DCIT, New Delhi V. Newbury Oil Company Ltd., New Delhi

ITA 5398/DEL/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0174 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMIT GOEL
• Keywords: Transfer pricing; Residential status; Search and seizure; Document seized; International transaction; Initiation of penalty proceedings; Wholly owned subsidiary; Documents seized; Set aside
• Section: 271(1)(c); 143(3); 142(1); 153A; 144C; 264; 113; 13; 153C; 6; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NOS. 5398 & 5399/DEL/2015 (ASSESSMENT YEAR: 2011-12 & 2012-13) DCIT, CENTRAL CIRCLE-19 NEW DELHI VS. NEWBURY OIL COMPANY LTD., C/O MR. ASEEM CHAWLA, ADVOCATE E-200, GREATER KAILASH-I NEW DELHI PAN: AADCN3458P APPELLANT RESPONDENT C.O. NOS. 475 & 476/DEL/2015 (IN ITA NOS. 5398 & 5399/DEL/2015) (ASSESSMENT YEAR: 2011-12 & 2012-13) DCIT, CENTRAL CIRCLE-19 NEW DELHI VS. NEWBURY OIL COMPANY LTD., C/O MR. ASEEM CHAWLA, ADVOCATE E-200, GREATER KAILASH-I NEW DELHI PAN: AADCN3458P APPELLANT RESPONDENT ASSESSEE BY SH. AMIT GOEL, CA REVENUE BY MS. SUNITA SINGH, CIT/DR DATE OF HEARING: 20 /07/2021 PRONOUNCEMENT ON 20 /07/2021 2 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDERS DATED 12/06/2015 PASSED IN APPEAL NOS. 264 & 265/14-15, BY THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS)- XXVII, NEW DELHI (LD. CIT(A)), IN THE CASES OF NE WBURY OIL COMPANY LTD. (THE ASSESSEE) FOR THE ASSESSMENT YEARS 2011-12 A ND 2012-13, THE REVENUE PREFERRED THESE APPEALS. THE ASSESSEE HAS A LSO FILED CROSS- OBJECTIONS AGAINST THESE APPEALS. 2. BRIEF FACTS OF THE CASE TO THE EXTENT OF NECESS ITY FOR DISPOSAL OF APPEALS ARE THAT THE ASSESSEE IS A COMPANY INCORPOR ATED IN NICOSIA, CYPRUS ON 17.02.2005 AS A 100% SUBSIDIARY OF GYNIA HOLDINGS LTD. IN FINANCIAL YEAR 2006-07, IT BECAME 100% SUBSIDIARY O F FOCUS OIL INC., BVI. IT HAD A SHARE CAPITAL OF 50000 CYP. COMPANY REGISTRAT ION NUMBER IS 157598 AND SHRI KUL BHUSHAN SHARMA WAS ONE OF ITS D IRECTORS. ASSESSEE COMPANY-COMPANY ACQUIRED PAN FROM INDIA BEARING NO. AADCN3458P AND STARTED FILING ITS RETURN OF INCOME IN INDIA SI NCE A.Y. 2011-12. THROUGH A SHARE EXCHANGE AGREEMENT DATED 17.04.2008, IT BEC AME THE SUBSIDIARY OF INDUS GAS LTD. AND THROUGH A PRODUCTION SHARING AGREEMENT DATED 18.02.2005, I.E. VERY NEXT DAY TO ITS INCORPORATION , IT BECAME THE OWNER OF 25% PARTICIPATING INTEREST IN EXPLORATION RIGHT OF RJ-ON/6 OIL BLOCK OF RAJASTHAN ALLOTTED TO M/S. FOCUS ENERGY LTD. 3. PURSUANT TO SEARCH AND SEIZURE OPERATION U/S. 13 2 OF THE INCOME- TAX ACT, 1961 (THE ACT) CONDUCTED ON 22.03.2012 I N M/S. FOCUS ENERGY GROUP OF CASES, SATISFACTION NOTE FOR INVOKING THE PROVISIONS OF SECTION 153C OF THE ACT AGAINST THE ASSESSEE WAS RECORDED O N 18.11.2013 AND 3 NOTICE U/S. 153C WAS ISSUED TO THE ASSESSEE. ASSESS EE FILED RETURN OF INCOME DECLARING A LOSS OF RS.2,08,79,67,795/- FOR THE ASSESSMENT YEAR 2011-12 AND RS.19,89,26,549/- FOR THE ASSESSMENT YE AR 2012-13. BUT THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT AT NIL I NCOME FOR BOTH THE YEARS BY DISALLOWING THE LOSSES CLAIMED BY ASSESSEE AND SIMULTANEOUSLY, INITIATED PROCEEDINGS U/S. 271(1)(C) OF THE ACT. 4. AGGRIEVED BY THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE INCOME AT NIL INSTEAD OF LOSSES DECLARED BY THE ASS ESSEE, CHALLENGING THE JURISDICTION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEALS FOR BOTH THE YEARS BEFORE CIT(A) AND BY WAY OF IMPUGNED ORDERS, THE CIT(A) ALLOWED THE APPEALS, RETURNING A FINDING THAT THE A SSESSEE IS A FOREIGN COMPANY, VIZ., THE ELIGIBLE COMPANY U/S. 144C(15) O F THE ACT AND THEREFORE, IN THE FIRST INSTANCE, THE ASSESSING OFF ICER SHOULD HAVE ISSUED A DRAFT ASSESSMENT WHICH IS NOT DONE IN THE INSTANT C ASES. LEARNED CIT(A) FURTHER OBSERVED THAT NO PROPER SATISFACTION IN THE CASE OF ASSESSEE QUA THE MATERIAL SEIZED IS RECORDED BY THE ASSESSING OF FICER. LD. CIT(A), ACCORDINGLY, QUASHED THE ASSESSMENT, AGGRIEVED BY W HICH THE REVENUE PREFERRED THESE TWO APPEALS. ASSESSMENT YEAR 2011-12: 5. ARGUMENT OF THE LD. AR IS THREE-FOLD. FIRSTLY, T HAT THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER THAT ANY DOCUMENT BELONGING TO THE ASSESSEE WAS FOUND DURING THE COUR SE OF SEARCH AND BASING ON THE DECISIONS IN THE CASE OF PEPSI FOODS (P) LTD. V. ACIT (2014) 52 TAXMANN.COM 220 (DELHI), PEPSICO INDIA HOLDINGS (P) LTD. VS. ACIT (2014) 50 TAXMANN.COM 299 (DELHI), CIT VS. ARPIT LA ND (P) LTD. (2017) 78 TAXMANN.COM (BOM), PR. CIT V. INDEX SECURITIES (P) LTD. (2017) 86 4 TAXMANN.COM 84 (DELHI), PCIT V. DREAMCITY BUILDWELL (P) LTD. 417 ITR 617 (DEL) AND CANYON FINANCIAL SERVICES LTD. V. ITO (20 17) 84 TAXMANN.COM 74, HE ARGUED THAT THE ASSESSMENT ORDER IS LIABLE T O QUASHED. SECOND LIMB OF THE ARGUMENT IS THAT NO INCRIMINATING MATERIAL W AS FOUND DURING THE SEARCH QUA THE ASSESSMENT ORDER AND THE THEREFORE, INVOKING T HE JURISDICTION BY THE ASSESSING OFFICER IS BAD. FOR T HIS PURPOSE, HE PLACED RELIANCE ON THE DECISION IN THE CASE OF SINGHAD TEC HNICAL EDUCATION SOCIETY (2017) 84 TAXMANN.COM 290(SC), PR. CIT VS. INDEX SECURITIES (P) LTD. (2017) 86 TAXMANN.COM 84. LASTLY HE ARGUED THA T THE ASSESSEE IS A FOREIGN COMPANY AND THEREFORE, THE ASSESSING OFFICE R IS REQUIRED TO FOLLOW THE PROCEDURE PROVIDED UNDER SECTION 144C OF THE ACT BY PASSING THE DRAFT ASSESSMENT ORDER, BUT SUCH A PROCEDURE IS NOT FOLLOWED BY THE ASSESSING OFFICER AND THEREFORE, THE ASSESSMENT ORD ER NEEDS TO BE QUASHED. RELIANCE IS PLACED ON THE DECISIONS IN THE CASE OF TURNER INTERNATIONAL INDIA PVT. LTD. V. DCIT (2017) 398 IT R-177. LEARNED DR PLACES RELIANCE ON THE ORDERS OF THE ASSESSING OFFICER. LA STLY, IT WAS CONTENDED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURI NG THE SEARCH AND, THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, (2016) 380 ITR 573 (DEL), NO ADDITION COULD BE MADE. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE ON EITHER SIDE. IT CAN BE SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 6(3) OF THE ACT FOR BRINGING TO TAX THE INCOME OF THE ASSESSEE AS TAXAB LE IN INDIA; THAT THE ASSESSING OFFICER ALSO INVOKED THE PROVISIONS OF SE CTION 9 OF THE ACT ON THE GROUND THAT DURING THE ASSESSMENT YEAR 2011-12, THE ASSESSEE 5 EARNED PROFIT FROM COMPANIES WHOSE UNDERLYING ASSET S WERE WHOLLY AND TOTALLY SITUATED IN INDIA OR OTHERWISE ALSO THE REV ENUE WAS EARNED ONLY BECAUSE OF UNDERLYING ASSETS OR SOURCE OF INCOME IS IN INDIA; AND THAT AS PER SECTION 9 OF THE ACT, THE INCOME ARISING ON ACC OUNT OF PROFIT WHOSE UNDERLYING ASSETS ARE SITUATED IN INDIA ARE TO BE T AXED IN INDIA. 7. ON THE ASPECT OF NON-RECORDING OF SATISFACTION T HAT ANY PARTICULAR DOCUMENT BELONGING TO THE ASSESSEE WAS FOUND AND SE IZED DURING THE COURSE OF SEARCH, SATISFACTION OF THE LEARNED ASSES SING OFFICER IN HIS CAPACITY OF THE LEARNED ASSESSING OFFICER OF THE SE ARCHED PERSON WAS RECORDED ON 18/11/2013. 8. LD. CIT(A), EXAMINED ALL THE MATERIAL PAPERS ON RECORD INDICATED BY THE ASSESSING OFFICER FOR INITIATING PROCEEDINGS UN DER SECTION 153C OF THE ACT, AND RETURNED THE FINDING OF FACTS TO THE EFFEC T THAT THE LEARNED ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY PERTAINI NG TO THE SEIZED DOCUMENTS NOR VERIFIED THE TRANSACTIONS RECORDED ON THEM WITH THE RELATED PARTIES; THAT NO EVIDENCE WAS BROUGHT ON RE CORD BY THE LEARNED ASSESSING OFFICER RECORDING THE EXISTENCE OF THE OR IGINAL DOCUMENTS, IF SO, TO WHOM THEY BELONGED, AND WHETHER TO THE ASSESSEE OR TO THE RELATED PARTIES WHICH HAD A TRANSACTION WITH THE ASSESSEE; THAT IN HER OPINION, LEARNED ASSESSING OFFICER SHOULD HAVE MADE A PROPER ENQUIRY WITH REGARD TO THE DIFFERENT TRANSACTIONS ENTERED INTO BY THE A SSESSEE WITH THE PARTIES WITH WHOM SUCH TRANSACTIONS WERE CARRIED OUT; THAT THE PHOTOSTAT COPIES HAVE VERY LITTLE EVIDENTIARY VALUE AND THOSE ARE AD MISSIBLE AS EVIDENCE IF THE ORIGINAL IS ALSO PRODUCED AND THAT WHICH CAN ON LY BE RELIED UPON AS A CORROBORATIVE PIECE OF EVIDENCE; AND THAT THE DOCUM ENTS WHICH WERE IDENTIFIED BY THE ASSESSING OFFICER FOR INITIATING PROCEEDINGS UNDER 6 SECTION 153C OF THE ACT WERE NOT CONSIDERED BY HIM FOR DETERMINING THE INCOME OF THE ASSESSEE UNDER SECTION 153C OF THE AC T. 9. SHE FURTHER OBSERVED THAT THE DOCUMENTS THAT WER E CONSIDERED BY THE LEARNED ASSESSING OFFICER WERE NOT FOUND INCRIM INATING IN NATURE AND THE CONTENTS OF THE SAME FULLY EXPLAINED BY THE ASS ESSEE AND ACCEPTED BY THE LEARNED ASSESSING OFFICER; THAT SUCH SEIZED DOC UMENTS WERE ONLY REFERRED FOR ASCERTAINING THE RESIDENTIAL STATUS OF THE ASSESSEE COMPANY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6 OF T HE ACT AND NOT FOR DETERMINING ANY UNDISCLOSED INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153C OF THE ACT, BUT SUCH DOCUMENTS SERV ED THE PURPOSE AS A FOOT BOARD TO REOPEN THE CASE OF THE ASSESSEE COMPA NY FOR A BLOCK PERIOD OF 6 YEARS. 10. ON THE ANALYSIS OF ALL THE MATERIAL AVAILABLE B EFORE HER, LD. CIT(A) FOUND THAT THE SATISFACTION NOTE WAS RECORDED IN WH OLESALE CONSOLIDATED MANNER PERTAINING TO ALL THE INDIAN COMPANIES AND O VERSEAS COMPANIES WHICH MAY HAVE ONE OR THE OTHER TRANSACTION WITH M/ S FOCUS ENERGY LTD, AN INDIAN INCORPORATED COMPANY, RESIDENT IN INDIA A ND WERE PUT TOGETHER, WITH INTERMIXED, UNCONNECTED AND UNRELATED ASPECTS PERTAINING TO THE ASSESSEE COMPANY; THAT THE CONTENTS OF THE SEIZED M ATERIAL WERE NOT BROUGHT ON RECORD TRANSLATING THE SAME INTO PROPER SATISFACTION NOTE OTHER THAN JUST IDENTIFYING THEM TO UTILISE FOR THE PURPOSE OF REOPENING THE CASE WHICH WAS NOT DESIRABLE TO BE APPROVED. WI TH SUCH OBSERVATIONS AND FINDING OF FACTS, LD. CIT(A) HELD THAT THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE REGARDING THE UNLAWFUL INITIATION O F PROCEEDINGS UNDER SECTION 153C OF THE ACT. 7 11. LD. AR ARGUED BEFORE US ON THE SAME LINES OF OB SERVATIONS AND FINDING OF FACTS RETURNED BY THE LD. CIT(A) AND PLA CED RELIANCE ON THE DECISIONS REPORTED IN PEPSI FOODS (P.) LTD.V ACIT [ 2014] 52 TAXMANN.COM 220 (DELHI) AFFIRMED BY THE HONBLE SUPREME COURT I N THE CASE REPORTED IN 2017 (12) TMI 588 SUPREME COURT AND PEPSI INDIA HOLDINGS (P) LTD VS. ACIT (2014) 50 TAXMANN.COM 299 (DELHI) AND SOME OTH ER DECISIONS OF BOMBAY AND OTHER HIGH COURTS. 12. FOR CONVENIENCE SAKE, WE REFER TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOOD S (P.) LTD. V ACIT [2014] 52 TAXMANN.COM 220(DELHI) WHEREIN IT WAS HELD AS UN DER :- 6. ON A PLAIN READING OF SECTION 153C, IT IS EVIDENT T HAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE 'SATISFIED' THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED 'BELONGS TO' A PER SON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOVER SUCH DOCUMENT TO THE A SSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON (OTHER T HAN THE SEARCHED PERSON). FURTHERMORE, IT IS ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE-ASSESS HIS INCOME IN ACCORDANCE WI TH THE PROVISIONS OF SECTION 153A. THEREFORE, BEFORE A NOTICE UNDER SECT ION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP I S THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE A T A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS - AFTER SUCH SATIS FACTION IS ARRIVED AT - THAT THE DOCUMENT IS HANDED OVER TO THE ASSESSING O FFICER OF THE PERSON TO WHOM THE SAID DOCUMENT 'BELONGS'. IN THE PRESENT CASES IT HAS BEEN URGED ON BEHALF OF THE PETITIONER THAT THE FIRST ST EP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY T O EXAMINE THE PROVISIONS OF PRESUMPTIONS AS INDICATED ABOVE. SECT ION 132(4A)(I) CLEARLY STIPULATES THAT WHEN INTER ALIA ANY DOCUMENT IS FOU ND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SI MILARLY PROVIDED IN SECTION292C(1)(I). IN OTHER WORDS, WHENEVER A DOCUM ENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED THE NORMAL PRESUMPTION IS THAT THE SAID 8 DOCUMENT BELONGS TO THAT PERSON. IT IS FOR THE ASSE SSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATIS FACTION' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THERE MU ST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFOR E HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELO NG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE THE PLACE OF 'SATISFACTION'. 11. IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONE R AND THAT THE ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CAS E FOR ISSUANCE OF A NOTICE UNDER SECTION 153C, THERE IS NOTHING WHICH WOULD IN DICATE AS TO HOW THE PRESUMPTIONS WHICH ARE TO BE NORMALLY RAISED AS IND ICATED ABOVE, HAVE BEEN REBUTTED BY THE ASSESSING OFFICER. MERE USE OR MENTION OF THE WORD 'SATISFACTION' OR THE WORDS 'I AM SATISFIED' IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SA TISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESS ING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUME NTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. WE ARE AFRAI D, THAT GOING THROUGH THE CONTENTS OF THE SATISFACTION NOTE, WE A RE UNABLE TO DISCERN ANY 'SATISFACTION' OF THE KIND REQUIRED UNDER SECTI ON 153C OF THE SAID ACT. 12. THIS BEING THE POSITION THE VERY FIRST STEP PRIOR T O THE ISSUANCE OF A NOTICE UNDER SECTION153C OF THE SAID ACT HAS NOT BE EN FULFILLED. INASMUCH AS THIS CONDITION PRECEDENT HAS NOT BEEN MET, THE N OTICES UNDER SECTION153C ARE LIABLE TO BE QUASHED. IT IS ORDERED ACCORDINGLY. THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHALL BE NO O RDER AS TO COSTS. THE AFORESAID DECISION OF HONBLE HIGH COURT HAS SI NCE BEEN AFFIRMED BY HONBLE SUPREME COURT REPORTED AT 2017 (12) TMI 588 SUPREME COURT. 13. THE UNCHALLENGED OBSERVATIONS OF THE LD. CIT(A) CLEARLY ESTABLISHES THAT THE LEARNED ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY PERTAINING TO THE DOCUMENTS SEIZED, NO DEADLY CONDUCT ANY VERIFIC ATION AS TO THE TRANSACTIONS RECORDED ON THEM WITH RELATED PARTIES, BUT ON THE OTHER HAND, AS OBSERVED BY THE LD. CIT(A) HE SIMPLY PLACE D RELIANCE ON CERTAIN 9 PHOTOSTAT COPIES AND RECORDED HIS SATISFACTION NOTE IN A WHOLESALE CONSOLIDATED MANNER PERTAINING TO ALL THE INDIAN CO MPANYS AND OVERSEAS COMPANIES WHICH MAY HAVE ONE OR THE OTHER TRANSACTI ONS WITH M/S FOCUS ENERGY LTD WHICH IS AN INDIAN INCORPORATION AND THE ENTIRE FACTS AND TRANSACTIONS WERE PUT TOGETHER, WITH INTERMIXED, UN CONNECTED AND UNRELATED ASPECTS PERTAINING TO THE ASSESSEE COMPAN Y. WHEN WE LOOK AT THIS FACT IN THE LIGHT OF THE LAW DECLARED BY THE H ONBLE JURISDICTIONAL HIGH COURT AS EXTRACTED (SUPRA), IT IS CLEAR THAT THE SO -CALLED SATISFACTION RECORDED BY THE LEARNED ASSESSING OFFICER TO INVOKE THE JURISDICTION IS NOT A SPECIFIC SATISFACTION WITH REFERENCE TO ANY PARTI CULAR DOCUMENT BELONGING TO THE ASSESSEE AND, THEREFORE, IT GOES T O THE ROOT OF THE MATTER AND VITIATES THE ASSUMPTION OF JURISDICTION BY THE LEARNED ASSESSING OFFICER TO REOPEN THE ASSESSMENT PROCEEDI NGS BY ISSUANCE OF NOTICE UNDER SECTION 153C OF THE ACT. 14. NOW WE COME TO THE NEXT CONTENTION OF THE ASSES SEE THAT FOR NON- ADHERENCE OF THE PROVISIONS OF SECTION 144C OF THE ACT, THE ASSESSMENT IS BAD IN LAW, THE FIRST CONTENTION OF THE ASSESSEE IS THAT THEY ARE FOREIGN COMPANY AND THEREFORE, FALLS WITHIN THE EXPRESSION ELIGIBLE ASSESSEE U/S. 144C OF THE ACT. ON THIS ASPECT IT COULD BE SE EN FROM THE RECORD THAT THE ASSESSEE COMPANY INCORPORATED IN CYPRUS AS PER LAWS OF CYPRUS AND HAVE BEEN RESIDENT OF CYPRUS. THE ASSESSEE HAS BEEN FILING THE INCOME- TAX RETURN WITH CYPRUS REVENUE AUTHORITIES. COPIES OF ITRS ARE ALSO PROVIDED BY FT & TR DIVISION TO THE ASSESSING OFFIC ER. ON EXAMINING THESE DOCUMENTS, LD. CIT(A) RECORDED FINDING OF FACT THAT THE INFORMATION WITH THE LD. ASSESSING OFFICER AMPLY AND EVIDENTLY SUBST ANTIATE AS A POINTER TO THE ASSESSEES CONTENTION THAT IT IS A RESIDENT OF CYPRUS. LEARNED CIT(A) 10 FURTHER REFERRED TO THE OBSERVATIONS OF THE ASSESSI NG OFFICER OF THE ASSESSEE IN CYPRUS THAT THE ASSESSEE WAS REGISTERED OUTSIDE INDIA IN ACCORDANCE WITH THE LAWS OF CYPRUS AND SUCH LOCATIO N WAS NOT CHALLENGED. CIT(A) FOUND THAT THE SUBMISSIONS MADE BY THE ASSESSEE TALLIED WITH THE INFORMATION AND DOCUMENTS PROVIDED BY FT & TR, MORE PARTICULARLY AT PARAGRAPH NO. 5.9 OF SUCH AN ASSESS MENT ORDER. 15. THERE IS NO CHALLENGE TO THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE IS A RESIDENT IN CYPRUS. LEARNED CIT(A) EX AMINED THE MATERIAL AVAILABLE BEFORE HER IN THE LIGHT OF THE PROVISIONS OF SECTION 6(3) OF THE ACT AND ALSO THE ORDERS PASSED BY TPO IN THE CASE O F FOCUS ENERGY LTD FOR THE ASSESSMENT YEARS 2006-07 TO 2012-13. ALL THESE MATERIALS HAD SHOWN THAT M/S. FOCUS ENERGY LTD. HAD INTERNATIONAL TRANS ACTIONS WITH THE ASSESSEE. M/S. FOCUS ENERGY LTD. IS UNDISPUTEDLY AN INDIAN COMPANY. IT IS, THEREFORE, INFERRED THAT SINCE THE TRANSACTION BETW EEN FOCUS ENERGY LTD. WITH THE ASSESSEE WAS ACCEPTED AS AN INTERNATIONAL TRANSACTION CONTINUOUSLY OVER A PERIOD OF TIME, IT GOES WITHOUT SAYING THAT OTHER PARTY, I.E., THE ASSESSEE IS A FOREIGN COMPANY. ANY TRANSACTION BETWEEN INDIAN COMPANY AND INDIAN COMPANY CANNOT BE AN INTE RNATIONAL TRANSACTION AND THEREFORE, THE INTERNATIONAL TRANSA CTION OF FOCUS ENERGY LTD. WHICH IS AN INDIAN COMPANY, WILL NECESSARILY B E WITH THE FOREIGN COMPANY. ON THIS PREMISE ALSO, CIT(A) CONCLUDED TH AT IT AN UNMISTAKABLE POINTER THAT THE ASSESSEE IS A FOREIGN COMPANY AND SUCH A FACT IS ADMITTED BY THE ASSESSING OFFICER WHILE DEALING WIT H THE TRANSACTIONS OF FOCUS ENERGY LTD. WITH ITS FOREIGN AES CONTINUOUSLY OVER A PERIOD OF TIME. BASING ON THESE FACTS, LEARNED CIT(A) CONCLUDED THA T THE MATERIAL ON RECORD IS MORE THAN ENOUGH TO CONCLUDE THAT THE ASS ESSEE IS A FOREIGN 11 COMPANY AND THEREFORE, UNDER THE PROVISIONS OF SECT ION 144C, THE ASSESSING OFFICER SHALL, IN THE FIRST INSTANCE, FOR WARD A DRAFT ORDER OF THE PROPOSED ASSESSMENT TO THE ASSESSEE IF HE PROPOSES TO MAKE ANY VARIATION WHICH IS PREJUDICIAL TO THE INTEREST OF A SSESSEE. 16. EVIDENTLY, NO DRAFT ORDER WAS PASSED IN THIS CA SE. HONBLE DELHI HIGH COURT IN THE CASE OF TURNER INTERNATIONAL INDI A PVT. LTD. VS. DCIT (SUPRA) HELD AS UNDER - 10. THE SHORT GROUND ON WHICH THE AFOREMENTIONED F INAL ASSESSMENT ORDERS AND THE CONSEQUENT DEMAND NOTICES HAVE BEEN CHALLENGED IS THAT THERE WAS NON-COMPLIANCE WITH THE MANDATORY PROVISI ON CONTAINED IN SECTION 144C(1) OF THE ACT REQUIRING THE AO TO FIRS T FRAME DRAFT ASSESSMENT ORDERS. 11. THE QUESTION WHETHER THE FINAL ASSESSMENT ORDE R STANDS VITIATED FOR FAILURE TO ADHERE TO THE MANDATORY REQUIREMENTS OF FIRST PASSING DRAFT ASSESSMENT ORDER IN TERMS OF SECTION 144C(1) OF THE ACT IS NO LONGER RES INTEGRA. THERE IS A LONG SERIES OF DECIS IONS TO WHICH REFERENCE WOULD BE MADE PRESENTLY. 12. IN ZUARI CEMENT LTD. V. ACIT (DECISION DATED 2 1ST FEBRUARY, 2013 IN WP(C) NO. 5557/2012), THE DIVISION BENCH (DB) OF THE ANDHRA PRADESH HIGH COURT CATEGORICALLY HELD THAT THE FAILURE TO P ASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1) OF THE ACT WOULD RESUL T IN RENDERING THE FINAL ASSESSMENT ORDER WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEABLE. IN THAT CASE, THE CONSEQUENT DEMAND NOTICE WAS ALSO SET ASIDE. THE DECISION OF THE ANDHRA PRADESH HIGH COURT WAS AFFIRMED BY THE SUPREME COURT BY THE DISMISSAL OF THE REVENU E'S SLP (C) [CC NO. 16694/2013] ON 27TH SEPTEMBER, 2013. 13. IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLU TION PANEL [2014] 369ITR 113 (MAD.), A SIMILAR QUESTION AROSE. THERE, THE REVENUE SOUGHT TO RECTIFY A MISTAKE BY ISSUING A CORRIGENDUM AFTER THE FINAL ASSESSMENT ORDER WAS PASSED. CONSEQUENTLY, NOT ONLY THE FINAL ASSESSMENT ORDER BUT ALSO THE CORRIGENDUM ISSUED THEREAFTER WAS CHALLENG ED. FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH COURT IN ZUARI CEMENT LTD. V. ACIT 12 (SUPRA) AND A NUMBER OF OTHER DECISIONS, THE MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL (SU PRA) QUASHED THE FINAL ORDER OF THE AO AND THE DEMAND NOTICE. INTERESTINGL Y, EVEN AS REGARDS THE CORRIGENDUM ISSUED, THE MADRAS HIGH COURT HELD THAT IT WAS BEYOND THE TIME PERMISSIBLE FOR ISSUANCE OF SUCH CORRIGEND UM AND, THEREFORE, IT COULD NOT BE SUSTAINED IN LAW. 14. RECENTLY, THIS COURT IN ESPN STAR SPORTS MAURI TIUS S.N.C. ET COMPAGNIE V. UNION OF INDI [2016] 388 ITR 383 (DEL. ), FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH COURT IN ZUARI CEMENT LTD. V. ACIT (SUPRA), THE MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL, CHENNAI (SUPRA) AS WELL AS THE BO MBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT ASSOCIATION V. DCIT (20 16) 290 CTR (BOM) 46, CAME TO THE SAME CONCLUSION. 15. MR. DILEEP SHIVPURI, LEARNED COUNSEL FOR THE R EVENUE SOUGHT TO CONTEND THAT THE FAILURE TO ADHERE TO THE MANDATORY REQUIREMENT OF ISSUING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1) OF THE ACT WOULD, AT BEST, BE A CURABLE DEFECT. ACCORDING TO H IM THE MATTER MUST BE RESTORED TO THE AO TO PASS A DRAFT ASSESSMENT ORDER AND FOR THE PETITIONER, THEREAFTER, TO PURSUE THE MATTER BEFORE THE DRP. 16. THE COURT IS UNABLE TO ACCEPT THE ABOVE SUBMIS SION. THE LEGAL POSITION AS EXPLAINED IN THE ABOVE DECISIONS IN UNA MBIGUOUS. THE FAILURE BY THE AO TO ADHERE TO THE MANDATORY REQUIREMENT OF SECTION 144C (1) OF THE ACT AND FIRST PASS A DRAFT ASSESSMENT ORDER WOULD RESULT IN INVALIDATION OF THE FINAL ASSESSMENT ORDER AND THE CONSEQUENT DEMAND NOTICES AND PENALTY PROCEEDINGS. 17. FOR THE AFOREMENTIONED REASONS, THE FINAL ASSE SSMENT ORDERS DATED 31ST MARCH, 2015 PASSED BY THE AO FOR AYS 200 7-08 AND 2008-09, THE CONSEQUENTIAL DEMAND NOTICES ISSUED BY THE AO A ND THE INITIATION OF PENALTY PROCEEDINGS ARE HEREBY SET ASIDE. 18. THE PETITIONS ARE ALLOWED IN THE ABOVE TERMS. NO ORDER AS TO COSTS. 17. FURTHER, REFERENCE WAS MADE BY THE LD. AR TO TH E CBDT CIRCULAR NO. 09/2013 DATED 19.11.2013 WHEREIN THE ASSESSING OFFICER IS REQUIRED TO FORWARD A DRAFT ASSESSMENT ORDER TO THE ELIGIBLE ASSESSEE, IF HE 13 PROPOSES TO MAKE, ON OR AFTER THE 1 ST DAY OF OCTOBER, 2009, ANY VARIATION IN THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. 18. FOR THE SAKE OF COMPLETENESS WE DEEM IT NECESSA RY TO EXTRACT THE CONTENTS OF CBDT CIRCULAR WHICH READS AS UNDER : SECTION 144C, PROVIDING FOR REFERENCE TO DISPUTE R ESOLUTION PANEL (DRP), WAS INSERTED IN THE INCOME-TAX ACT, 1961 BY FINANCE (NO.2) ACT, 2009. SUB SECTION (1) OF SECTION 144C READS AS UNDER: THE ASSESSING OFFICER SHALL, NOTWITHSTANDING ANYTH ING TO THE CONTRARY CONTAINED IN THIS ACT, IN THE FIRST INSTANCE, FORWA RD A DRAFT OF THE PROPOSED ORDER OF ASSESSMENT (HEREINAFTER IN THIS S ECTION REFERRED TO AS THE DRAFT ORDER) TO THE ELIGIBLE ASSESSEE IF HE PRO POSES TO MAKE, ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY VARIATION I N THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SU CH ASSESSEE. 2. EXPLANATORY CIRCULAR FOR FINANCE (NO.2) ACT, 200 9 I.E. CIRCULAR NO. 5 OF 2010 DATED 03.06.2010, IN PARA 45 HAS EXPLAINE D THE SAID NEW SECTION 144C AND THE CONSEQUENTIAL AMENDMENTS MADE IN OTHER SECTIONS OF INCOME-TAX ACT. PARA 45.5 OF THE CIRCULAR NO.5/2010 DATED 03.06.201 0 READS AS UNDER: 45.5 APPLICABILITY: THESE AMENDMENTS HAVE BEEN MAD E APPLICABLE WITH EFFECT FROM 1ST OCTOBER, 2009 AND WILL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010-11 AND SUBSEQUENT ASSESSMENT Y EARS. THE DISPUTE RESOLUTION PANEL RULES HAVE BEEN NOTIFIED BY S. O. NO. 2958 (E) DATED 20THNOVEMBER, 2009. IN THE ABOVE EXTRACTED PARA 45.5 THERE HAS BEEN AN INADVERTENT ERROR IN STATING THE APPLICABILITY OF THE PROVISIONS OF SECT ION 144C INSERTED VIDE FINANCE (NO.2) ACT, 2009 THAT AMENDMENTS WILL APPLY IN RELATION TO THE ASSESSMENT YEAR 2010- 11 AND SUBSEQUENT ASSESSMENT YEARS. ACCORDINGLY, PARA 45.5 IS REPLACED WITH THE FOLLOWI NG: 45.5. APPLICABILITY: SECTION 144C HAS BEEN INSERTE D WITH EFFECT FROM 1STAPRIL, 2009. ACCORDINGLY, THE ASSESSING OFFICER IS REQUIRED TO FORWARD A DRAFT ASSESSMENT ORDER TO THE ELIGIBLE ASSESSEE, IF HE PROPOSES TO MAKE, 14 ON OR AFTER THE 1STDAY OF OCTOBER, 2009, ANY VARIAT ION IN THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. IN OTHER WORDS SECTION 144C IS APPLICABLE TO ANY ORDER WHICH PROPOSES TO MAKE VARIATION IN INCOME OR LOSS RETURNED BY AN ELI GIBLE ASSESSEE, ON OR AFTER 1ST OCTOBER, 2009 IRRESPECTIVE OF THE ASSESSM ENT YEAR TO WHICH IT PERTAINS. AMENDMENTS TO OTHER SECTIONS OF THE INCOM E-TAX ACT REFERRED TO IN PARA 45.3 OF THE CIRCULAR 5/2010 DATED 3 RD J UNE, 2010 SHALL ALSO APPLY FROM 1ST OCTOBER, 2009 . 19. IT IS, THEREFORE, CLEAR THAT THE ASSESSMENT ORD ER IS BAD FOR INVOKING THE JURISDICTION U/S. 153C WITHOUT PROPER SATISFACT ION AND ALSO FOR NOT PASSING THE DRAFT ASSESSMENT ORDER AS REQUIRED U/S. 144C, AND AS EXPLAINED BY HONBLE DELHI HIGH COURT. 20. NOW, COMING TO THE LAST CONTENTION BASED ON THE DECISION OF KABUL CHAWLA (SUPRA), THERE IS A FINDING OF FACT RETURNED BY LD. CIT(A) THAT DOCUMENTS FOUND IN SEARCH WERE NOT INCRIMINATING IN NATURE; THAT THE CONTENTS OF THE SAME WERE FULLY EXPLAINED BY THE AS SESSEE AND ACCEPTED BY THE ASSESSING OFFICER; AND THAT THE SEIZED DOCUM ENTS WERE ONLY REFERRED FOR ASCERTAINING THE RESIDENCE STATUS OF T HE ASSESSEE COMPANY IN ACCORDANCE WITH THE PROVISIONS OF SECTION OF THE AC T AND NOT FOR DETECTING ANY UNDISCLOSED INCOME OF THE ASSESSEE AS PER THE P ROVISIONS OF SECTION153C OF THE ACT, BUT SERVED THE PURPOSE AS A FOOT BOARD TO REOPEN THE CASE OF THE ASSESSEE COMPANY FOR A BLOCK PERIOD OF SIX YEARS. 21. FOR THE REASONS STATED IN THE PRECEDING PARAGRA PHS, WE, THEREFORE, FIND THAT THE ORDER OF THE LD. CIT(A) DOES NOT SUFF ER ANY ILLEGALITY OR IRREGULARITY AND IT NEEDS TO BE UPHELD. CONSEQUENTL Y, WE FIND THE GROUNDS OF APPEAL OF THE REVENUE DEVOID OF MERIT AND ARE LI ABLE TO BE DISMISSED AND ACCORDINGLY DISMISSED. ASSESSMENT YEAR 2012-13: 15 22. IN THIS YEAR ALSO, THE ASSESSMENT ORDER SUFFERS ILLEGALITY AND IRREGULARITY FOR NOT FOLLOWING THE PROCEDURE U/S. 1 44C OF THE ACT. IN THE PRECEDING PARAGRAPH, WE FIND THAT FOR NOT FOLLOWING THE PROCEDURE U/S. 144C OF THE ACT, ASSESSMENT CANNOT BE SUSTAINED. AP ART FROM THAT SATISFACTION OF THE ASSESSING OFFICER IN THE CAPACI TY OF ASSESSING OFFICER OF THE SEARCHED PERSON WAS RECORDED ON 08.11.2013 WHIC H FALLS IN THE PREVIOUS YEAR 2013-14 RELEVANT TO ASSESSMENT YEAR 2 014-15. EVEN IF WE TAKE THE EARLIEST DATE IN THIS RESPECT I.E., 08.11. 2013, THE IMMEDIATELY PRECEDING SIX YEARS WILL BE ASSESSMENT YEARS 2008-0 9 TO 2013-14. ASSESSMENT YEAR 2012-13 FALLS IN THIS BLOCK ONLY AN D THEREFORE, PROVISIONS OF SECTION 153C OF THE ACT ARE ATTRACTED AND NOT SE CTION 143(3) OR SECTION 144 OF THE ACT. ASSESSMENT ORDER WAS, HOWEVER, PASS ED U/S. 144 READ WITH SECTION 142(1) OF THE ACT. 23. IN THE CASE OF CIT V RRJ SECURITIES LTD. (SUPRA ), THE HONBLE HIGH COURT HELD AS UNDER: - 24. AS DISCUSSED HEREINBEFORE, IN TERMS OF PROVISO TO SECTION 153C OF THE ACT, A REFERENCE TO THE DATE OF THE SEARCH UNDER TH E SECOND PROVISO TO SECTION 153A OF THE ACT HAS TO BE CONSTRUED AS THE DATE OF HANDING OVER OF ASSETS/DOCUMENTS BELONGING TO THE ASSESSEE (BEIN G THE PERSON OTHER THAN THE ONE SEARCHED) TO THE AO HAVING JURISDICTIO N TO ASSESS THE SAID ASSESSEE. FURTHER PROCEEDINGS, BY VIRTUE OF SECTION 153C(1) OF THE ACT, WOULD HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO THE DATE OF SEARCH WOULD HAVE TO BE CO NSTRUED AS THE REFERENCE TO THE DATE OF RECORDING OF SATISFACTION. IT WOULD FOLLOW THAT THE SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS/REAS SESSMENTS COULD BE MADE UNDER SECTION 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DATE OF HANDING OVER OF ASSET S/DOCUMENTS TO THE AO OF THE ASSESSEE. IN THIS CASE, IT WOULD BE THE D ATE OF THE RECORDING OF SATISFACTION UNDER SECTION 153C OF THE ACT, I.E., 8 TH SEPTEMBER, 2010. IN THIS VIEW, THE ASSESSMENTS MADE IN RESPECT OF ASSES SMENT YEARS 2003-04 16 AND 2004-05 WOULD BE BEYOND THE PERIOD OF SIX ASSES SMENT YEARS AS RECKONED WITH REFERENCE TO THE DATE OF RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON. 24. IN THE CASE OF ARN INFRASTRUCTURE INDIA LTD V A CIT [20171 81 TAXMANN.COM260 (DELHI) THE HONBLE HIGH COURT VIDE ITS DECISION DATED 25 TH APRIL 2017 HELD AS UNDER :- 12. THE DECISION IN RRJ SECURITIES LTD. (SUPRA) IS CATEGORICAL THAT UNDER SECTION 153C OF THE ACT, THE PERIOD OF SIX YE ARS AS REGARDS THE PERSON OTHER THAN THE SEARCHED PERSON WOULD COMMENC E ONLY FROM THE YEAR IN WHICH THE SATISFACTION NOT IS PREPARED BY T HE AO OF THE SEARCHED PERSON AND A NOTICE IS ISSUED PURSUANT THERETO. THE DATE OF THE SATISFACTION NOTE IS 21ST JULY, 2014 AND THE NOTICE UNDER SECTION 153C OF THE ACT WAS ISSUED ON 23RD JULY2014. THE PREVIOUS S IX AYS WOULD THEREFORE BE FROM AY 2009-10 TO AY2014-15. THIS WOU LD THEREFORE NOT INCLUDE AYS 2007-08 AND 2008-09. THE DECISION IN RR J SECURITIES LTD. (SUPRA) IS ALSO AN AUTHORITY FOR THE PROPOSITION TH AT FOR THE PROCEEDINGS UNDER SECTION 153C TO BE VALID, THERE HAD TO BE A S ATISFACTION NOTE RECORDED BY THE AO OF THE SEARCHED PERSON. 25. FURTHER, IN PCIT VS. SARWAR AGENCY P. LTD., 397 ITR 400 (DEL), HONBLE DELHI HIGH COURT CLEARLY OBSERVED THAT AMEN DMENT IN SECTION 153C(1) WHICH WAS BROUGHT BY FINANCE ACT, 2017 W.E. F. 1 ST APRIL, 2017 IS ONLY PROSPECTIVE IN NATURE. THEREFORE, SUCH AN AMEN DMENT CANNOT BE APPLIED RETROSPECTIVELY TO THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2012- 13. IN THESE CIRCUMSTANCES, ON THIS COUNT ALSO, WE FIND THAT THE ASSESSMENT CANNOT BE SUSTAINED AND THE LD. CIT(A) W AS PERFECTLY RIGHT IN ALLOWING THE APPEAL. WE, THEREFORE, FIND THAT THE A SSESSMENTS FOR THE ASSESSMENT YEARS 2011-12 AND 2012-13 ARE BAD IN LAW AND CANNOT BE SUSTAINED AND THE LD. CIT(A) RIGHTLY HELD SO WHILE ALLOWING THE APPEALS OF THE ASSESSEE. WE, ACCORDINGLY DISMISS THE APPEALS O F THE REVENUE. 17 26. LEARNED AR SUBMITTED THAT THE CROSS-OBJECTIONS ARE ONLY SUPPORTING THE ORDERS OF LD. CIT(A). SINCE THE APPE ALS OF THE REVENUE ARE DISMISSED, THE CROSS-OBJECTIONS FILED BY ASSESSEE B ECOME INFRUCTUOUS AND ARE DISMISSED. 27. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND CROSS- OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF JULY, 2021. SD/- SD/- (N.K. BILLAIYA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/07/2021