Wintek Technology (India) Private Limited, Kancheepuram V. DCIT, CHENNAI

ITA 1017/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9465 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Court: TRIBUNAL
• Assessee Lawyers: SIVAM SUBRAMANIAN
• Keywords: Transfer pricing; Period of limitation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1017/MDS/2015 / ASSESSMENT YEAR : 2010-11 M/S WINTEK TECHNOLOGY(INDIA) PVT. LTD NOKIA TELECOM SEZ, INDUSTRIAL PARK P-5, PHASE III, BANGALORE N.H SRIPERUMBUDUR KANCHEEPURAM 602 105 TAMIL NADU VS. THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE III CHENNAI [PAN AAACW 6597 K ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI SIVAM SUBRAMANIAN, CA /RESPONDENT BY : SHRI JASDEEP SINGH, CIT / DATE OF HEARING : 17 - 0 3 - 2016 ! / DATE OF PRONOUNCEMENT : 22 - 04 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 20.2.2105 CONSEQUENT T O THE DIRECTION OF THE DISPUTE RESOLUTION PANEL DATED 27.11.2014. 2. SHRI SIVAM SUBRAMANIAN, LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS TO PASS TH E ASSESSMENT ORDER WITHIN ONE MONTH FROM THE END OF T HE MONTH IN ITA NO. 1017/15 :- 2 -: WHICH THE DIRECTION OF THE DRP WAS RECEIVED. THE O NE MONTH FROM THE END OF THE MONTH IN WHICH THE DIRECTION OF THE DRP WAS RECEIVED EXPIRED ON 31.1.2015. IN THIS CASE, ACCORDING TO T HE LD. REPRESENTATIVE FOR THE ASSESSEE THE ASSESSMENT ORDER WAS PASSED O N 20.2.2015, HENCE, THE ORDER PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION. THE LD. REPRESENTATIVE PLACED HIS RELI ANCE ON THE DECISION OF THE COCHIN BENCH OF THIS TRIBUNAL IN THE CASE OF ENVESTNET ASSET MANAGEMENT(INDIA)P. LTD VS ACIT, [2015] 53 TAXMANN. COM 430. 3. ON THE CONTRARY, SHRI JASDEEP SINGH, LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THE DRP DIRECTED THE TRANSFER PRICING OFFICER TO VERIFY THE CALCULATION OF THE WORKING CA PITAL PRODUCED BY THE ASSESSEE DURING THE TRANSFER PRICING PROCEEDINGS. THE TPO VERIFIED THE WORKING CAPITAL CALCULATION PRODUCED BY THE ASSESS EE AND SUBMITTED HIS REPORT ON 21.1.2015. AFTER RECEIPT OF THE VERI FICATION MADE BY THE TPO, THE ORDER WAS PASSED ON 20.2.2015 I.E WITHIN O NE MONTH FROM THE DATE ON WHICH THE VERIFICATION WAS MADE BY THE TPO. THEREFORE, ACCORDING TO THE LD. DR, THE ORDER PASSED BY THE AS SESSING OFFICER IS WITHIN THE TIME LIMIT PROVIDED UNDER THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE DIRECTION OF DRP WAS RECEIVED BY THE ASSESSING OFFI CER ON 3.12.2014. ITA NO. 1017/15 :- 3 -: THE ASSESSMENT ORDER WAS IN FACT PASSED ON 20.2.201 5. THE CONTENTION OF THE LD. DR IS THAT THE DRP DIRECTED T HE TPO TO VERIFY THE CALCULATION OF WORKING CAPITAL AND THE VERIFICATION WAS DONE BY THE TPO ONLY ON 21.1.2015. WITHOUT VERIFICATION BY THE TPO , THE ASSESSING OFFICER CANNOT PASS ANY ASSESSMENT ORDER, THEREFORE , ACCORDING TO THE LD. DR, THE ASSESSMENT ORDER WAS PASSED WITHIN THE TIME LIMIT PROVIDED UNDER THE ACT. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SEC. 144C OF THE ACT. SEC. 144C(7) OF THE ACT ENABLES T HE DRP TO MAKE SUCH FURTHER ENQUIRY AS IT THINKS FIT. IT CAN ALSO DIRECT THE ENQUIRY TO BE DONE BY THE INCOME-TAX AUTHORITIES AND REPORT THE R ESULT TO THE DRP. AFTER INDEPENDENTLY MAKING ENQUIRY OR CONSIDERING T HE REPORT FILED BY THE INCOME-TAX AUTHORITIES, THE DRP BY VIRTUE OF SU B-SEC(8) OF SEC. 144C OF THE ACT, MAY CONFIRM, REDUCE OR ENHANCE THE VARIATIONS PROPOSED IN THE DRAFT ASSESSMENT ORDER. IT IS FURT HER PROVIDED THAT THE DRP SHALL NOT SET ASIDE ANY PROPOSED VARIATION OR I SSUE ANY DIRECTION U/S SUB-SEC. (5) OF SEC. 144C FOR FURTHER ENQUIRY. IN VIEW OF SUB-SEC. (7) AND (8) OF SEC. 144C, THE DRP CANNOT DIRECT THE TPO TO MAKE FURTHER VERIFICATION EITHER WITH REGARD TO WORKING CAPITAL OR OTHERWISE. AT THE BEST, DURING THE PENDENCY OF THE PROCEEDINGS BEFORE THE DRP, IT MAY CALL FOR REPORT FROM THE INCOME-TAX AUTHORITIES . IN VIEW OF THE SPECIFIC PROVISIONS IN SUB-SEC. (7) & (8) OF SEC. 1 44C OF THE ACT, THE DIRECTION OF THE DRP TO VERIFY THE CALCULATION OF W ORKING CAPITAL ITA NO. 1017/15 :- 4 -: PRODUCED BY THE ASSESSEE IS BEYOND THE JURISDICTIO N OF THE DRP. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT IN THE GUISE OF GIVING DIRECTION TO THE TPO TO VERIFY THE CALCUL ATION OF THE WORKING CAPITAL, THE DRP CANNOT EXTEND THE TIME LIMIT PROVI DED U/S 144C(13) OF THE ACT . SEC. 144C(13) ENABLES THE ASSESSING OFFI CER TO PASS THE ASSESSMENT ORDER WITHIN ONE MONTH FROM THE END OF T HE MONTH IN WHICH THE DIRECTION OF THE DRP WAS RECEIVED. THIS TIME LIMIT PROVIDED U/S 144C(13) CANNOT BE EXTENDED BY ANY AUTHORITY UN DER THE INCOME- TAX ACT, 1961 IN THE GUISE OF ASKING SOME OTHER AUT HORITY TO MAKE FURTHER CALCULATION OR VERIFICATION. THIS TRIBUNA L IS OF THE CONSIDERED OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFI CER ON 20.2.2015 IS BEYOND THE PERIOD OF LIMITATION PROVIDED UNDER THE INCOME-TAX ACT, HENCE, IT IS BARRED BY LIMITATION. ACCORDINGLY, T HE ORDER OF THE ASSESSING OFFICER IS QUASHED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 22 ND APRIL, 2016 RD ITA NO. 1017/15 :- 5 -: &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF