ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 6(3), MUMBAI V. UPL LIMITED, MUMBAI

ITA 4436/MUM/2025

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The case involves UPL Limited, which was subjected to a search and seizure operation under section 132 of the Income Tax Act. Following this, UPL approached the ITSC for settlement of its tax liabilities for several assessment years, including 2014-15 and 2015-16. The ITSC accepted UPL's application and passed an order under section 245D(4), which was not challenged by the department. However, the assessing officer later reopened the assessments for the years 2014-15 and 2015-16 under section 153A, leading to additional assessments. UPL contested these actions, leading to the appeals before the CIT(A) and subsequently the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790981 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2014-2015
• Appeal Filed On: 08-07-2025
• Other Referred Cases: Omaxe Ltd. vs DCIT, Komalkant Faikirchand Sharma vs DCIT, Orchid Infrastructure Developers (P) Ltd. vs PCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PANKAJ KUMAR
• Assessee Lawyers: VASANTI PATEL; GAJENDRA; ISSUING NOTICE UNDER SECTION A DATED
• Keywords: Transfer pricing; Rule of consistency; Search and seizure; Competent authority
• Section: 143(3); 132; 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER& SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 4436/MUM/2025 (AY: 2014-15) ITA No. 4437/MUM/2025 (AY: 2015-16) (Physical hearing) ACIT, Central Circle – 6(3), Mumbai Room No. 450, 4th Floor, Kautilya Bhavan, Bandra Kurla Complex, Mumbai – 400051. Vs UPL Limited Uniphos House, CD Marg, 11th Road, Near Madhu Park, Khar West, Khar Delivery S.O. Mumbai-400052. [PAN: AABCS1698G] Appellant / Revenue Respondent / Assessee C.O. No. 230/MUM/2025 (AY: 2014-15) (Arising out of ITA No. 4436/Mum/2025) UPL Limited Uniphos House, CD Marg, 11th Road, Near Madhu Park, Khar West, Khar Delivery S.O. Mumbai-400052. [PAN: AABCS1698G] Vs ACIT, Central Circle – 6(3), Mumbai Room No. 450, 4th Floor, Kautilya Bhavan, Bandra Kurla Complex, Mumbai – 400051. Appellant / Assessee Respondent / Assessee Assessee by Shri Ms. Vasanti Patel & Mr. Gajendra Jain Revenue by Shri Pankaj Kumar, CIT-DR Date of institution of appeal Date of hearing 20.08.2025 10.12.2025 Date of pronouncement 10.12.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. These two appeals by Revenue for A.Y. 2014-15 & 2015-16 and one cross- objection by assessee in A.Y. 2014-15 are directed against the separate orders of ld. CIT(A) both dated 15.04.2025. In both the appeals, the Revenue has raised similar ground of appeal; facts in both the years are almost similar. Thus, with the consent of parties both the appeals and Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 2 cross-objection of assessee were clubbed, heard together and are decided by common order to avoid the conflicting decision. For appreciation of fact, fact in A.Y. 2014-15 in ITA No. 4436/M/2025 is treated as lead case. The revenue has raised following grounds of appeal: “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the order u/s 143(3) r..s. 153A without appreciating the fact that the assessee's contention about the Validity of order u/s 143(3) r.w.s. 153A has already been disposed off by the assessing officer vide speaking order dated 14.12.2020 with detailed explanation. 2. Whether on the facts and circumstances of the case and in law, the Ld CII(A) erred in not appreciating the fact that the the provisions of section 153A gives power to the assessing officer to issue notice requiring the assessee to file return of income in case where search and seizure action u/s 132 of the Act has been conducted, without carving out any exception to cases covered by the Order of Settlement Commission.? 3. \"Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the order u/s 143(3) r.w.s. 153Awithout giving a factual finding that the additions made by the A.O. are covered by the Order of the Hon. Settlement Commission u/s.245 D(4), as stated in Section 245-1 of the Act. 4. Your appellant craves leave to add, alter or amend any of the Grounds of appeal.” 2. On service of memorandum of appeal, the assessee filed its cross- objection raising following grounds of appeal: “On the facts and in the circumstances of the case and in law, the Respondent prays that the assessment order passed without allotting DIN and without providing any reason for issuance of manual assessment order without DIN is contravention of Circular No. 19 of 2019 dated 14 August 2019 and such order ought to be deemed to have been never issued and quashed as null and void. The respondent craves leave to add, alter, delete or modify all or any of the above grounds of cross-objections.” Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 3 3. Perusal of record shows that impugned order was passed by ld. CIT(A) on 15.04.2025, and the appeal is filed by Revenue / Assessing Officer on 08.07.2025 and, thus, there is a delay of 8 days in filing appeal. The assessing officer has filed an application for condonation of delay. In the application for condonation of delay, the assessing officer has stated that approval of competent authority for filing appeal was received only on 08.07.2025. The delay is not intentional and no prejudice is likely to cause to the respondent assessee, if delay in filing appeal is allowed. The learned Commissioner of Income Tax – Departmental Representative (ld. CIT-DR) for the Revenue made his submission as per the contents of application for condonation of delay. 4. On the other hand, learned Authorised Representative (ld. AR) of the assessee has not opposed the plea of ld. CIT-DR for revenue. Considering the contention of both the representatives and the fact that there is a delay of 8 days only. The delay is not intentional and it was due to administrative reasons in getting approval of competent authority. Hence, the delay in filing appeal is condoned. Now, adverting to merits of the case. 5. Brief facts of the case are that assessee-company engaged in trading of fertilizers, chemicals, agro based products. A search action was carried out on assessee group on 22.01.2020. Consequent upon search action, the assessee approached the Income Tax Settlement Commission (ITSC). The assessee filed application under section 245C(1) on 27.04.2016 for settlement of tax liability for A.Y. 2007-08 to 2015-16. The scrutiny Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 4 assessment for A.Y. 2014-15 and 2015-16 was pending before assessing officer, when the assessee approached ITSC. The application of assessee was accepted by ITSC and final order dated 13.10.2017 was passed under section 245D(4). While giving effect to the order of Income Tax Settlement Commission, the assessment order was passed by assessing officer vide order dated 13.11.20217 in accepting income of assessee at Rs. 381.06 Crore, which was offered before ITSC. Subsequently, the assessing officer reopened the case of assessee by issuing notice under section 153A dated 20.10.2020. The assessing officer completed assessment under section 143(3) r.w.s. 144C / 153A on 04.10.2021. The assessing officer while passing the assessment order made addition on account of Transfer Pricing adjustment of Rs. 99.65 crores and disallowance under section 35(2AB) of Rs. 6.36 crores. 6. Aggrieved by the action of assessing officer, the assessee filed appeal before ld. CIT(A). Before ld. CIT(A) filed factual and legal submission. In the factual submission, the assessee submitted that the subject assessment year has attained finality after accepting the application of assessee by ITSC in its order dated 13.10.2017. The assessing officer while giving effect to the order of ITSC determined the total income of assessee at Rs. 381.06 crores. The order of Income Tax Settlement Commission has not been challenged by department. As per provision of section 244-I, no assessment shall be made in respect of assessment year, which were concluded by the order of ITSC. The assessee also relied on the decision of Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 5 Delhi High Court in Omaxe Ltd. vs DCIT (2014) 46 taxmann.com 14 (Delhi). 7. The ld. CIT(A) on considering the contents of assessment order, ground of appeal and the submission of assessee held that the case of assessee cannot be reassessed under section 153A as the ITSC has accepted the application of assessee and passed order under section 245D(4). The ld CIT(A) also relied on the decision of Delhi High Court in Omaxe Ltd. vs DCIT (supra). Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal before Tribunal. On service of notice of appeal, the assessee has filed its cross-objection raising the grounds against not mentioning Document Identification Number (DIN) of assessment order. 8. We have heard rival submissions of both the parties and gone through the orders of lower authority carefully. The ld. CIT-DR for the Revenue submits that case of assessee was reopened on the other issue which were not the subject matter before ITSC. The objection raised by assessee was disposed of by assessing officer in a speaking order dated 14.12.2020, copy of which is placed on record. The ld. CIT(A) quashed the assessment order in accepting the submission of assessee that impugned assessment year was subject matter of settlement before ITSC. 9. On the other hand, the ld. AR of the assessee submits that once the application of assessee under section 245C(1) is accepted and order under section 245D(4) is passed, the assessing officer has no jurisdiction to reassess the income of assessee qua the subject assessment year. The ITSC accepted the application of assessee only on obtaining report of Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 6 assessing officer through jurisdictional Pr. CIT. The grievance if any with the department or the assessing officer to move under section 245D(6) or to approach High Court for quashing such settlement order. Once, issue relating to impugned assessment year has been settled by ITSC, the assessing officer passed the order giving effect in accepting the contents of order of ITSC, which now attained the finality. The assessing officer exceeded his jurisdiction. To support his submission, the ld. AR of the assessee relied upon the following case laws:  Omaxe Ltd. vs ACIT 25 taxmann.com 190 (Delhi)  Komalkant Faikirchand Sharma vs DCIT (32019) 108 taxmann.com 50 (Gujarat)  Orchid Infrastructure Developers (P) Ltd. vs PCIT (2024) 161 taxmann.com 673 (Delhi)” 10.We have considered the rival submissions of both the parties and have gone through the orders of lower authority carefully. We have also deliberated on various case laws relied by ld. AR of the assessee. We find that there is no dispute that assessee filed application before ITSC under section 245C(1) for settlement of all tax dispute in AY 2014-15 & 2015-16. It is also an admitted fact that application of assessee was accepted by ITSC and final order under section 245D(4) dated 13.10.2017 was passed. Further, as per term of settlement, the assessing officer also passed order giving effect in accepting the total income of assessee at Rs. 381.06 crores vide his order dated 27.11.2017. 11.We find that Hon’ble Delhi High court in Omaxe Ltd. vs ACIT (supra) held that once application for settlement is admitted by Settlement Commission, till final order, exclusive jurisdiction in relation to assessee’s case would be Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 7 with it and all matters which can be examined by assessing officer. Further, Gujarat High Court in Komalkant Faikirchand Sharma vs DCIT (supra) also held that once order under section 245D has been passed by ITSC, assessment for that years stands concluded and assessing officer has no jurisdiction to reopen assessment. The Hon’ble Delhi High Court in a recent decision in Orchid Infrastructure Developers (P) Ltd. vs PCIT (supra) also held that order of ITSC is deemed to be conclusive for all matters pertaining to concerned assessment year for which settlement application has been accepted and processed by ITSC. Such matter can be reopened as per procedure mentioned in section 245D and not under section 148. 12.We find that assessing officer has not adopted recourse prescribed under sub-section (6) of 245D which mandates that order passed under sub- section (4) shall provide for the term of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to made the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by Settlement Commission that it has been obtained by fraud or misrepresentative of fact. No such plea is raised by assessing officer that if there is any misrepresentative of fact by assessee while moving application under section 245C(1) or in obtaining order under section 245D(4). We find that Settlement Commission is also empowered to rectify the mistake apparent from the record as per sub-section (6B) of section 245D. Even no attempt is made by assessing officer that settlement order passed by ITSC required any rectification. The assessing Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 8 officer of his own has reopened the case of assessee under section 153A, which is beyond his jurisdiction. Thus, in our considered view, the assessing officer acceded his jurisdiction, hence we uphold the order of ld. CIT(A) with our aforesaid additional observation. In the result, the grounds of appeal raised by Revenue are dismissed. 13. In the result, the appeal for A.Y. 2014-15 is dismissed. C.O. NO. 230/Mum/2025 14.In the cross-objection, the assessee has raised ground about not mentioning the Document Identification Number (DIN). Considering the fact that we have dismissed the appeal of Revenue on merit allowing fully relief to the assessee, therefore, adjudication of grounds in C.O. have become infructuous and dismissed as such. ITA No. 4437/Mum/2025 15. We find that Revenue has raised similar ground of appeal as raised in A.Y. 2014-15, which we have dismissed in a detailed order. Thus, following the principle of consistency the appeal for A.Y. 2015-16 is also dismissed with similar observation. 16. In the result, appeal of Revenue for A.Y. 2015-16 is dismissed. Order was pronounced in the open Court on 10/12/2025. Sd/- GIRISH AGRAWAL ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 10/12/2025 Biswajit Printed from counselvise.com ITA NoS. 4436 & 4437/Mum/2025 & C.O. No. 230/Mum/2025 Upl Limited 9 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "