Astra Specialty Compounds India Private Limited, Bharuch V. The Dy.CIT, Circle-1(1)(1), Ahmedabad

ITA 357/AHD/2022

AI Insights

The case involves Astra Specialty Compounds India Pvt. Ltd., which appealed against the order of the Learned Commissioner of Income Tax (Appeals), Ahmedabad, concerning an assessment order for the Assessment Year 2018-19. The primary contention was the validity of the draft assessment order issued under section 143(3) read with section 144C of the Income Tax Act, 1961, which the assessee argued was barred by limitation. The Tribunal examined the timelines and procedural adherence in issuing the draft assessment order and found that the objections raised by the assessee were indeed delayed and not condoned, leading to the conclusion that the assessment order was time-barred.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135839 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 17-07-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 14-09-2022
• Other Referred Cases: Planet Online (P.) Ltd. Vs. ACIT, Alaya Jewel Industry (P.) Ltd. Vs. ACIT, TDK Electronics AG Vs. ACIT (International taxation), Yokogawa India India Ltd. Vs. ACIT, Astro Offshore Pte. Ltd. Vs. DCIT (International taxation)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’D’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRISIDDHARTHANAUTIYAL,JUDICIALMEMBER आयकरअपीलसं./ITA(TP)No.357/AHD/2022 धििाधरणवरध / Asstt.Year:2018-19 AstraSpecialtyCompoundsIndia Pvt.Ltd., PlotNo.Z56-Z58&Z67, DahejSEZPart-I, Taluka-Vagra, Bharuch. PAN:AALCA2559G Vs. D.C.I.T, Circle-1(1)(1), Ahmedabad. (Applicant)(Respondent) Assesseeby:ShriS.NSoparkar,Sr.Advocatewith ShriParinShah,A.R Revenueby:Dr.DarsiSumanRatnam,CIT.D.R सुिवाईकीतारीख /DateofHearing:18/07/2023 घोरणाकीतारीख /DateofPronouncement:18/08/2023 आदेश/ORDER PERWASEEMAHMEDACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncomeTax(Appeals),Ahmedabad,(in short“Ld.CIT(A)”)arisinginthematterofassessmentorderpassedunders. 143(3)r.w.s.144C(13)oftheIncomeTaxAct1961(here-in-afterreferredtoas "theAct")relevanttotheAssessmentYear2018-19. ITAno(TP).357/AHD/2022 Asstt.Year2018-19 2 2.Theassesseehaschallengedthevalidityofthedraftorderframedunder section143(3)readwithsection144CoftheActonaccountofbarredby limitationoftime. 3.Thenecessaryfactsarethattheassessee,inthepresentcaseaprivate limitedcompany,isengagedinthebusinessofmanufacturingofmaster-batch andadditivesystemsandotherallieditems.Inthepresentcase,thedraftorder wasframedbytheAOundertheprovisionsofsection143(3)readwithsection 144CoftheActvideorderdated29September2021whichwasreceivedbythe assesseeonthesamedatei.e.29September2021.Theassesseeonreceiptof suchdraftorderwasatlibertyundertheprovisionsofsubsection(2)ofsection 144CoftheActeithertoacceptthevariationproposedinthedraftorderorraise objectionifaggrievedwiththedisputeresolutionpanelandtheassessingofficer. Suchanacceptance/objectionwastobefiledbytheassesseewithin30days fromreceiptofthedraftorderbyhim. 4.Intheeventtheassesseeacceptsthevariationorraisesnoobjectionwithin thespecifiedperiodasdiscussedabove,theAOshallcompletetheassessment orderbasedonthedraftorderasprovidedundersubsection(3)ofsection144C oftheAct.AssuchtheAOshallframetheassessmentorderwithinonemonth fromtheendofthemonthinwhichtheacceptanceisreceivedbytheAOorthe periodoffilingofobjectionsundersubsection(2)expiresasmandatedunder subsection(4)ofsection144CoftheAct. 5.Admittedly,inthepresentcasetheassesseehasraisedtheobjection beforetheDRPdatedvideletterdated12November2021whereasthetimelimit specifiedundersubsection2ofsection144CoftheActforfilingtheobjection expiredason29October2021.Admittedly,theobjectionwasfiledbythe assesseebelatedly.ThisfactisalsoevidentfromthefindingofthelearnedDRP whichisreproducedhereunder: ITAno(TP).357/AHD/2022 Asstt.Year2018-19 3 5.2.1Wehavecarefullyconsideredtheobjectionbeingraisedbytheassessee.Thisisa jurisdictionalgroundwhichgoestotherootoftheentiredispute.Theobjectionconcerns, asperassessee,passingofaninvaliddraftassessmentorderdated29/09/21bytheAO. Accordingtotheassessee,thedraftassessmentorderisinvalidanddeservestobe cancelledorquashedonthegroundsthattheassesseecompanygotthedraftassessment orderu/s144Cdated29/09/21,fromIncomeTaxPortalwhiledoingsomeotherworkon theITportal.Theassesseecompanydidnotreceivethemail,northehardcopyforSCN andthedraftassessmentorderu/s144C.Theassesseewantsthepaneltodecidethis objectiononmeritsandrequestsforcancellingthedraftassessmentorderforthereasons mentionedabove. 5.2.2FactsinverybriefarethattheAOpassedthedraftassessmentorderorDAOon 29/9/21.Theassesseehadtofileobjectionswithinonemonthofthesame.However,the assesseefiledtheobjection(dated8-11-21)on12-11-21.Therefore,theobjectionfiledis latebyaround13daysorso.However,theassesseeinterestinglyhasnotfiledany condonationfordelaybeforetheDRP.Rather,ithasfiledobjectionno1whichsaysthat duetothefactsasmentionedabove,theDAOisbadinlawanddeservestobecancelled. Whenthisfactofnotrequestingforcondonationofdelay,wasbroughtupduringthe courseofhearing,thefactumoftakingobjectionforcancellingtheDAOwasonlyrepeated. Itisfoundthatlateron,theassesseehasindeedfiledonecompilationofwritten submissionsdated10-06-22asreceivedon13-06-22.Inthiscompilation,thereisanindex atthebeginningwhoseparagraph1isheadedas"Condonationofdelay".However,inthe entiretextofparagraph,samefactshavebeenrepeatedandthereagainisnorequestfor condonationofdelayorthegroundsofdelay.So,itcanbeconcludedthatthereisno requestfromtheassesseeforcondonationofdelay.TheassesseewantsthePanelto adjudicatetheobjectionno1onmerits,thatistosay,whethertheassessmentorder deservestobecancelledornot,asperthereasonsgivenbytheassessee. 5.2.3Wehavegivencarefulconsiderationstothefactsasmentionedbytheassesseeon thisobjection.TheadmittedfactsarethattheDAOwasindeedpassedon27-09-21and wasavailableontheITdepartmentalportal.TheassesseeclaimsthattheDAOwassent onanincorrectmailid,namely,[e-mail] [e-mail],theassesseehadsubmittedalettertothis effecttothedepartmentthatthesecondmailratherthanthefirstonewastobeused. 5.2.4Movingforward,anothersetofadmittedfactsarethattheassesseedidcometo knowabouttheDAOon11-10-21fromtheITportalwhiledoingsomeotherwork.So, eventhoughitwasachancediscoverybuttherewasstilltimeleftforittofileobjections beforetheDRPwithinthetime-limit.However,itdidnotdoso.Rather,itchosetofilea detailedreplyon23-10-21forrevisionintheDAOas,accordingtotheassessee,there weremanyapparentmistakes.TheassesseealsoinformedtheAOthatifnoreplyis receivedwithin7days,theyshallfileobjectionsbeforetheDRP,Noreplywasreceived. However,therewereDiwaliholidays,Sundaysetcduetowhichthemattergotdelayed furtherandtheobjectionswerefiledfinallyon12-11-21. 5.2.5Now,evengoingbywhatisstatedbytheassessee,itseemsthattherewasenough timeleftforittofileobjectionsbeforetheDRPwithinthetimelimit,evenwhentheDAO wasnotreceivedinthenewmailidbutwasaccidentallydiscoveredwhileonavisittothe ITportal.However,strangely,theassesseeinsteadofnotloosinganytimemore,choseto filealetterbeforetheAO.Now,evenifanyassesseechoosestofileanyrectification applicationbeforetheAO,thelimitationtofileobjectionsremainsasitisanddoesnotget extended.Further,givingatimeof7daystotheAOforrectifyingthemistakes,isalso ITAno(TP).357/AHD/2022 Asstt.Year2018-19 4 artificial,astheAOiswithinhisrightstodisposeofftheapplicationwithinthelimitation prescribedundertheAct. 5.2.5Now,theassesseewantsthePaneltocanceltheDAObecauseoftheseso-called reasons.Franklyspeaking,wearenotimpressedwiththeassessee'arguments.Theseare notsufficientandgoodgroundstocancelorquashtheDAO.Whateverinconveniencethe assesseemighthaveencounteredduetochangeinemailid,therewasstillsufficienttime forittofiletheobjectionswithinthetimelimit.Itchosenottodoso.Also.wedonot consideritcorrecttocanceltheorderonthebasisofsomeconfusiononaccountofe-mail id.TheassesseeiswellawareoftheschemeofIncomeTaxActinIndiaandtime-barring natureofmajorityofactionsundertheAct.Assuch,itisnotdifficulttoexpectthe assessmentorderbyacertaindateorsoandtherefore,apartfromtheAO,itisequallythe responsibilityoftheassesseetocheckwiththeITportalfrequentlytoknowtheoutcome ofthescrutinyproceedingsgoingon. 5.2.6Wehavegivencarefulconsiderationstoallthefactsandcircumstancesofthecase. Weareoftheconsideredopinionthatthefilingofobjectionsisdelayed.But,whatis surprisingtonotethattheassesseestilldoesnotthinkthatitsobjectionsaredelayedand that,theyrequireduecondonationofthesame.Accordingly,theassesseehasnotapplied foranycondonationofdelay.Consequently,theobjectionsfiledcanonlybetreatedas non-est.Accordingly,theobjectionno1isnotacceptedandistherefore,rejected.Since theobjectionsfiledarebeingtreatedasnon-est,thereisnorequirementtoissue directionsonthemeritsofthecaseinrespectoftherestofthegroundstakenbythe assessee.Assuch,theentireobjectionsoftheassesseearetreatedtechnicallyas dismissed. 6.Inthelightoftheabovediscussion,wehavetoseewhetherthe assessmentorderhasbeenframedbytheRevenuewithinthetimeprovided undertheprovisionsoflaw.Thereisnoambiguitytothefactthatthetimelimit forfilingtheobjectionexpiredon29October2021andthereforethetimelimit availablewiththeassessingofficertoframetheassessmentunder143(3)ofthe Actreadwithsection144CoftheActisupto30November2021i.e.withinone monthfromtheofthemonthinwhichtheperiodoffilingofobjectionunder subsection(2)of144CoftheActexpires.Nevertheless,theassessmenthasbeen framedbytheAOundertheprovisionsofsection143(3)readwithsection144Cof theActdated18July2022. 7.Atthetimeofhearing,thelearnedARbeforeuscontendedthatthe assessmentframedbytheAOundertheprovisionsofsection143(3)readwith section144CoftheActvideorderdated18July2022isbarredbytimeand thereforethesameisliabletobequashed.ThelearnedARinsupportofhis contentionreliedonvariouscaselawsoftheTribunalasreproducedbelow: ITAno(TP).357/AHD/2022 Asstt.Year2018-19 5 1.PlanetOnline(P.)Ltd.Vs.ACIT[2016]65taxmann.com46(Hyderabad-Trib.) 2.AalayaJewelIndustry(P.)Ltd.Vs.ACIT[2018]93taxmann.com23(Chennai-Trib.) 3.TDKElectronicsAGVs.ACIT(Internationaltaxation)[2020]116taxmann.com986(Pune- Trib.) 4.YokogawaIndiaIndiaLtd.Vs.ACIT 5.AstroOffshorePte.Ltd.Vs.DCIT(Internationaltaxation)[2022]134taxmann.com99 (Delhi-Trib.) 8.Onthecontrary,thelearnedDRcontendedthatthedelayinpassingthe ordershouldbecondoned.Theld.DRvehementlysupportedtheorderofthe lowerauthorities. 9.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Thereisnodisputewiththefactthatthe assessmentorderundersection143(3)readwithsection144CoftheActhas beenframedbeyondthetimeprovidedunderthestatute.Theassessmentorder hasbeenframedundertheprovisionsofsection143(3)readwithsection144Cof theActdated18July2022whereasthelastdatefortheassessmentintheyearin disputelapses30-11-2021aspertheprovisionsofsub-section(4)tosection144C oftheAct.Therelevantextractofsub-section(4)tosection144CoftheActis extractedasunder: (4)TheAssessingOfficershall,notwithstandinganythingcontainedinsection 153 40 [orsection153B],passtheassessmentorderundersub-section(3)withinone monthfromtheendofthemonthinwhich,— (a) theacceptanceisreceived;or (b)theperiodoffilingofobjectionsundersub-section(2)expires. 9.1Inviewoftheabove,weholdthattheassessmentframedundersection 143(3)readwithsection144CoftheActisnotsustainablebeingbarredbytime andliabletobequashed.Inholdingso,wealsodrawsupportandguidancefrom theorderofPlanetOnline(Pvt.)Ltd.Vs.ACITreportedin65taxmann.46wherein itwasheldasunder: 7.Fromaliteralreadingoftheaboveprovisions,itisclearthatsection144CoftheI.T. ActdealswiththecircumstancesunderwhichtheAOcanmakeareferencetotheDRP andtheproceduretobefollowedbytheAOinmakingareferencetotheDispute ResolutionPanelandalsotheproceduretobefollowedbytheDRPwhiledealingwiththe ITAno(TP).357/AHD/2022 Asstt.Year2018-19 6 objectionsraisedbeforeitbytheassesseeandthepassingofthefinalassessmentorder bytheAO.Sub-section(1)providesthatuponthereceiptoftheorderoftheTransfer PricingOfficersuggestingtheadjustmentsafterdeterminationoftheALP,AOshallpassa draftassessmentorderandforwardthesametotheeligibleassessee,ifheproposesto make,onorafterthe1stdayofOctober,2009,anyvariationintheincomeorloss returnedwhichisprejudicialtotheinterestofsuchassessee.Inthecasebeforeus,in accordancewiththeaboveprovisions,theAOhaspassedthedraftassessmentorderon 14.03.2014.Subsection2ofsection144Cprovidesthatonreceiptofthedraftassessment order,theeligibleassesseeshall,within30daysofreceiptbyhimofthedraftassessment order,filehisacceptanceofthevariationstotheAOorfileitsobjections,ifany,tosuch variationwiththeDRPandtheAO.Sub-section(3)providesthatiftheassesseedoesnot exercisetheoptionsprovidedinsubsection-2,theAOshallpassthefinalassessment order.Subsection(4)providesthetimelimitwithinwhichthefinalassessmentorderisto bepassedi.e.onemonthfromtheendoftheMonthinwhichtheassesseeexercisesthe optionofacceptingthevariationorfailstofileitsobjectionswithintheperiodprescribed undersubsection(2)ofsection144C.Inthecasebeforeus,theassesseehasnot exercisedanyofthetwooptionswithinthespecifiedperiodof30daysofthereceiptofthe draftassessmentorder.Theconsequenceofthisinactionbytheassesseeisprovidedfor, undersubsections3and4ofsection144CoftheAct.Fromtheabove,itisclearthaton theexpiryoftheperiodofonemonthfromtheendofthemonthinwhichtheprescribed timetoexercisetheoptionbytheassesseeexpirestheAOisrequiredtopassthefinal assessmentorder.Iftheassesseeexercisestheoptionsoffilingitsobjectionsbeforethe DRP,thenundersubsection(5),theDRPshallissuesuchdirectionsasitdeemsfitforthe guidanceoftheAOtoenablehimtocompletetheassessment.Inthecasebeforeus,the assesseedidnotfiletheobjectionsbeforetheDRPwithintheprescribedtimeand therefore,theobjectionsarenotmaintainableuntilthedelayiscondonedbytheDRP.We findthattheDRPhasrefusedtocondonethedelayinraisingoftheobjectionsbeforeitby theassesseeandthereforeitamountstononadmissionofthegroundsandadjudication bytheDRP.Therefore,therearealsonodirectionsissuedbytheDRPfortheguidanceof theAOtoenablehimtocompletetheassessment.Therefore,thefinalassessmentorder passedbytheAOafterrejectionoftheassessee'sobjectionsbytheDRP'inlimini'isthus notsustainable.ThefinalassessmentorderpassedbytheAOdated7.1.2015allegedlyu/s 143(3)r.w.s.92CA(3)r.w.s.144C(5)isthereforetobequashed. 9.2Basedontheabovediscussion,weconcludethattheassessmenthasbeen framedbytheAOundersection143(3)readwithsection144CoftheActbeing barredbylimitation.Hence,theorderframedundersection143(3)readwith section144CoftheActisnotsustainable.Hence,theadditionsmadebytheAO onmeritareliabletobedeleted. 9.3Itisimportant,atthisjuncture,tonotethatwehavedecidedtheissuein favouroftheassesseeontechnicalgroundandtherefore,wedonotfindany reasontodealwiththegroundsonmeritraisedbyassessee.Assuch,oncethe orderindisputeisnotsustainable,thegroundsraisedbytheassesseeonmerit ITAno(TP).357/AHD/2022 Asstt.Year2018-19 7 becomeinfructuous.Accordingly,wedismissthegroundsraisedbytheassessee onmeritasinfructuous. 10.Intheresult,theappealoftheassesseeispartlyallowed. OrderpronouncedintheCourton18/08/2023atAhmedabad. Sd/-Sd/- (SIDDHARTHANAUTITAL)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated18/08/2023 Manish