Madras High Court
M/S Cholamandalam Ms General Insurance ... vs National Faceless Assessment Centre on 24 April, 2025
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
W.P.No.6799 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.04.2025
CORAM
The HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY
Writ Petition No.6799 of 2024
and
W.M.P.Nos.7589 & 7590 of 2024
M/s Cholamandalam MS General Insurance Company Limited
Represented by its Chief Financial Officer,
Mr. Venugopalan - Age 59 years
Dare House, II Floor, No.2,
N.S.C. Bose Road, Parrys,
Chennai - 600 001.
PAN : AABCC6633K ...Petitioner
Vs.
1. National Faceless Assessment Centre,
Assessment Unit, Income Tax Department,
Ministry of Finance, Room No.401,
2nd Floor, E-Ramp, Jawaharlal Nehru Stadium,
Delhi - 110 003.
2. Deputy Commissioner of Income - Tax,
Non-Corp. Circle 8 (1),
Annexe Building - V Floor,
Aayakar Bhawan, No.121,
Mahatma Gandhi Road,
Nungambakkam, Chennai,
Tamil Nadu - 600 034.
...Respondents
1/12
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W.P.No.6799 of 2024
Writ Petition filed under Article 226 of the Constitution of India, for
issuance of Writ of Certiorari to call for the records in DIN
No.ITBA/AST/S/143(3)/2023-24/1061144222(1) dated 19.02.2024 issued
under section 143 (3) read with section 144C(3) read with section 144B of
the Income - tax Act 1961 on the file of the Respondent No.1 for the
Assessment year 2021-22 and quash the same as without jurisdiction and
barred by limitation.
For Petitioner : Mr.Sandeep Bagmar R
For Respondents : Mr. V.Mahalingam,
Senior Standing Counsel
Mr. S. Premalatha,
Junior Standing Counsel
Mr.S.Rajasekar,
Junior Standing Counsel
***
ORDER
The challenge in this Writ Petition is to the order dated 19.02.2024
passed by the respondent under Section 143 (3) read with Section 144B of
the Income Tax Act 1961 (in short 'the Act') for the Assessment Year 2023-
24, on the ground that the same is illegal, without jurisdiction and being
barred by limitation.
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2. The case of the petitioner in brief is as follows:
(i) The petitioner is a General Insurance company. The petitioner
filed its Return of Income electronically on 22.02.2022 for the Assessment
Year (AY) 2021-22, declaring a total income of INR 5,16,59,82,810/-. The
petitioner's case was selected for scrutiny and a notice under Section 143 (2)
of the Act dated 28.06.2022 was issued by the respondent to the petitioner
for initiation of scrutiny assessment. The respondent referred the
petitioner's case to the Transfer Pricing Officer (TPO) vide communication
dt. 26.10.2022 for determination of arm's length price of the international
transactions of the petitioner with its associated enterprises ('Aes') and the
said officer passed an order dated 21.10.2023 under Section 92CA(3) of the
Act and did not propose any variation whatsoever to the petitioner's income.
The 1st respondent issued notice under section 142 (1) of the Act on various
dates, which was duly responded to by the petitioner.
(ii) A Show Cause Notice dated 06.11.2023 was issued to the
petitioner to show cause as to why the adjustments proposed in the said
notice be not carried out to the returned income for the Assessment Year
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2021-22. In response to the same, the petitioner submitted its reply dated
10.11.2023 and attended the Virtual Hearing held on 23.11.2023. The
respondent passed a draft assessment order under Section 144C(1) of the
Act on 11.12.2023 asking the Assessee to respond with the acceptance of
variations or file its objections before the Dispute Resolution Panel within a
period of 30 days. The petitioner filed its submissions vide letter dated
04.01.2024 before the first respondent. The petitioner neither accepted the
draft order nor filed any objections before the DRP as it is not an " eligible
assessee" within the meaning of section 144C. The respondent passed the
final assessment order under Section 143 (3) read with section 144C(3) read
with Section 144B of the Act dated 19.02.2024 ("Impugned order")
whereby various additions were made to the returned income of the
petitioner. Challenging the same, the present writ petition has been filed.
2. The learned counsel for the petitioner would submit that as the
TPO, in his order dated 21.10.2023, did not propose any variations to the
international transactions entered into by the petitioner, on a plain reading
of Section 144C(1) of the Act read with Section 144C(15)(b), it is evident
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that the petitioner is not an "eligible assessee" and consequently, the
provisions of Section 144C of the Act shall not apply for Assessment Year
2021-22. Hence, the first respondent has erroneously assumed jurisdiction
under Section 144C by passing a draft assessment order under section
144C(1) of the Act.
3. By referring to Section 153(1) of the Act, he would submit that
in the case on hand, the assessment started on 31.03.2022 and normally the
period for limitation for assessment is nine months from the end of the
relevant assessment year i.e., 2021-2022, as per the aforesaid provision,
which ends on 31.12.2022. From the said date, the respondent ought to
have passed the Assessment Order under Section 143(3) of the Act on or
before 31.12.2022. In the case on hand, the matter was referred to Transfer
Pricing Officer in terms of Section 92CA (3) of the Act on 26.10.2022, who
subsequently passed an order under Section 92CA(3) on 21.10.2023. He
further submitted that if a reference is made to the Transfer Pricing Officer
u/s. 92CA of the Act, then the time is extended by a further period of 12
months, which ends on 31.12.2023. As per section 153(1) read with section
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153(4) of the Act, the respondent is statutorily required to pass the final
assessment order within a period of 21 months (9 months plus 12 months)
from the end of the relevant assessment year, i.e., on or before 31.12.2023.
Since the final Assessment order was passed by the respondent only on
19.02.2024, the same is without jurisdiction and barred by limitation.
4. It is further contented that totally there are two issues one is
Disallowance of provisions on account of IBNR & IBNER claims charged
to profit and loss account and the other issue is with regard to disallowance
of penalty payment. As far as the 1st issue is concerned, for the earlier
assessment years, this Court has already passed a Judgment on 16.04.2025
in T.C.A.Nos.755,855 of 2018, 49, 51 and 52 of 2023, in favour of the
petitioner. As far as other issue is concerned, the petitioner has already
remitted 25,00,000/- . Therefore, he would submit that the petitioner will
not press for the refund of the said amount even if the impugned order is
quashed. He therefore prays to set aside the impugned order.
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5. On the other hand, Mr.V.Mahalingam, learned Senior Standing
Counsel for the respondents would submit that there was no variations in
the order passed by the Transfer Pricing Officer and since there was no
variations in the said order, the petitioner is not an “eligible assessee”.
However, he would submit that the order impugned herein is beyond the
period the period of limitation and in the event, if this Court is inclined to
allow the Writ petition, by setting aside the assessment order, since the
petitioner has already remitted a sum of Rs.25,00,000/- the same may be
retained.
6. In reply, the learned counsel for the petitioner would submit that
the petitioner will not claim for the refund of a sum of Rs.25,00,000/- which
was already remitted by him and his statement may also be recorded.
7. I have given due consideration to the submission made by the
learned counsel appearing on either side and perused the materials available
on record.
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8. This Court find force in the submission made by the learned
counsel for the petitioner.
9. In the present case, there was no variations proposed in the
assessment order by the assessing officer. Thus, the assesee is not an
eligible assessee in terms of provisions of Section 144C(15)(b) of the Act.
The issue pertains to Assessment Year 2021-2022. The assessment started
on 31.03.2022 and referred to the Transfer Pricing Officer (TPO) under
Section 92CA of the Act.
10. The Transfer Pricing Officer had passed an order on 21.10.2023.
As per Section 153(1) of the Act, in the normal course, the time limit for
completion of the assessment would be nine months from the end of the
relevant assessment year (2021-2022) which ends on 31.12.2022.
11. In the present case, since the matter was referred to Transfer
Pricing Officer the time was extended by a further period of 12 months,
which ends on 31.12.2023. Therefore, if the assessee is not an “eligible
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assessee” under Section 144C(15)(b), then the assessment for the
Assessment Year 2021-2022 have to be completed on or before 31.12.2023,
but the assessment order was passed on 19.12.2024, i.e., beyond the period
of limitation prescribed under the Act under Section 153 (1) of the Act.
Thus, the impugned order was passed beyond the period of limitation. Any
order passed beyond the limitation is not sustainable and is liable to be set
aside.
12. Accordingly, the impugned order is quashed. While quashing
the impugned order, it is made clear that since the petitioner made a
submission that they will not claim refund of a sum of Rs.25 lakhs which
was already deposited by the petitioner and retained by the respondents, the
petitioner is not entitled for the said amount.
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13. In the result, this writ petition is disposed of. The order impugned
herein is set aside to the extent indicated above. No costs. Consequently,
connected Miscellaneous Petitions are closed.
24.04.2025
Index : Yes / No
Neutral Citation : Yes / No
Speaking Order : Yes / No
arr
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To
1. National Faceless Assessment Centre,
Assessment Unit, Income Tax Department,
Ministry of Finance, Room No.401,
2nd Floor, E-Ramp, Jawaharlal Nehru Stadium,
Delhi - 110 003.
2. Deputy Commissioner of Income - Tax,
Non-Corp. Circle 8 (1),
Annexe Building - V Floor,
Aayakar Bhawan, No.121,
Mahatma Gandhi Road,
Nungambakkam, Chennai,
Tamil Nadu - 600 034.
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KRISHNAN RAMASAMY, J.
arr
and
W.M.P.Nos.7589 & 7590 of 2024
24.04.2025
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