BANK OF AMERICA N.A, MUMBAI V. ADIT (IT) 3(2), MUMBAI

ITA 109/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8259 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJEET KUMAR JAIN
• Keywords: Opportunity of being heard; Permanent establishment
• Section: 143(3); 144

Judgement Text

ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL 'K' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.109/MUM/2011 (ASSESSMENT YEAR: 2006-07) BANK OF AMERICA,N.A, GROUND FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI 400021 PAN: AAACB 1573 G VS. ADIT (IT) 3(2) ROOM NO.132, SCINDIA HOUSE, BALLARD ESTATE, MUMBAI 400001 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI PERCY PARDIWALA, VASANTI B.,PATEL DEPARTMENT BY: SHRI AJEET KUMAR JAIN, DR DATE OF HEARING: 08/11/2012 DATE OF PRONOUNCEMENT: 16/11/2012 O R D E R PER BENCH: THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDERS O F THE CIT (A)-15 MUMBAI DATED 22.11.2010. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A), HAS ERRED IN LAW AND ON' FACTS IN DISMI SSING THE APPEAL AD-LIMINE (AT THE ADMISSION STAGE) AS BEING NULL AND VOID. 2. THE CIT(A) HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE OUGHT TO HAVE CONSIDERED THE VARIOUS GROUN DS RAISED IN THE APPEAL BEFORE HIM AND ADJUDICATED THE SAME O N MERITS. 3. THE CIT(A) ERRED IN HOLDING THAT 'ITS SUBSEQUENT WI THDRAWAL IS NOT PROPER AND CONSEQUENT ORDER PASSED BY THE AO UNDER SECTION 143(3) ON 10.02.2010 IS ERRONEOUS. THE AO C OMMITTED A MISTAKE AND THE APPELLANT CANNOT CLAIM A VESTED R IGHT ON THIS MISTAKE.' 4. THE CIT(A) ERRED IN HOLDING THAT ORDER DATED 13.02. 2010 WAS VOID. 5. THE CIT(A) OUGHT TO HAVE HELD THAT, THE ADJUSTMENTS TO THE ARM'S LENGTH PRICE OF THE CORRESPONDENT BANKING REL ATED SUPPORT SERVICES AND PORTFOLIO ANALYTICS SERVICES D ETERMINED BY THE TPO SHOULD BE DELETED. ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 2 OF 9 6. THE CIT(A) OUGHT TO HAVE HELD THAT, THE ADJUSTMENTS TO THE ARM'S LENGTH PRICE OF THE AUDIT AND TECHNOLOGY RELA TED SERVICES, BANC OF AMERICA EQUITY PARTNERS (EMPLOYEE RENDERING) SERVICES, OPERATIONAL AUDIT SERVICES, SU PPORT IN RELATION TO CASH MANAGEMENT SERVICES, PORTFOLIO MAN AGEMENT GROUP EMPLOYEES PROVIDING REGIONAL SUPPORT SERVICES AND SYSTEM'S GROUP EMPLOYEES PROVIDING REGIONAL SUPPORT DETERMINED BY THE TPO SHOULD BE DELETED. 7. WHILE DEALING WITH THE ADJUSTMENTS AS REFERRED IN G ROUND NO. 5 AND 6, THE CIT(A) OUGHT TO HAVE HELD THAT, HA VING REGARD TO THE PROVISIONS AS CONTAINED IN ARTICLE 7 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND THE UNITED STATES OF AMERICA WHICH STATES THAT, IN DETERMINING THE PROFITS OF THE APPELLANT (BEING A PERMANENT ESTABLISHMENT), NOTHING MORE THAN ACTUAL COST INCURRED IN RESPECT OF SUCH S UPPORT TO OVERSEAS BRANCHES SHOULD BE CONSIDERED, THE MARK-UP ARRIVED AT BY THE AO/TPO NEEDS TO BE DELETED. 8. THE CIT(A) OUGHT TO HAVE HELD THAT THE EXPENSES OF RS. 16,79,60,835 INCURRED BY APPELLANT'S OVERSEAS BRANC HES FOR ITS INDIAN OPERATIONS DID NOT FALL WITHIN THE SCOPE OF SECTION 44C OF THE ACT, PERTAINING TO HEAD OFFICE EXPENSES. THE CIT(A) FAILED TO APPRECIATE THAT THE TPO HAD DETERMINED TH E ARM'S LENGTH PRICE OF THESE EXPENSES AS RS 16,79,60,835. 9. THE CIT(A) FAILED TO APPRECIATE THAT THERE HAS BEEN NO FAILURE ON THE PART OF YOUR APPELLANT IN COMPLYING WITH THE PROVISIONS OF SECTION 40(A)(I) AND THAT THE PROVISI ONS OF SECTION 40(A)(I) CAN HAVE NO APPLICATION TO THE AFORESAID E XPENDITURE OF RS 16,79,60,835 INCURRED BY YOUR APPELLANT. 10. WITHOUT PREJUDICE, THE CIT(A) HAVING UPHELD THE AO' S CONCLUSION THAT THE EXPENDITURE OF `16,79,60,835/- WAS IN THE NATURE OF HEAD OFFICE EXPENDITURE (REFER PARAGRAPH 4.6 OF THE ASSESSMENT ORDER) OUGHT TO HAVE ALLOWED THE DEDUCTI ON UNDER SECTION 44C OF THE ACT. 11. THE CIT(A) OUGHT TO HAVE DELETED THE DISALLOWANCE O F THE INTEREST PAYMENT OF INR 59,30,47,220 MADE BY APPELL ANT'S INDIAN BRANCHES TO THE APPELLANT'S SINGAPORE BRANCH IN COMPUTING THE TOTAL INCOME OF THE APPELLANT IN INDI A. 12. THE CIT(A) OUGHT TO HAVE HELD THAT INTEREST PAYMENT OF INR 59,30,47,220 MADE BY APPELLANT'S INDIAN BRANCHES TO APPELLANT'S SINGAPORE BRANCH, IS NOT THE INCOME OF THE APPELLANT AND IS NOT LIABLE TO BE TAXED. 13. THE CIT(A) OUGHT TO HAVE HELD THAT CONSISTENT WITH HIS STAND OF NOT ALLOWING A DEDUCTION OF THE INTEREST PAID, THE INTEREST RECEIVED OF RS. 8,8 6,98,558 ALSO BEING FROM SELF WAS NOT TAXABLE. 14. THE CIT(A) OUGHT TO HAVE HELD THAT SALARY OF RS. 1,64,67,795 PAID OVERSEAS TO EXPATRIATES DID NOT FALL WITHIN THE SCOPE OF SECTION 44C OF THE ACT , PERTAINING TO HEAD OFFICE EXPENSES. THE CIT(A) OUGHT TO HAVE HELD THAT THESE WERE EXPENSES WHICH ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 3 OF 9 WERE DIRECTLY ATTRIBUTABLE TO THE INDIAN OPERATIONS OF YOUR APPELLANTS AND DEDUCTIBLE IN COMPUTING TAXABLE INCOME AND DID NOT ATTRACT THE RESTRICTIVE PROVISIONS OF SECTION 44C O F THE ACT. 15. THE CIT(A) OUGHT TO HAVE HELD THAT AMOUNT OF RS. 8,44,37,389 EARNED BY YOUR APPELLANT'S OVERSEAS BRANCHES ON THE LOANS EXTENDED BY THEM TO CLIENTS SITUATED IN INDIA IS NOT LIABLE TO BE TAXED IN INDIA UNDER ARTICLE 7 OF THE INDO-US TA X TREATY READ WITH SECTION 115A OF THE ACT. THE CIT(A) OUGHT TO HAVE HELD THAT, THE INCOME OF R S. 4,33,54,634 ATTRIBUTABLE FOR THE SUPPORT SERVICES PROVIDED BY THE APPELLANT IN INDIA IN RELA TION TO SUCH LOANS, WAS ALREADY DETERMINED BY THE TPO AND ADDED TO THE APPELLANT'S INCOME CHAR GEABLE TO TAX AND, THEREFORE, NOTHING FURTHER REMAINED TO BE ADDED. 2. WE HAVE HEARD THE LEARNED COUNSEL AND THE LEARNED D R IN THIS REGARD. 3. THE FACTS RELATING TO THE PRESENT APPEAL ARE THAT A SSESSEE BANK OF AMERICA N.A. IS BANKING COMPANY INCORPORATE D IN THE USA AND HAS BEEN OPERATING IN INDIA SINCE 1964 CURRENTL Y HAVING FIVE BRANCHES IN INDIA NAMELY MUMBAI, NEW DELHI, CALCUTT A, CHENNAI AND BANGALORE. THE BANKS INDIAN BRANCHES OFFER A R ANGE OF WHOLESALE BANKING PRODUCTS CATERING PRIMARILY TO MU LTI NATIONAL COMPANIES AND OTHER TOP SEGMENT CORPORATE CUSTOMERS . SOME OF THE PRODUCTS OFFERED ARE VARIOUS TYPES OF LOANS SUCH AS OVERDRAFTS, CASH CREDITS, TERM LOANS, BILLS DISCOUN TING, WORKING CAPITAL FINANCE ETC, ACCEPTANCE OF CURRENT ACCOUNTS , TERM DEPOSITS, SECURITIES AND MONEY MARKET TRANSACTIONS, DERIVATIV ES AND FOREIGN EXCHANGE TRADING, TRADE FINANCE RELATED TRANSACTION S SUCH AS GUARANTEES, LETTERS OF CREDITS ETC. THE INDIAN BRAN CHES OF THE BANK DO NOT OFFER ANY RETAIL BANKING PRODUCTS. THE FACTS IN CHRONOLOGICAL ORDER LEADING TO THIS APPEAL ARE AS FOLLOWS: I) THE DRAFT ORDER IN THIS CASE WAS DATED 29/12/20.09 AND WAS SERVED ON THE ASSESSEE ON 30/12/2009. OBJECTIONS WE RE FILED WITH THE DRP VIDE LETTER DT. 25/01/2010. SUBSEQUEN T TO THE FILING OF THE OBJECTIONS, THE ASSESSEE BECAME AWARE ON 29/1/2010 OF A CLARIFICATION DT.20/01/2010 FROM THE CENTRAL BOARD OF DIRECT TAXES (CBDT) AS PER WHICH IT WAS CL ARIFIED THAT ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 4 OF 9 AN ASSESSEE HAD THE OPTION TO EITHER FILE OBJECTION S BEFORE THE DRP OR CHALLENGE THE ASSESSMENT FRAMED AS PER THE N ORMAL APPELLATE CHANNEL. II) ON THE SAME DAY I.E. 29/01/2010 WHICH FALLS WITHI N THE PERIOD PRESCRIBED UNDER SECTION 144C(2)(B) FOR ASSESSEE TO FILE ITS OBJECTIONS WITH THE DRP AND THE ASSESSING OFFICER A GAINST THE DRAFT ORDER, THE APPLICANT TOOK THE FOLLOWING ACTIO NS: (A) FILED A LETTER DT. 29/01/2010 TO THE DRP WITHDRAWIN G ITS OBJECTIONS FILED ON 25/01/2010. IN THE LETTER, IT W AS MADE CLEAR THAT IN VIEW OF THE CLARIFICATION OF THE CBDT , THE ASSESSEE DESIRED TO EXERCISE THE OPTION OF FILING A N APPEAL BEFORE THE CIT (A) FROM THE ASSESSMENT ORDER THAT W OULD BE PASSED UNDER SECTION 143(3). (B) A LETTER DT. 29/1/2010 WAS FILED WITH AO ON THAT VE RY DATE INFORMING HIM THAT THE OBJECTIONS FILED BEFORE THE DRP HAVE BEEN WITHDRAWN AND REQUESTING HIM TO PASS AN ASSESS MENT ORDER WITHIN THE PRESCRIBED TIME. III) AO PASSED AN ORDER DT. 10/02/2010 UNDER SECTION 144 C(3) R.W.S. 143(3) WHICH WAS SERVED ON ASSESSEE ON 16.02.2010. A TAX DEMAND OF ` .36,34,74,134/- WAS RAISED AND ASSESSEE WAS INFORMED THAT THEY COULD APPEAL AGAINST THE SAID OR DER TO THE CIT (A). ASSESSEE FILED AN APPEAL AGAINST THE AFORESAID ORDER OF AO ON 10.03.2010 WITH THE CIT (A). THE TAX DEMAND RAISED BY AO HAS BEEN FULLY PAID. IV) A LETTER DATED 20.04.2010 WAS SERVED ON 23.04.2010 ON ASSESSEE FIXING THE FIRST HEARING BEFORE THE DRP ON 28.04.20 10. ASSESSEE ADDRESSED A LETTER DATED 23.04.2010 TO THE DRP INFO RMING THEM OF THE WITHDRAWAL OF THEIR APPLICATION AND FILING O F THE APPEAL TO THE CIT (A). IN THIS LETTER IT WAS ALSO STATED THAT THE APPLICATION FILED BEFORE THE DRP ON 25.01.2010 DOES NOT SURVIVE FOR CONSIDERATION. THE DRP HOWEVER, PROCEEDED WITH THE CASE AND IN ITS ORDER DATED 13.07.2010 TREATED THE OBJECTION F ILED BEFORE THE PANEL DISMISSED AS WITHDRAWN AND DIRECTED AO TO COMPLETE THE ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 5 OF 9 ASSESSMENT AS PROPOSED IN THE DRAFT ORDER. THE AO A GAIN PASSED AN ORDER ON 20/08/2010 WHICH WAS CHALLENGED BEFORE ITAT. 5. BEFORE THE CIT (A), IT WAS ARGUED THAT SINC E ASSESSEE HAD WITHDRAWN THE OBJECTION BEFORE THE DRP AND AS THE D RP BECOME FUNCTUS OFFICIO CONSEQUENT TO THE WITHDRAWAL OF OBJECTIONS, THE OR DER PASSED BY THE DRP WAS BAD IN LAW AND THE CIT (A) HA S JURISDICTION TO ENTERTAIN THE APPEAL WHICH WAS FILED IN TIME ON 10.03.2010. THE CIT (A) HOWEVER, WAS OF THE OPINION THAT FOLLOWING THE CBDT CIRCULAR NO.5, ASSESSEE HAS ONLY OPTION TO EITHER P REFER THE APPEAL BEFORE THE CIT (A) OR BEFORE THE DRP AND SINCE ASSE SSEE CHOSE TO FILE OBJECTION BEFORE THE DRP, IT CANNOT PREFER THE APPE AL BEFORE THE CIT (A). HE DISMISSED THE APPEAL IN LIMINE. HOWEVER, WH ILE DISMISSING, HE ALSO OBSERVED THAT AO HAVING COMPLETED THE ORDER EARLIER ON 10.02.2010, COMMITTED A MISTAKE AND THEREFORE, THAT ORDER BECOMES VOID. 6. THE LEARNED COUNSEL SUBMITTED THAT THE ORDER OF THE DRP WAS CHALLENGED BEFORE THE ITAT IN ITA NO.7100/MUM/2010 WHICH HELD THE ORDER PASSED ON 28.08.2010 AS INVALID, THEREFOR E, THE ORIGINAL ORDER PASSED ON 10.02.2010 IS THE ONLY VALID ORDER. SINCE THIS PRESENT APPEAL WAS NOT PLACED BEFORE THE BENCH FOR CONSIDERATION, THEY DID NOT ADJUDICATE THE PRAYER TO RESTORE TO TH E FILE OF THE CIT (A). THEREFORE, IT WAS PRAYED THAT THE MATTER MAY T O BE RESTORED TO THE FILE OF THE CIT (A) FOR ADJUDICATING THE ISSUES ON MERITS. 7. THE LEARNED DR ACCEPTED THE FACTUAL POSITION AND MADE SUBMISSIONS. 8. WE HAVE CONSIDERED THE ISSUE. AS STATED IN THE F ACTS ABOVE AFTER ASSESSEE WITHDREW THE OBJECTIONS AND HAVING PASSED THE ORDER BY AO IN CONFORMITY WITH THE DRAFT ORDER PROPOSED, ASS ESSEE FILED THE APPEAL BEFORE THE CIT (A). AS RIGHTLY HELD BY THE I TAT, THE DRP SHOULD NOT HAVE ISSUED ANY DIRECTIONS AND SUBSEQUEN T ORDER PASSED BY AO WAS NOT CORRECT WHICH WAS RIGHTLY CANCELLED B Y THE ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 6 OF 9 COORDINATE BENCH IN ITA NO.7100/MUM/2010. THE ISSUE WAS CONSIDERED ELABORATELY AS UNDER: 4 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FULLY PERUSAL OF THE RELEVANT MATERIAL ON RECORD, WE FIND THAT TH E ASSESSING OFFICER HAS PASSED TWO ORDERS IN THIS CASE ONE U/S 144C(3) DT 10.2.2010 AND ANOTHER U/S 144C(13) DT 20.8.2010. BO TH THESE ORDERS ARE IDENTICAL AND WITH SAME DEMAND OF TAX. T HERE IS NO DISPUTE ABOUT THE FACT AS EXPLAINED BY THE LD SR CO UNSEL THAT AGAINST THE DRAFT ORDER DT 29.12.2009 PASSED U/S 14 4C(1), THE ASSESSEE FILED ITS OBJECTION DT 25.1.2010 BEFORE TH E DRP. HOWEVER, IN THE MEANTIME, THE CBDT ISSUED A CLARIFI CATION DT 20.1.2010 REGARDING THE OPTION OF AN ASSESSEE EITHE R TO GO BEFORE THE DRP OR TO PREFER THE NORMAL APPELLATE CHANNEL. IT WAS FURTHER CLARIFIED BY THE CBDT THAT IT IS THE CHOICE OF ASSE SSEE WHETHER TO FILE AN OBJECTION BEFORE THE DRP AGAINST THE DRAFT ASSESSMENT ORDER OR TO EXERCISE THE OPTION AND FILE AN APPEAL LATER BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS) AGAINST THE ASS ESSMENT ORDER PASSED BY THE ASSESSING OFFICER. WHEN THE CLA RIFICATION CAME TO THE KNOWLEDGE OF THE ASSESSEE IT HAD IMMEDI ATELY FILED A LETTER DATED 29.1.2010 BEFORE THE DRP FOR EXPRESSIN G THE EXERCISE OF THE OPTION OF FILING AN APPEAL BEFORE THE COMMIS SIONER OF INCOME TAX(APPEALS) AND WITHDRAWING THE OBJECTIONS FILED U/S 144C(2). 4.1 THOUGH, THE ASSESSEE HAD AN OPTION TO EXERCISE EITHER TO FILE THE OBJECTION BEFORE THE DRP AGAINST THE PROPOSED D RAFT ASSESSMENT ORDER OR TO OPT FOR AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS) AGAINST THE ASS ESSMENT ORDER PASSED U/S 144C(3). HOWEVER, ONCE THE ASSESSE E HAS FILED THE OBJECTION BEFORE THE DRP, EVEN THOUGH THE ASSES SEE HAS LIBERTY TO WITHDRAW THE SAME, THE PROCEEDINGS BEFOR E THE DRP WOULD NOT AUTOMATICALLY CLOSE BECAUSE THE DRP IS HA VING THE POWERS OF ENHANCEMENT OF THE VARIATION AS PROPOSED IN THE DRAFT ORDER. THEREFORE, WITHOUT PERMISSION OF THE DRP, TH E APPLICATION/OBJECTION, ONCE FILED, CANNOT BE WITHDR AWN BY THE PARTY IN VIEW OF SUB. SEC. 7 & 8 OF SECTION 144C OF THE I T ACT WHICH READ AS UNDER: 7. THE DISPUTE RESOLUTION PANEL MAY, BEFORE ISSUI NG ANY DIRECTIONS REFERRED TO IN SUB. SECTION (5)-A) MAKE SUCH FURTHER ENQUIRY, AS IT THINKS FIT; OR B) CAUSE ANY FURTHER ENQUIRY TO BE MADE BY ANY INCO ME TAX AUTHORITY AND REPORT THE RESULT OF THE SAME TO IT. 8) THE DISPUTE RESOLUTION PANEL MAY CONFIRM, REDUCE OR ENHANCE THE VARIOUS PROPOSED IN THE DRAFT ORDER SO, HOWEVER , THAT IT SHALL NOT SET ASIDE ANY PROPOSED VARIATION OR ISSUE ANY D IRECTION UNDER SUB SECTION (5) FOR FURTHER ENQUIRY AND PASSING OF THE ASSESSMENT ORDER. ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 7 OF 9 4.2 SINCE IN THE CASE IN HAND, THE DRP AFTER TAKING NOTE OF THE FACT THAT THE ASSESSEE DESIRES TO EXERCISE THE OPTI ON TO FILE THE APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(APPEAL S) AGAINST THE ASSESSMENT ORDER, ACCEPTED THE REQUEST OF THE A SSESSEE FOR WITHDRAWAL OF THE OBJECTION WHILE PASSING THE ORDER DT 13.7.2010 AND THEREFORE, NO DIRECTION PER-SE WERE PASSED BY T HE DRP AS PER SUB. SEC. 5 OF SEC 144C OF THE ACT. WE QUOTE THE OR DER OF THE DRP AS UNDER: IN THIS CASE, DRAFT ASSESSMENT ORDER DATED 29.12.2 009 WAS ISSUED BY THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE HAS FI LED FOLLOWING OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL VIDE ITS LETTER DATED 25.1.2010. . . SUBSEQUENTLY, VIDE LETTER DATED 29TH JANUARY, 2010, THE ASSESSEE MADE A REQUEST FOR WITHDRAWAL OF THE OBJEC TIONS FILED BEFORE THE DRP MENTIONING THAT THEY INTEND TO OPT T O PROCEED TO THE NORMAL APPELLATE AUTHORITY I.E. THE CIT(A). ASS ESSEE WAS GIVEN OPPORTUNITY OF BEING HEARD AND SHRI VIRENDRA A.MITTAL, PARTNER DELOITTE HARKINS & SELLS, THE AUTHORIZED RE PRESENTATIVE AND MR. SAURABH DOSHI, ASST. VICE PRESIDENT, COUNTR Y TAX & FINANCE BANK OF AMERICA NA ATTENDED THE PROCEEDINGS ON 28.4.2010. ASSESSEE CONFIRMED ITS REQUEST FOR WITHD RAWAL OF OBJECTION. IN VIEW OF THE REQUEST OF THE ASSESSEE, THE OBJECTIONS FILED BEFORE THE PANEL ARE DISMISSED AS WITHDRAWN. THE ASSESSING OFFICER IS DIRECTED TO COMPLETE ASSESSMEN T AS PROPOSED IN THE DRAFT ORDER. 5 EVEN OTHERWISE, WHEN THE OBJECTIONS FILED BY THE ASSESSEE WERE ALLOWED TO BE WITHDRAWN ON THE GROUND THAT THE ASSESSEE INTEND TO EXERCISE THE OPTION TO PROCEED TO FILE AP PEAL BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS), THEN THERE CAN NOT BE ANY DIRECTION UNDER SUB.SEC.5 IN THE ABSENCE OF ANY OBJ ECTION AS REQUIRED UNDER SUB. SEC. (2) OF SEC. 144C OF THE AC T. IT IS CLEAR FROM THE ORDER DATED 13.7.2010 OF THE DRP THAT THE DRP HAS NOT ISSUED ANY DIRECTION ON MERITS OF THE PROPOSED DRAF T ASSESSMENT ORDER; THEREFORE, THE ASSESSING OFFICER GOT NO JURI SDICTION TO PASS ANY ORDER U/S 144C(13). HENCE, THE ORDER DATED 20.8 .2010 PASSED U/S 144C(13) R.W.S 143(3) BY THE ASSESSING O FFICER IS WITHOUT JURISDICTION AND ACCORDINGLY IS NOT SUSTAIN ABLE. 5.1 EVEN OTHERWISE, WHEN THE ASSESSING OFFICER HAS ALREADY PASSED AN ASSESSMENT ORDER DT 10.2.2010 U/S 144C(3) , THEN THE SECOND ORDER WOULD RESULT MULTIPLICITY OF LITIGATIO N. ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 8 OF 9 6 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CAS E, WE HOLD THAT THE ORDER DATED 20.8.2010 IS INVALID FOR WANT OF JURISDICTION AND ACCORDINGLY THE SAME IS QUASHED. SINCE THE ORD ER OF THE COMMISSIONER OF INCOME TAX(APPEALS) WHEREBY THE APP EAL OF THE ASSESSEE AGAINST THE ASSESSMENT ORDER DT 10.2.2010 WAS ALLEGEDLY DISMISSED IS NOT A SUBJECT MATTER BEFORE US IN THE PRESENT PROCEEDINGS; THEREFORE, WE DO NOT PROPOSE T O PASS ANY DIRECTION IN THAT RESPECT. HOWEVER, ASSESSEE OTHERW ISE IS AT LIBERTY TO TAKE LEGAL REMEDY AS PER LAW . 9. SINCE THE SUBSEQUENT ORDER PASSED BY AO WAS CANCELLED, THE ORDER DATED 10.02.2010 ORIGINALLY AFTER WITHDRAWAL OF OBJECTIONS IS THE VALID ORDER AND THE APPEAL PREFERRED BEFORE THE CIT (A) WAS CORRECTLY MADE WITHIN THE TIME AS PRESCRIBED UNDER THE PROVISIONS OF THE ACT. AS DRP DID NOT GIVE ANY DIRECTION AND ALL OWED THE OBJECTIONS TO BE WITHDRAWN, IT CAN NOT BE STATED TH AT ASSESSEE EXERCISED OPTION TO PREFER OBJECTIONS BEFORE DRP. W E ARE OF THE OPINION THAT THE CIT (A) COMMITTED AN ERROR IN NOT ADMITTING THE APPEAL. THEREFORE, WE SET ASIDE THE ORDER OF THE CI T (A) WITH A DIRECTION TO ADMIT THE APPEAL AND ADJUDICATE THE MA TTER ON MERITS. WITH THESE DIRECTIONS, THE GROUNDS TO THAT EXTENT A RE CONSIDERED ALLOWED. SINCE THE MATTER IS RESTORED TO THE FILE O F THE CIT (A) TO CONSIDER THE APPEAL ON MERITS, THE GROUNDS RAISED O N MERITS OF THE ADDITION MADE BY AO ARE NOT ADJUDICATED. 10. IN THE RESULT THE APPEAL FILED BY ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2012. SD/ SD/- ( AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 16 TH NOVEMBER, 2012. VNODAN/SPS ITA NO.109 OF 2011 BANK OF AMERICA, MUMBAI PAGE 9 OF 9 COPY TO: 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, K BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI