ADIT, Dehradun V. GIL Mauritius Holding Ltd., Gurgaon

ITA 3251/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6632 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUJ ARORA
• Assessee Lawyers: SUMIT LAL CHA NDANI ADVS; SALIL KAPOOR MS ANANYA KAPOOR
• Keywords: Rectification of order
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SH. N. K. SAINI, A M AND SMT. BEENA PILLAI , JM ITA NO. 3251 /DEL/201 4 : ASSTT. YEAR : 200 7 - 08 ASSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), DEHRADUN VS GIL MAURITIUS HOLDING LTD., C/O - SRBC & ASSOCIATES CHARTERED ACCOUNTANTS, GOLF VIEW, CORPORATE TOWER - B, SECTOR - 42, SECTOR ROAD, GURGAON - 122002 (APPELLANT) (RESPONDENT) PAN NO. A A CCG1350J ASSESSEE BY : SH. SALIL KAPOOR, MS. ANANYA KAPOOR & MR. SUMIT LAL CHANDANI, ADVS. REVENUE BY : SH. ANUJ ARORA , CIT DR DATE OF HEARING : 24.08 .201 6 DATE OF PRONOUNCEMENT : 22 .11 .201 6 ORDER PER N. K. SAINI, AM: THIS IS AN APP EAL BY THE DEPARTMENT AGAINST THE DIRECTION DATED 27.01.2014 ISSUED BY THE DISPUTE RESOLUTION PANEL - II, NEW DELHI ISSUED U/S 144C(5) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON BLE DISPUTE RESOLUTION PANEL ( DRP') HAS ERRED IN RECTIFYING UNDER RULE 13 OF THE INCOME TAX (DRP) RULES, 2009 ('DRP RULES') THE DIRECTIONS ISSUED BY IT VIDE ORDER DATED 31.08.2010 U/S I44C OF THE INCOME TAX ACT, 1961 ( THE ACT') AND DIRE CTING THE ASSESSING OFFICER TO IT A NO. 3251 /DEL /201 4 GIL MAURITIUS HOLDING LTD. 2 T AX THE REVENUES OF THE ASSESSEE FROM CONTRACT WITH M/S BG EXPLORATION AND PRODUCTION INDIA LTD ('BG') AS PER THE PROVISIONS OF SECTION 44BB OF THE ACT. 1.1) THE HON BLE D RP HAS FAILED TO APPRECIATE THAT ITS ACTION IN ADMITTING THE RECTIFICATION APPLICATION AND MODIFYING THE DIRECTIONS ISSUED VIDE ORDER DATED 31.08.2010 WAS BEYOND THE SCOPE OF THE PROVISIONS OF RULE 13 OF THE DRP RULES AS THE RELIEF SOUGHT BY THE ASSESSEE I N THE RECTIFICATION APPLICATION WAS NOT IN THE NATURE OF A MISTAKE OR ERROR APPARENT FROM RECORD. 1.2) THE HON'BLE DRP HAS ERRED IN OBSERVING THAT IN THE DIRECTIONS DATED 31.08.2010, THE OBJECTION NO. 2 IN THE ORIGINAL OBJECTION/APPEAL SEEKING TO RAISE TH E WITHOUT PREJUDICE' GROUND REGARDING TAXABILITY OF ASSESSEE'S INCOME U/S 44BB WAS NOT ADJUDICATED BY THE DRP, IGNORING THE FAET THAT IN THE ORIGINAL DIRECTIONS DATED 31.08.2010 ALL THE CONTENTIONS, INCLUDING THE SAID GROUND RELATING TO TAXABILITY OF INCO ME U/S 44BB OF THE ACT AS EVIDENT FROM PARA 2 OF THE DIRECTIONS, WERE DULY CONSIDERED BEFORE UPHOLDING THE PROPOSED ACTION OF THE AO IN THE DRAFT ASSESSMENT ORDER. 1.3) THE ACTION OF THE DRP AMOUNTS TO REVIEWING ITS OWN DIRECTIONS ISSUED IN THE ORIGINAL P ROCEEDINGS WHICH IS IMPERMISSIBLE UNDER THE PROVISIONS OF THE ACT AND THE RULES GOVERNING THE FUNCTIONING OF THE DRP. 1.4) THE HON'BLE DRP HAS ERRED IN OBSERVING THAT IN THE ASSTT. YEAR 2009 - 10, THE AO HIMSELF HAS HELD THAT THE REVENUES FROM CONTRACT WITH BG WAS TAXABLE U/S 44BB OF THE ACT, IGNORING THE FACT THAT THE SAID REVENUES WERE TAXED U/S 44BB OF THE ACT IN PURSUANCE OF DIRECTIONS ISSUED BY THE DRP U/S I44C WHICH WERE BINDING ON THE AO AS THE RECOURSE OF APPEAL BEFORE THE ITAT AGAINST DIRECTIONS OF THE DRP WAS NOT AVAILABLE IN THE SAID YEAR. IT A NO. 3251 /DEL /201 4 GIL MAURITIUS HOLDING LTD. 3 2) THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 3. DURING THE COURSE OF HEARING THE LD. DR SUBMITTED THAT THE PRESENT APPEA L HAS BEEN FILED AGAINST THE ORDER DATED 27.01.2014 WHICH HAS BEEN PASSED BY THE DRP VIDE WHICH THE EARLIER ORDER DATED 31.08.2010 HAS BEEN RECTIFIED. IT WAS FURTHER STATED THAT THE ITAT HAS ALREADY PASSED AN ORDER DATED 16.09.2011 IN ITA 5686/DEL/2010. TH EREFORE, THE EARLIER DIRECTIONS DATED 31.08.2010 OF THE DRP HAD MERGED WITH THE EARLIER ORDER DATED 16.09.2011 OF THE ITAT ON THE GERMANE ISSUE AS SUCH THE DRP WAS NOT JUSTIFIED IN PASSING THE IMPUGNED ORDER BY RECTIFYING THE EARLIER ORDER. 4. IN HIS R IVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE DEPARTMENT COULD NOT HAVE FILED THE APPEAL AGAINST THE ORDER OF THE DRP AS THERE IS NO SUCH PROVISION U/S 253(2A) OF THE ACT WHICH PROVIDES FOR FILING THE APPEAL BY THE IN COME TAX DEPARTMENT IN THE TRIBUNAL. IT WAS EXPLAINED THAT THE ASSESSEE FILED OBJECTION BEFORE THE DRP ON 28.01.2010 WHICH WERE DISPOSED OFF BY THE DRP VIDE ORDER DATED 31.08.2010 AND THEREAFTER APPLICATION WAS FILED BY THE ASSESSEE UNDER RULE 13 OF THE IN COME TAX (DRP) RULES, 2009 ON 11.07.2013 . IT A NO. 3251 /DEL /201 4 GIL MAURITIUS HOLDING LTD. 4 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE DRP ON THE OBJ ECTION OF THE ASSESSEE H AS ALREADY PASSED THE DIRECTION U/S 144 OF THE ACT VIDE ORDER DATED 31.08.2010 . IN COMPLIANCE TO THE SAID DIRECTIONS GIVEN BY THE DRP, THE AO PASSED THE ORDER DATED 08.10.2010 WHICH WAS A SUBJECT MATTER OF THE APPEAL OF THE ASSESSEE IN ITA NO. 5686/DEL/201 0 FOR THE ASSESSMENT YEAR 2007 - 08 WHICH HAS BEEN DISPOSED OFF BY THE ITAT DELHI BENCH C , NEW DELHI VIDE ORDER DATED 16.09.2011. THEREFORE, THE ORDER DATED 31.08.2010 OF THE DRP ON THE BASIS OF WHICH THE AO PASSED THE ASSESSMENT ORDER MERGED WITH THE ORDE R OF THE ITAT DATED 16.09.2011. IN THE SAID ORDER THE ITAT RESTORED A LIMITED ISSUE TO THE FILE OF THE AO TO ASCERTAIN THE PERIOD OF EXISTENCE OF THE ASSESSEE IN INDIA AND THEN DECIDE THE EXISTENCE OF PE. THE AO THEREAFTER ON THE DIRECTION OF THE ITAT PASS ED THE ASSESSMENT ORDER DATED 30.03.2013 AND NOW THIS RECTIFICATION ORDER DATED 27.01.2014 BY THE DRP AFTER THE ORDER OF THE AO DATED 30.03.2013 VIDE WHICH EFFECT HAS BEEN GIVEN TO THE DIRECTION OF THE ITAT IS VOID AB INITO . FROM THE FACTS AS DISCUSSED HER EINABOVE, IT IS CLEAR THAT THE EARLIER ORDER DATED 31.08.2010 PASSED BY THE DRP WAS NOT INEXISTENCE BECAUSE THE AO ON THE DIRECTIONS OF THE DRP PASSED THE ASSESSMENT ORDER DATED 08.10.2010 (COPY IT A NO. 3251 /DEL /201 4 GIL MAURITIUS HOLDING LTD. 5 OF WHICH IS PLACED AT PAGE NOS. 34 & 35 OF THE ASSESSEE S PAP ER BOOK). THEREAFTER, ON THE APPEAL OF THE ASSESSEE IN ITA NO. 5686/DEL/2010, THE ITAT DELHI BENCH C , NEW DELHI PASSED THE ORDER DATED 16.09.2011 AND ISSUED CERTAIN DIRECTIONS TO THE AO WHO IN COMPLIANCE OF THOSE DIRECTIONS PASSED THE ASSESSMENT ORDER DA TED 30.03.2013. THEREFORE, THE EARLIER ORDER DATED 31.08.2010 U/S 144C OF THE ACT PASSED BY THE DRP HAS ALREADY MERGED WITH THE ORDER OF THE ITAT DATED 16.09.2011. AS SUCH THE IMPUGNED ORDER WAS VOID AB INITO . IN THAT VIEW OF THE MATTER THE APPEAL OF THE D EPARTMENT IS ALLOWED AND THE IMPUGNED ORDER IS SET ASIDE . 6 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 22 /11 /2016) SD/ - SD/ - ( BEENA PILLAI ) ( N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 22 /11 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIST RAR