Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 6319 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-03-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
I1
Next Hearing Date
22-03-2017
Assessment Year
2009-2010
Appeal Filed On
26-08-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I - 1 , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KUL DIP SINGH , JM IT A NO. 4544 /DEL/201 6 : ASSTT. YEAR : 2009 - 10 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD., ADD: C - 28 & 29, LOGIX PARK, WING - B, 1 ST FLOOR, SECTOR - 62, NOIDA - 201301 VS ASSTT. COMMIS SIONER OF INCOME TAX, CIRCLE - 2, NOIDA - 201301 (APPELLANT) (RESPONDENT) PAN NO. AAKCS9098M ASSESSEE BY : SH. GIRISH DAVE, ADV. & SH. ARTA TRANA PANDA , ADV. REVENUE BY : SH. NEERAJ KUMAR, SR. DR DATE OF HEARING : 22.03 .201 7 DATE OF PRONOUNCE MENT : 28 .03 .201 7 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.06.2016 OF LD. CIT(A) - 1, NOIDA . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ('LD. CIT (A)') HOLDING THAT THE APPEAL WAS NOT MAINTAINABLE BEFORE HIM BEING AN ORDER UND ER SECTION 144C READ WITH SECTION 143 (3) OF THE INCOME TAX ACT, 1961 ('THE ACT'] IS B AD IN LAW, ILLEGAL AND PERVERSE. ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ('LD. CIT (A) ') DISMISSING THE APPEAL AFTER HOLDING THE APPEAL AS NOT MAINTAINABLE IS BAD IN LAW, WITHOUT JURISDICTION AND PERVERSE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ('LD. CIT (A)') HAS E RRED IN MAKING IRRELEVANT AND UNCALLED FOR OBSERVATIONS ON THE CONDUCT OF THE APPELLANT AND THE OBSERVATIONS ARE REQUIRED TO BE EXPUNGED FOR THE REASON THAT HAVING HELD THE APPEAL AS NOT MAINTAINABLE, HE OUGHT NOT TO HAVE DECIDED ANY ISSUE RELATING TO THE APPEAL. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSMENT ORDER PASSED BY LEARNED ASSESSING OFFICER ('LD. AO') WAS BARRED BY LIMITATION AND BE DECLARED AS NON - EST IN LAW. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ('LD. AO') HAS ERRED IN CHARGING INTEREST UNDER SECTIONS 234A, 234B AND 234C OF THE ACT. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ('LD. AO') HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1 )(C) OF THE ACT. PRAYER OF THE APPLICANT THE APPELLANT HEREBY PRAYS YOUR HONOR AS UNDER: ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 3 1) THE ASSESSMENT ORDER PASSED BY LEARNED ASSESSING OFFICER ('LD. AO') WAS BARRED BY LIMITATION. HENCE, THE ORDER PASSED BY THE LD. A O IS VOID - AB - INITIO. 2) THE INTEREST U/S 234A, 234B AND 234C OF THE ACT SHOULD BE DELETED AND SHOULD NOT BE CHARGED TO THE APPELLANT COMPANY. 3) IN VIEW OF THE ABOVE, THE PENALTY PROCEEDINGS SHOULD NOT BE INITIATED ON THE APPELLANT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, VARY, OMIT, SUBSTITUTE, WITHDRAW, MODIFY OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL HEREIN OR SUBMIT SUCH FURTHER OBJECTIONS AS MAY BE CONSIDERED NECESSARY AT ANY TIME EITHER BEFORE OR DURING THE COURSE OF HEARING BEFORE THE BENCH OF APPELLATE TRIBUNAL, SO AS TO ENABLE THE LEARNED MEMBERS OF THE BENCH TO DECIDE THIS APPLICATION AND ON THE OBJECTIONS RAISED BY THE APPELLANT, IN ACCORDANCE WITH THE LAW. 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE ACTION OF THE LD. CIT(A) IN DISMISSING THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE APPEAL WAS NOT MAINTAINABLE. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARI NG AN INCOME OF RS.70,102/ - . THE CASE WAS SELECTED FOR SCRUTINY. THE AO NOTICED THAT THE ASSESSEE COMPANY IS 100% SUBSIDIARY OF ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 4 SAMSUNG HEAVY INDUSTRIES CO. LTD., KOREA WHOSE MAIN BUSINESS ENCOMPASSES SHIP BUILDING, OFF SHORE FLOATERS, DIGITAL DEVICES FOR SHIPS AND CONSTRUCTION AND ENGINEERING SERVICES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DISCLOSED TOTAL GROSS RECEIPT OF SERVICE INCOME OF RS.24,38,43,186/ - AND OTHER INCOME OF RS.47,08,251/ - . THE ASSESSEE ENTERED INTO IN TERNATIONAL TRACTIONS WI TH ITS ASSOCIATED E NTERPRISES (AES) AND FURNISHED FORM NO. 3ECB IN RELATION TO THE INTERNATIONAL TRANSACTIONS ENTERED INTO IT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO, THEREFORE, MADE A REFERENCE TO THE TRANSFER PRICING OFFICER ( TPO ) FOR DETERMINING THE ARM S LENGTH PRICE OF INTERNATIONAL TRANSACTION. THE TPO PASSED THE ORDER DATED 29.01.2013 U/S 92CA(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND PROPOSED AN ADJUSTMENT OF RS.14,33,87,402 / - ON ACCOUNT OF ARM S LENGTH PRICE. THE AO REPRODUCED THE FINDINGS GIVEN BY THE TPO AT PAGE NOS. 2 TO 13 OF THE IMPUGNED ORDER DATED 30.05.2013, FOR THE COST OF REPETITION, THE SAME ARE NOT REPRODUCED HEREIN. THE ASSESSEE OBJECTED THE RE JECTION OF THE TP STUDY AND STATED THAT THE ASSESSEE HAD APPLIED ALL APPROPRIATE FILTERS AND THAT THE TRANSFER PRICING STUDY EXPLAINED THE REASON FOR APPLICABILITY OF FILTER. THE ASSESSEE ALSO OBJECTED THE USE OF CERTAIN COMPARABLES WITH HIGH ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 5 MARGIN S AND U S E OF THE FINANCIA L DATA PERTAINING TO A SINGLE YEAR I.E. FINANCIAL YEAR 2008 - 09. THE AO DEALT WITH THE OBJECTION IN PARAS 7, 7.1, 7. 4 & 7.5 OF THE ASSESSMENT ORDER, FOR THE COST OF REPETITION, THE FINDINGS GIVEN THEREIN ARE NOT REPRODUCED. THE ASSESSEE ALSO OBJECTED THE AP PLICATION OF 25% RELATED PARTY COMPARABLES BY THE TPO AND ALSO OBJECTED INCLUSION OF CERTAIN FILTERS BY THE TPO WHICH ARE CLAIMED TO BE DISSIMILAR. THE ASSESSEE STATED THAT THE RISK ANALYSIS OF THE ASSESSEE HAD BEEN IGNORED BY THE TPO. THE AO DISCUSSED THE RELEVANT OBJECTION AND GAVE HIS FINDINGS IN PAGES 20 TO 34 OF THE ASSESSMENT ORDER AND THEREAFTER, COMPUTED THE ADJUSTMENT ON ACCOUNT OF ARM S LENGTH PRICE AT RS.2, 05, 79,242/ - IN PARA 11 OF THE ASSESSMENT ORDER WHICH READ S AS UNDER: 11. COMPUTATION OF AR MS LENGTH PRICE: THE ARITHMETIC MEAN OF THE PROFIT LEVEL INDICATORS IS TAKEN AS THE ARMS LENGTH MARGIN. BASED ON THI S, THE ARMS LENGTH PRICE OF I T ENABLED SE RVICES RENDERED BY THE TAXPAYER TO ITS AE(S) IS COMPUTED BY TAKING PLI AS OP/T C . THE ARITHMETIC MEAN OF OPERATING PROFIT OVER THE T OTAL COST OF THE MARGINS OF THE COMPARABLES FOR THE FINANCIAL YEAR WORKS OUT TO 38.50% . THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS VARIOUS ASSOCIATED ENTERPRISES IS WOR KED OUT AS UNDER: ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 6 OPERATING COST(A') 39,09,18,721 OP/TC 38.50% MARGIN (B) 7,35,03,707 ARM'S LENGTH PRICE(A+B)=C 2 6,44,22,42 8 PRICE CHARGED B Y THE ASSESSEE(D) 24,38,43,186 DIFFERENCE (C - D) 2,05,79,242 % OF DIFFERENCE WITH INTERNATIONAL TRANSACTION 8.44% ADJUSTMENT 2,05,79,242 SINCE THE PRICE CHARGED BY THE ASSESSEE VARY BY MORE THAN 5% FROM THE VALUE OF INTERNATIONAL TRANSACTION, AN ADJUSTMENT OF RS. 2,05,79,242/ - FOR PROVISION OF IT ENABLED SERVICES IS TO BE MADE TO THE INCOME OF THE ASSESSEE, BEING THE D IFFERENCE BETW EEN THE ARM'S LENGTH PRICE AND THE PRICE CHARGED BY THE ASSESSEE FROM ITS AES. THE ASSESSING OFFICER SHALL ENHANCE THE INCOME OF THE ASSESSEE BY AN AMOUNT OF RS.2,05,79,242/ - WHILE COMPUTING ITS TOTAL INCOME. THE ASSESSING OFFICER MAY EXAMINE ISSUE OF INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT IN ACCORDANCE WITH EXPLANATION 7 OF THE SAME.' 5. ACCORDINGLY, ADDITION OF RS.2,05,79,242/ - WAS MADE. 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO OBSERVED T HAT THE IMPUGNED ASSESSMENT ORDER WAS PASSED BY THE AO U/S 144C OF THE ACT WHICH WAS NOT APP EALA BLE U/S 246A OF THE ACT. THE LD. CIT(A) HELD ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 7 THAT THE PRESENT APPEAL WAS NOT MAINTAINABLE BEFORE HIM BY OBSERVING IN PARA 3 OF THE IMPUGNED ORDER AS UNDER: 3. THE IMPUGNED ASSESSMEN T ORDER IS PASSED BY THE ID. A.O. U/S 144C OF I.T. ACT, 1 961 WHICH IS NOT APPEALABLE U/S 246A OF I .T. ACT, 1961. THE PROVISIONS OF SECTION 246A WHI CH DEMARCATES THE JURISDICTION OF THE CIT( A) DOES NOT INCLUDE AN ORDER PASSED UNDER SEC TION 144C OF I.T. ACT, 1961. AN APPEAL AGAINST AN ORDER PASSED U/S 144C IS SPECIFICALLY COVERED UNDER T HE PROVISIONS OF SECTION 253(1)( D) OF I.T. ACT, 1961 AND IS SPECIFICALLY EXCLUDED UNDER THE PROVISIONS OF SECTION 246A(1)(BA). IN VIEW OF THIS THE PRESEN T APPEAL IS NOT CAPABLE OF GETTING ADJUDICATED BY ME FOR WANT OF JURISDICTION AVAILABLE WITH ME. THIS POSITION IS ALSO CLEAR FROM THE EXCLUSION IN SECTION 246(1) (A) WHERE AN ORDER PASSED UNDE R SUB SECTION 3 OF SECTION 143 IS APPEALABLE BEFORE CIT(A) BUT WI TH THE EXCEPTION OF AN ORDER PASSED IN PURSUANCE OF DIRECTIONS OF THE DISPUTE RESOL UTION PANEL. ADMITTEDLY, THE PRESENT APPEAL IS AGAINST AN ORDE R WHICH IS PASSED U/S. 144C OF I .T. ACT, 1961 AND EVEN THOUGH THE LD. A.O. HAD INVOKED THE PROVISIONS OF SECTIO N 143(3) OF I.T. ACT, 1961 THE EFFECT OF SECTION 144C IS NOT REMOVED AND CANNOT BE IGNORED. IN VIEW OF THIS THE PRESENT APPEAL IS NOT MAINTAINABLE BEFORE ME. 7 . IN THE PRESENT CASE, T HE LD. CIT(A) ALTHOUGH HELD THAT THE APPEAL BEFORE HIM WAS NOT MAINTAIN ABLE. HOWEVER, HE DECIDED THE ISSUE RAISED BY THE ASSESSEE RELATING TO LIMITATION OF THE ASSESSMENT ORDER PASSED BY THE AO IN PARA S ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 8 4 TO 23 OF THE IMPUGNED ORDER FOR THE COST OF REPETITION, THE SAME IS NOT REPRODUCED HEREIN. 8. NOW THE ASSESSEE IS IN APPE AL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ORDER WAS PASSED BY THE AO U/S 143(3) R.W.S. 144C OF THE ACT AND IT WAS NOT A DRAFT ASSESSMENT ORDER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT PREFER TO FILE THE OBJECTION BEFORE THE DISPUTE RES OLUTION PANEL , RATHER PREFERRED AN APPEAL BEFORE THE LD. CIT(A) . IT WAS SUBMITTED THAT THE PROVISIONS OF CLAUSE (2) OF SUB - SECTION (V) OF SECTION 144C OF THE ACT GIVES A CHOICE TO THE ASSESSEE EITHER TO GO BEFORE THE DRP OR PREFERRED TO NORMAL APPELLATE CH ANNEL . IT WAS SUBMITTED THAT THE ASSESSEE PREFERRED TO FILE AN APPEAL BEFORE THE LD. CIT(A). A REFERENCE WAS ALSO MADE TO THE CIRCULAR NO. 5/2010 DATED 03.06.2010 WHICH WAS CORRECTED BY CIRCULAR NO. 5/2010 / /[F.NO.142/13/2010 - SO (TPL)] DATED 30.09.2010 WHER EIN IN PARA 45.4 IT HAS BEEN CLARIFIED THAT THE ASSESSEE CAN FILE AN APPEAL BEFORE THE LD. CIT(A) AGAINST THE ASSESSMENT ORDER PASSED BY THE AO. 9 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND REITERATED TH E OBSERVATIONS MADE THEREIN. ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 9 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE AO HAD PASSED A DRAFT ASSESS MENT ORDER AND THE ASSESSEE FILED OBJECTION BEFORE THE DRP AGAINST THE SAID DRAFT ORDER. IT IS NOTICED THAT THE AO PASSED THE ASSESSMENT ORDER DATED 30.05.2013 U/S 144C R.W.S. 143(3) OF THE ACT BUT IN THE SAID ORDER IT IS NOT STATED ANYWHERE THAT THE ASSES SEE PREFER RED T O FILE OBJECTION BEFORE THE DRP. I T IS ALSO NOT BROUGHT ON RECORD TO SUBSTANTIATE THAT THE DRP HAD GIVEN ANY DIRECTION TO THE AO FOR PASSING THE ASSESSMENT ORDER U/S 144C OF THE ACT. THE PROVISION CONTAINED IN SECTION 144C OF THE ACT READ AS UNDER: '144C(1) THE ASSESSING OFFICER SHALL, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS ACT, IN THE FIRST INSTANCE, FORWARD A DRAFT OF THE PRO POSED ORDER OF ASSESSMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE DRAFT ORDER) TO THE ELIG IBLE ASSESSEE IF HE PROPOSES TO MAKE, ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY VARIATION IN THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. (2) ON RECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASSESSEE SHALL, WITHIN THIR TY DAYS OF THE RECEIPT BY HIM OF THE DRAFT ORDER, ( A ) FILE HIS ACCEPTANCE OF THE VARIATIONS TO THE ASSESSING OFFICER; OR ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 10 ( B ) FILE HIS OBJECTIONS, IF ANY, TO SUCH VARIATION WITH, ( I ) THE DISPUTE RESOLUTION PANEL; AND ( II ) THE ASSESSING OFFIC ER. (3) THE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT ON THE BASIS OF THE DRAFT ORDER, IF ( A ) THE ASSESSEE INTIMATES TO THE ASSESSING OFFICER THE ACCEPTANCE OF THE VARIATION; OR ( B ) NO OBJECTIONS ARE RECEIVED WITHIN THE PERIOD SPECIFIED IN SU B - SECTION (2). (4) THE ASSESSING OFFICER SHALL, NOTWITHSTANDING ANYTHING CON TAINED IN SECTION 153 (OR SEC. 153B) , PASS THE ASSESSMENT ORDER UNDER SUB - SEC TION (3) WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH, ( A ) THE ACCEPTANCE IS RECEIVED; OR ( B ) THE PERIOD OF FILING OF OBJECTIONS UNDER SUB - SECTION (2) EXPIRES. (5) THE DISPUTE RESOLUTION PANEL SHALL, IN A CASE WHERE ANY OBJECTION IS RECEIVED UNDER SUB - SECTION (2), ISSUE SUCH DIREC TIONS, AS IT THINKS FIT, FOR THE GUIDANCE OF THE ASSESSING O FFI CER TO ENABLE HIM TO COMPLETE THE ASSESSMENT. (6) THE DISPUTE RESOLUTION PANEL SHALL ISSUE THE DIRECTIONS RE FERRED TO IN SUB - SECTION (5), AFTER CONSIDERING THE FOLLOWING, NAMELY: ( A ) DRAFT ORDER; ( B ) OBJECTIONS FILED BY THE ASSESSEE; ( C ) EV IDENCE FURNISHED BY THE ASSESSEE; ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 11 ( D ) REPORT, IF ANY, OF THE ASSESSING OFFICER, VALUATION OFFICER OR TRANSFER PRICING OFFICER OR ANY OTHER AUTHORITY; ( E ) RECORDS RELATING TO THE DRAFT ORDER; ( F ) EVIDENCE COLLECTED BY, OR CAUSED TO BE COLLECTED BY, IT; AND ( G ) RESULT OF ANY ENQUIRY MADE BY, OR CAUSED TO BE MADE BY, IT. (7) THE DISPUTE RESOLUTION PANEL MAY, BEFORE ISSUING ANY DIREC TIONS 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 INCOME - TAX AUTHORITY AND REPORT THE RESULT OF THE SAME TO IT. (8) THE DISPUTE RESOLUTION PANEL MAY CONFIRM, REDUCE OR ENHANCE THE VARIATIONS PROPOSED IN THE DRAFT ORDER SO, HOWEVER, THAT IT SHALL NOT SET ASIDE ANY PROPOSED VARIATION OR ISSUE ANY DIRECTION UNDER SUB - SECTION (5) FOR FURTHER ENQUIRY AND PASSING OF THE ASSESSMENT ORDER. (9) IF THE MEMBERS OF THE DISPUTE RESOLUTION PANEL DIFFER IN OPINION ON ANY POINT, THE POINT SHALL BE DECIDED ACCORDING TO THE OP INION OF THE MAJORITY OF THE MEMBERS. (10) EVERY DIRECTION ISSUED BY THE DISPUTE RESOLUTION PANEL SHALL BE BINDING ON THE ASSESSING OFFICER. (11) NO DIRECTION UNDER SUB - SECTION (5) SHALL BE ISSUED UNLESS AN OPPORTUNITY OF BEING HEARD IS ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 12 GIVEN TO THE ASSE SSEE AND THE ASSESSING OFFICER ON SUCH DIRECTIONS WHICH ARE PREJUDICIAL TO THE INTEREST OF THE ASSESSEE OR THE INTEREST OF THE REVENUE, RESPEC TIVELY. (12) NO DIRECTION UNDER SUB - SECTION (5) SHALL BE ISSUED AFTER NINE MONTHS FROM THE END OF THE MONTH IN W HICH THE DRAFT ORDER IS FORWARDED TO THE ELIGIBLE ASSESSEE. (13) UPON RECEIPT OF THE DIRECTIONS ISSUED UNDER SUB - SECTION (5), THE ASSESSING OFFICER SHALL, IN CONFORMITY WITH THE DIRECTIONS, COMPLETE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SE CTION 153, THE ASSESSMENT WITHOUT PROVIDING ANY FURTHER OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE, WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH DIRECTION IS RECEIVED. (14) THE BOARD MAY MAKE RULES FOR THE PURPOSES OF THE EFFICIENT FUNCTIONIN G OF THE DISPUTE RESOLUTION PANEL AND EXPEDITIOUS DISPOSAL OF THE OBJECTIONS FILED UNDER SUB - SECTION (2) BY THE ELIGIBLE ASSESSEE. 11 . FROM THE PLAIN READING OF THE PROVISIONS CONTAINED IN SUB - SECTION (2) OF SECTION 144C OF THE ACT, IT IS CLEAR THAT ON R ECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASSESSEE SHALL FILE HIS OBJECTION, IF ANY, TO THE LD. DRP AND THE AO WITHIN 30 DAYS ON RECEIPT OF DRAFT ORDER , AND AS PER THE PROVISION CONTAINED IN SUB - SECTION (5), THE DRP SHALL , IN A CASE WHERE ANY OBJECTION IS RE CEIVED UNDER SUB - SECTION (2) OF SECTION 144C OF THE ACT SHALL , ISSUE SUCH DIRECTION AS IT THINKS FIT ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 13 FOR THE GUIDANCE OF THE AO TO ENABLE HIM TO COMPLETE THE ASSESSMENT. BUT IN THE PRESENT CASE, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT ANY DRAFT A SSESSMENT ORDER WAS PASSED BY THE AO OR THE OBJECTIONS WERE FILED BY THE ASSESSEE OR ANY DIRECTION WAS GIVEN BY THE LD. DRP. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN OBSERVING THAT THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO ON THE DIRECTION OF TH E LD. DRP. ON THE CONTRARY, THE AO PASSED THE ASSESSMENT ORDER U/S 143(3) R.W.S. 144C OF THE ACT. 12. NOW QUESTION ARISES AS TO WHETHER THE ASSESSEE CAN FILE THE APPEAL IN SUCH TYPE OF CASES WHERE OBJECTIONS WERE NOT FIL ED BEFORE THE LD. DRP . I N THIS REG ARD, CBDT S CIRCULAR NO. 5/2010 DATED 03.06.2010 AND CORRECTED BY CORRIGENDUM NO. 5/2010/ [F.NO.142/13/2010 - SO (TPL)] DATED 30.09 .2010 NOTICED IN FINANCE (NO. 2) ACT, 2009 IS CLEAR WHEREIN EXPLANATORY NOTE HAS BEEN GIVEN IN PARA 45.4 WHICH READS AS UNDER: 45.4 IT WOULD BE THE CHOICE OF THE ASSESSEE WHETHER TO FILE AN OBJECTION AGAINST THE DRAFT ASSESSMENT ORDER BEFORE THE DISPUTE RESOLUTION PANEL (DRP) OR TO PURSUE THE NORMAL CHANNEL OF FILING AN APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE COMMISSIONER O F INCOME - TAX (APPEALS). IN ORDER TO APPROACH THE DRP, THE ASSESSEE MUST FILE AN OBJECTION AGAINST THE DRAFT ASSESSMENT ORDER WITHIN THE PRESCRIBED TIME - LIMIT. IN CASE THE ASSESSEE DOES NOT FILE AN OBJEC TION, THE ASSESSING OFFICER SHALL PASS THE ASSESSMENT ORDER. THE ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 14 ASSESSEE CAN FILE AN APPEAL AGAINST SUCH ASSESSMENT ORDER BEFORE THE CIT (APPEALS). ONCE THE OPTION OF FILING AN OBJECTION AGAINST THE DRAFT ASSESSMENT ORDER BEFORE THE DRP HAS BEEN EXERCISED, THE ASSESSEE CANNOT WITHDRAW THE OBJECTION AND OPT F OR THE NORMAL CHANNEL OF FILING APPEAL BEFORE CIT (APPEALS). [EMPHASIS SUPPLIED] 13 . FROM THE AFORESAID PARA 45.4 OF THE CBDT CIRCULAR NO. 5/2010, IT IS CRYSTAL CLEAR THAT IN CASE THE ASSESSEE DOES NOT FILE OBJECTION, THE AO SHALL PASS THE ASSESSMENT OR DER AND THEREAFTER THE ASSESSEE CAN FILE AN APPEAL AGAINST SUCH ASSESSMENT ORDER BEFORE THE LD. CIT(A). IN THE PRESENT CASE ALSO THE ASSESSEE DID NOT FILE ANY OBJECTION BEFORE THE DRP AND FILED THE APPEAL BEFORE THE LD. CIT(A) , SINCE IT WAS THE CHOICE OF T HE ASSESSEE AS TO WHETHER TO FILE AN OBJECTION BEFORE THE DRP OR TO PURSUE THE NORMAL CHANNEL OF FILING APPEAL AGAINST THE ASSESSME NT ORDER BEFORE THE LD. CIT(A). THEREFORE, THE APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) WAS MAINTAINABLE. 14 . IN V IEW OF THE AFORESAID DISCUSSION, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LD. CIT(A) TO ADMIT THE APPEAL OF THE ASSESSEE AND DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 4544/DEL/2016 SAMSUNG HEAVY INDUSTRIES INDIA PVT. LTD. 15 1 5 . IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ( ORDER PRON OUNCED IN THE COURT ON 28 /0 3 / 2017 ) SD/ - SD/ - (KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 28 /03 /2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR
