CENTRIENT PHARMACEUTICALS INDIA PRIVATE LIMITED,PUNJAB V. DCIT/ ACIT, CIRCLE 1(1), CHANDIGARH, CHANDIGARH

SA 42/CHANDI/2024

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Centrient Pharmaceuticals India Private Limited filed a stay application against an outstanding demand of Rs. 60,19,66,421 for the assessment year 2020-21. The case was selected for scrutiny and referred to the Transfer Pricing Officer (TPO) under section 92CA of the Income Tax Act, 1961. A draft assessment order proposed adjustments of Rs. 166,00,63,165, which was contested by the Assessee. The Dispute Resolution Panel (DRP) issued directions that were not initially implemented in the final assessment order. However, a rectification order was later passed, giving effect to the DRP's directions. The Tribunal found a prima facie case for the Assessee and granted a stay on the demand.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 28797 (ITAT-CHANDIGARH)
• Appeal Type: Stay Application
• Pronouncement Date: 31-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: DARPAN KIRPALANI
• Keywords: Transfer pricing; Rectification of order; Application of stay
• Section: 143(3); 92CA

Judgement Text

" आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & DR KRINWANT SAHAY, ACCOUNTANT MEMBER S.A. No. 42/Chd/2024 ( in ITA No. 1201/CHD/2024) Ǔनधा[रण वष[ / Assessment Year : 2021-22 Centrient Pharmaceuticals India Private Limited, Village Toansa Bhai Mohan Singh Nagar, Arson SOP Taunsa, Nawanshahr 144533 Vs. बनाम The DCIT / ACIT, Cir 1(1), Chandigarh èथायी लेखा सं./PAN No: AABCM4314K अपीलाथȸ/ APPELLANT Ĥ×यथȸ/ REPSONDENT ( HYBRID MODE ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Darpan Kirpalani, Advocate राजèव कȧ ओर से/ Revenue by : Shri Vivek Vardhan, JCIT, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 31.12.2024 उदघोषणा कȧ तारȣख/Date of Pronouncement : 31. 12.2024 आदेश/Order PER MAHAVIR SINGH, V.P.: By way of this Stay Application the Assessee has requested for stay of outstanding demand of Rs. 60,19 66,421/- for the A.Y. 2020- 21. 2. At the outset, ld. Counsel for the Assessee stated the facts that the Assessee filed its return of income for the relevant A.Y. 2020-21 on S.A.No. 142-Chd-2024 – Centrient Pharmaceuticals India Private Limited, Nawanshahr 2 31.3.2022 and Assessee’s case was selected for scrutiny assessment under CASS. The Assessee filed From No. 3CEB report along with return of income and accordingly the Assessee’s case was referred to TPO u/s 92CA of the Income Tax Act, 1961 (in short 'the Act') after taking approval from PCIT. He further stated the fact that the draft assessment order was passed by the Assessing Officer after making proposed adjustments of Rs. 166,00,63,165/- vide draft assessment order u/s 144C(1) of the I.T. Act vide DIN & Order No. ITBA/AST/F/144C/2023-24/1059061224(1) dated 26.12.2023. The Assessee filed objections before the DRP in Form No. 35A and the DRP vide order dated 26.9.2024 vide DIN No. ITBA/DRP/M/144C(5)/2024- 25/1069123639(1) has given directions u/s 144C(5) of the I.T. Act, 1961. The Assessing Officer passed final assessment order vide order dated 25.10.2024 u/s 143(3) r.w.s. 144C(13) read with section 144B of the Act for the relevant A.Y. 2021-22. 3. At this point, the ld. Counsel pointed out from the final assessment order wherein the A.O. has noted the facts 6.1, 6.2 and 6.3 as under:- “6.1 The above quantified income was sent to the assessee as Draft assessment order u/s 144C(1) of the IT Act, 1961 vide DIN & order No ITBA/AST/F/144C/2023-24/1059061224(1) dated 26/12/23. S.A.No. 142-Chd-2024 – Centrient Pharmaceuticals India Private Limited, Nawanshahr 3 6.2 The assessee filed its objections before the Dispute Resolution Panel in Form 35A and the Dispute Resolution Panel vide order dated 26/9/24 in DIN No ITBA/DRP/M/144C(5)/2024- 25/1069123639(1) has given directions u/s 144C(5) of the IT Act, 1961. 6.3 The order giving effect to the directions of the Hon'ble DRP has not been passed by the Transfer Pricing Officer, DCIT, 1(2)(2), New Delhi till now and hence the final order in the case is being finalized without giving effect to the directions of the Hon'ble DRP in the case of the assessee as the time limit for completion of the final order expires by 31/10/2024. However, this final order may be rectified accordingly, once the order giving effect to the directions of the Hon'ble DRP is passed by the concerned TPO in the case.” 4. In view of the above, the ld. Counsel stated that the final assessment order was passed without giving effect to the directions of the DRP. Hence, he pointed out that the Assessee has a prima-facie case on merits and this assessment has is to be annulled. 5. When this was pointed out to the ld. Sr. DR, he could not controvert the above fact situation but he stated that the Assessing Officer has already vide order dated 19.12.2024 passed a rectification order giving effect to the DRP order wherein, the directions of the DRP was carried out. Hence, there is no infirmity in the order. S.A.No. 142-Chd-2024 – Centrient Pharmaceuticals India Private Limited, Nawanshahr 4 6. After hearing both the sides and going through the facts of the case, we noted that the Assessee has made out a prima facie case that the Assessing Officer while framing final assessment order dated 25.10.2024 has not considered the directions of DRP dated 26.9.2024. In terms of the above, we find that there is a prima facie case and, hence, we are inclined to grant stay of the demand for 30 days. 7. The appeal will come up for hearing on 08.1.2025. In term of the above, Complete stay is granted. Order pronounced on 31.12.2024. Sd/- Sd/- (KRINWANT SAHAY) ( MAHAVIR SINGH ) Accountant Member Vice President “आर.क े.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "