawn within the framework of Section 144C
to ensure prompt and expeditious finalisation of this special assessment.
The purpose is to fast-track a special type of assessment. That cannot be
considered to mean that overall time limits prescribed have been given a
go by in the process.
24. We find it difficult to accept the submissions of Mr. Suresh
Kumar because it would in fact mean that, notwithstanding the twelve
month period prescribed under Section 153 (3) of the Act, where it says
that an order of fresh assessment in pursuance of an order under Section
254 of the Act may be made at any time before the expiry of twelve months
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from the end of the financial year in which order under Section 254 of the
Act is received by the Commissioner, would not apply to a case where
Section 144C of the Act is applicable. It would also mean that the time
prescribed in Section 153 (1) of the Act cannot apply where Section 144C
of the Act is applicable in the case of an eligible assessee. If Mr. Suresh
Kumar was correct, then in our view, it would have been specifically so
provided in Section 153 of the Act. We would agree with Mr. Mistri that
wherever the legislature intended extra time to be provided, it is expressly
provided in Section 153 of the Act. Sub-Section (3) of Section 153 of the
Act also applies to fresh order under Section 92 CA of the Act being passed
in pursuance to an order under Section 254 of the Act. Sub-Section (4) of
Section 153 of the Act specifically provides that notwithstanding anything
contained in Sub-Sections (1), (1-A), (2), (3) and (3-A) of the Act, where a
reference under Sub-Section (1) of Section 92 CA of the Act is made during
the course of the proceeding for assessment or re-assessment, the period
available for completion of assessment or re-assessment, as the case may
be, under the said Sub-Sections (1), (1-A), (2), (3) and (3-A) of the Act
shall be extended by twelve months.
25. Moreover, Explanation-1 below Section 153 of the Act also
provides for the periods which have to be excluded while computing the
twelve months period mentioned in Section 153 (3) of the Act. For
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example - it provides for exclusion of the period commencing from the
date on which the Assessing Officer directs the assessee to get his accounts
audited or inventory valued under Sub-Section (2-A) of Section 142 of the
Act or in a case where an application made before the Income Tax
Settlement Commission is rejected by it or is not allowed to be proceeded
with by it, the period commencing from the date on which an application
was made before the Settlement Commission and ending with the date on
which the order is received by the Principal Commissioner or
Commissioner or where the period commencing from the date on which an
application is made before the Authority for Advance Rulings or before the
Board for Advance Rulings under Sub-Section 1 of Section 245Q of the Act
and ending with the date on which the Advance Ruling pronounced by it
is received by the Commissioner or where reference for exchange for
information is made by an authority competent under an agreement
referred to in Section 90 or Section 90-A of the Act or where a reference
for declaration of an arrangement to be an impermissible avoidance
arrangement is received by the Principal Commissioner etc., shall be
excluded. There is no mention anywhere about Section 144C of the Act.
26. If we accept the submissions of Shri Suresh Kumar that when
there is a remand as in this case, the AO is unfettered by limitation, it
would run counter to the avowed object of provisions that were
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considered while framing the provisions of Section 144C of the Act. Having
set time limits every step of the way, it does not stand to reason that
proceedings on remand to the AO may be done at leisure sans the
imposition of any time limit at all.
27. Having considered the language of Section 144C and 153, we
cannot accept that the provisions of Section 153 are excluded to the
operation of Section 144C.
28. Mr. Mistri, therefore, is correct in his submissions that the time
limit prescribed under Section 153 of the Act would prevail over and above
the assessment time limit prescribed under Section 144C of the Act. This is
because the Assessing Officer may follow the procedure prescribed under
Section 144C of the Act, if he deems fit necessary but then the entire
procedure has to be commenced and concluded within the twelve months
period provided under Section 153 (3) of the Act. This is because, the
procedure under Section 144C(1) of the Act also has to be followed by the
Assessing Officer only if he proposes to make any variation which is
prejudicial to the interest of the eligible assessee. If the Assessing Officer
did not wish to make any variation which is prejudicial to the interest of
the eligible assessee, he need not go through the procedure prescribed
under Section 144C of the Act.
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29. In our view, the assessment has to be concluded within twelve
months as provided in Section 153(3) of the Act when there has been
remand to the AO by the ITAT under Section 254 of the Act. Within this
twelve months prescribed, the AO has to ensure that the entire procedure
prescribed under Section 144C is completed and pass a final assessment
order. For this the AO has to be prompt in passing an order contemplated
under Section 144C(1) of the Act and not wait to be reminded like in this
case and still take almost two years to start the process. Sub-Section (13)
of Section 144C provides that an assessment officer shall, upon receipt of
the directions, issued under Sub-Section (5), in conformity with the
directions 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. What is contemplated under Section
144C (13) is the passing of the final assessment order. Twelve months as
provided under Section 153(3) would start from the end of the financial
year in which the Principal Commissioner received the order under Section
254 from the ITAT. The assessing officer should have taken steps to pass
the final order under Sub-Section (13) of Section 144C within 12 months
period.
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30. The exclusion of applicability of Section 153, in so far as non-
obstante clause in Sub-Section (13) of Section 144C is concerned, it is for
limited purpose to ensure that dehors larger time available, an order based
on the directions of the DRP has to be passed within 30 days from the end
of the receipt of such directions. The Section and Sub-Section have to be
read as a whole with connected provisions to decipher the meaning and
intentions.
31. We would also observe that a similar non-obstante clause is
also used in Section 144C(4) of the Act with the same limited purpose to
imply, even though there might be a larger time limit under Section 153,
once the matter is remanded to AO by the ITAT under Section 254, the
process to pass final order under Section 144C has to be taken
immediately.
32. The object is to conclude the proceedings as expeditiously as
possible. There is a limit prescribed under the statute for the AO and
therefore, it is his duty to pass an order in time. After 30 th September
2021, the AO will have no authority to pass any final assessment order in
this Case.
33. We cannot accept the submissions of Shri Suresh Kumar that
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passing of draft assessment order before 30 th September 2021 would
suffice. We find support for this view in Roca Bathroom (SB) (Supra) and
Roca Bathroom (DB) (Supra).
34. In the circumstances, since no final assessment order can be
passed in the present case as the same is time barred, the Return of Income
as filed by Petitioner be accepted. This would however, not preclude the
Revenue from taking any other steps in accordance with law.
35. Petition disposed. No order as to costs.
Writ Petition No. 2340 of 2021 (A.Y. 2014-15)
36. Since the facts, dates, issues and the grounds of challenge
which arise are the same as in Writ Petition No.2661 of 2021 and the
major ground of challenge is that the final assessment order has to be
passed within the period of limitation as provided in Section 153 of the Act
even if the provisions of Section 144C of the Act are applicable, the
findings in Writ Petition No.2661 of 2021 would squarely apply in this
Petition also. Petition accordingly disposed in the same terms, i.e., since no
final assessment order can be passed as the same is time barred, the Return
of Income as filed by Petitioner be accepted. This would, however, not
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preclude the Revenue from taking any other steps in accordance with law.
Writ Petition Nos.3059 of 2021 and 3060 of 2021- Both for A.Y. 2018-19)
37. These Writ Petitions are almost identical to the above Writ
Petitions, except that the name of the Petitioners and assessment years are
different. All belong to the same group. Here also the same major ground
of challenge arises, viz, that the final assessment order of assessment has to
be passed within the period of limitation set out in Section 153 of the Act
even if the provisions of Section 144C of the Act are applicable. The only
difference in these two Petitions is that in these cases it was the original
order of assessment which was required to be passed within the period of
limitation set out in Section 153 of the Act. As the original assessment
orders are in question, the period of limitation required to be adhered to is
Section 153(1) of the Act. The applicable Assessment Year being A.Y.
2018-19, the due date as per Section 153(1) was eighteen (18) months
from the end of the Assessment Year. The original due date, therefore,
would be 30th September 2020. But in view of the extention given by virtue
of the Relaxation Act, any due date of assessment proceedings falling
between 20th March 2020 and 31st December 2020 was extended to 31 st
March 2021. As per Notifications No. 10/2021 dated 27 th February 2021,
No. 38/2021 dated 27th April 2021 and No. 74/2021 dated 25 th June
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2021, time was extended to 30th April 2021, 30th June 2021 and finally to
30th September 2021, respectively. Hence, the conclusion arrived in Writ
Petition Nos.2340 of 2021 and 2661 of 2021 will squarely apply to these
Writ Petitions as well. There is no difference in the legal principle falling
for consideration in these two Petitions and Writ Petition No. 2661 of 2021
and Writ Petition No. 2340 of 2021. The limitation of Writ Petition 2661 of
2021 and Writ Petition No. 2340 of 2021 is provided in Section 153(3) of
the Act. In these two Petitions, it is provided in Section 153(1) of the Act
as the Assessing Officer is seeking to pass the assessment order under
Section 143(3) of the Act for the first time. As the date of passing draft
assessment order under Section 144C was itself 28 th September 2021, no
final assessment order can be passed in these Petitions also as the same is
time barred. The Return of Income filed by Petitioners be accepted. This
would, however, not preclude the Revenue from taking any other steps in
accordance with law.
38. Petitions disposed accordingly. No order as to costs.
(FIRDOSH P.POONIWALLA, J.) (K.R. SHRIRAM, J.)
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