ADIT, (INTERNATIONAL TAXATION)-2, HYDERABAD V. RAPISCAN SYSTEMS INC, UNITED STATES

MA 62/HYD/2024

AI Insights

The case involves the Deputy Commissioner of Income Tax (Intl. Taxn)-2, Hyderabad, as the appellant, and Rapsican Systems Inc., US, as the respondent. The core issue was the correct date of receipt of the DRP's directions by the Assessing Officer, which impacted the limitation period for passing the assessment order. The Revenue contended that the directions were received on 05/07/2022, post their actual upload on 05/07/2022, while the Tribunal and the respondent argued for 30/06/2022, the date of upload. The Tribunal dismissed the Revenue's MAs, adhering to the precedent that once DRP directions are uploaded, they are considered received by the Assessing Officer on that date.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46523 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2019-2020
• Other Referred Cases: Rapiscans Systems Pvt.Limited vs. ADIT(Int.Tax)-2, Louis Dreyfus Company India Private Limited v. Deputy Commissioner of Income Tax, Vodafone Idea Ltd. v. Central Processing Centre, Taeyang Metal India (P.) Ltd. v. Deputy Commissioner of Income Tax
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: NAGESWAR RAO

Judgement Text

"आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Manjunatha G. Accountant Member and Shri K.Narasimha Chary, Judicial Member M.A No.61 & 62/Hyd/2024 (Arising out of I.T.A.No.587 & 588/Hyd/2022) (नििाारण वर्ा/Assessment Year: 2018-19 & 2019-20) Dy.Commissioner of Income Tax (Intl.Taxn)-2 Hyderabad Vs. Rapsican Systems Inc., US C/o Ernst & Young LLP – Hyderabad [PAN : AAICR8337E] अपीलार्थी / Appellant प्रत्‍ यर्थी / Respondent निर्ाारिती द्वािा/Assessee by: Shri Nageswar Rao, AR िाजस्‍ व द्वािा/Revenue by: Dr.Sachin Kumar, DR सुिवाई की तािीख/Date of hearing: 10/03/2025 घोषणा की तािीख/Pronouncement on: 18/03/2025 आदेश / ORDER PER K.NARASIMHA CHARY, J.M. These Miscellaneous Applications were filed by the Revenue to recall the order dated 23/07/2024 on the ground that though the directions of the Dispute Resolution Panel (“the DRP”) were issued on 30/06/2022, the same were uploaded to the portal on 05/07/2022, but as a matter of fact, based on the letter dated 30/01/2024, issued by the Secretary, DRP-1, Bangalore to the effect that such directions were uploaded on 30/06/2022, the Tribunal received such date as the date of upload and receipt of such directions by the learned Assessing Officer on that day. 2. Learned DR submitted that the learned Assessing Officer received the directions on 05/07/2022, but not on 30/06/2022 and therefore, the final assessment 2 order, that was passed on 29/08/2022 was well within limitation. Learned DR further submitted that based on the letter dated 30/01/2024 of the Secretary, DRP, the Tribunal took the date of service as 30/06/2022, consequently, the time for passing the assessment order is on 31/07/2022 and held that the assessment order that was passed on 29/08/2022 was barred by limitation. According to the learned DR, this is the factual error committed by the Tribunal, necessitating to recall the order dated 23/07/2024 in ITA No.587 & 588/Hyd/2022. 3. Per contra, learned AR submitted that the Revenue failed to explain as to how the letter dated 30/01/2024 was incorrect and did not explain the discrepancy as to the date of the upload of the DRP directions, whether it is really on 30/06/2022 or 05/07/2022 and without explaining this discrepancy, it is not open for the Revenue to contend that the upload of the directions was only on 05/07/2022 and consequently, the assessment order dated 29/08/2022 was well within time. 4. We have gone through the record, in the light of the submissions made on either side. In the MA itself, the Deputy Commissioner of Income Tax (IT)-2, Hyderabad (i/c) stated that during the appellate proceedings, the assessee produced letter dated 30/01/2024 on 10/07/2024 issued by the Secretary, DRP-1, Bangalore, such letter was issued to the assessee though not required to be done so, and the basis on which such letter was issued is not clear. When the Revenue itself is unable to explain with evidence as to which date is correct and that the discrepancy occurred, we find it difficult to take the upload date as 05/07/2022 as gospel truth, because it is only in explanation the truth lies. Letter dated 30/01/2024 is issued by a responsible officer and no material is produced before us by the Revenue to discard this letter and on the other hand, Revenue pleads that it is unclear as to what forms the basis for this letter. Revenue should have investigated into this matter and explained the reasons for this discrepancy to impeach evidentiary value of the letter dated 30/01/2024. 5. Learned AR placed reliance on the decision of the Hon’ble jurisdictional High Court in the case of Rapiscan Systems Pvt.Limited vs. ADIT(Int.Tax)-2 in Writ Petition Nos.44891 to 44915 of 2022, wherein, reference was made to the Hon’ble Delhi High Court in the cases of Louis Dreyfus Company India Private Limited v. Deputy Commissioner of Income Tax, Hon’ble Bombay High Court in the case of Vodafone Idea Ltd. v. Central Processing Centre and Hon’ble Madras High Court in the case of Taeyang Metal India (P.) Ltd. v. Deputy Commissioner of Income Tax and observed that although, Delhi, Bombay and Madras High Courts have already taken a view and we respectfully 3 agree with that once such directions of DRP are uploaded on the portal, the DRP lost control over it and date on which it entered the portal, the recipient, i.e., the assessing officer comes to know about it. Hon’ble jurisdictional High Court proceeded to hold that the moment the DRP / originator had lost control over it on the date and time the said directions were uploaded on the portal, same must be treated to be a ‘receipt’ by the recipient i.e., the assessing officer on the same day i.e. 30/06/2022. In these circumstances, respectfully following the binding precedent of the Hon’ble jurisdictional High Court in the case of Rapiscan Systems Pvt.Limited, we hold that the MAs are devoid of merits and they are liable to be dismissed. 5. In the result, MAs filed by the Revenue are dismissed. Order pronounced in the open court on this 18th day of March, 2025. Sd/- Sd/- (MANJUNATHA G.) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 18/03/2025 L.Rama, SPS Copy forwarded to: 1. RAPISCAN Systems Inc, C/o ERNST & YOUNG LLP, The Skyview 10, 18th Floor, Zone A, Survey No.83/1, Naidurgam, Hyderabad 2. The ADIT, International Taxation-2, Aayakar Bhavan, Basheerbagh, Hyderabad 3. The CIT(DRP)-1, Kendriya Sadan, 4th Floor, C Wing, Bengaluru - 560034 4. The Director of Income Tax (IT &TP), Hyderabad 5. The DR, ITAT Benches, Hyderabad 6. GUARD File TRUE COPY SENIOR PRIVATE SECRETARY ITAT, HYDERABAD "