Hitachi Astemo Ltd. (erstwhile known as M/s Showa Corporation), Gurgaon V. ACIT, Int. Tax., Gurgaon

ITA 549/DEL/2022

AI Insights

The case involves Hitachi Astemo Ltd., formerly known as M/s. Showa Corporation, appealing against the final assessment order for the assessment year 2018-19. The primary issue was the rejection of the assessee's objections by the Dispute Resolution Panel (DRP) on the grounds of limitation. The assessee argued that the objections were filed within the extended deadline due to the COVID-19 pandemic, as per the Supreme Court's extension of limitation periods. The Tribunal agreed with the assessee, noting that the DRP had miscalculated the limitation period by considering the date of the draft assessment order instead of the actual receipt date of the order by the assessee.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300588 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-11-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 29-03-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Period of limitation; Procedural lapse; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘D’ NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No.549/Del/2022 Assessment Year: 2018-19 Hitachi Astemo Ltd. (erstwhile known as M/s. Showa Corporation), C/o- Yasuhiro Ashiki, B3/13, DLF Phase-1, Gurugram Vs. The Assistant Commissioner of Income Tax, International Taxation, HSIIDC Building, Udyog Vihar, Phase-V, Gurugram PAN :AAHCS8931N (Appellant) (Respondent) ORDER PER SAKTIJIT DEY, JM: This is an appeal by the assessee against the final assessment order dated 31.01.2022 passed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (in short ‘the Act’) pertaining to assessment years 2018-19 in pursuance to directions of learned Dispute Resolution Panel (DRP). 2. The basic grievance of the assessee in the present appeal is against rejection/dismissal of its objections in limine by learned DRP on the ground that objections filed are barred by limitation. Appellant by Sh. Vishal Kalra, Advocate Sh. Ankit Sahni, Advocate Respondent by Sh. Gangadhar Panda, CIT(DR) Date of hearing 28.11.2022 Date of pronouncement 28.12.2022 ITA No.549/Del/2022 AY: 2018-19 2 | P a g e 3. We have heard Sh. Vishal Kalra, learned counsel appearing for the assessee and Sh. Gangadhar Panda, learned Departmental Representative. From the chronology of dates and events filed before us, it is observed, the Assessing Officer proposed the draft assessment order on 17 th February, 2021. However, the assessee, on 05.03.2021, received a computer generated mail from the Assessing Officer attaching income computation sheet without the draft assessment order. The assessee sent a mail to the Assessing Officer intimating non-receipt of draft assessment order. The assessee again followed up the issue of non-receipt of draft assessment order with the Assessing Officer through mail sent on 31 st March, 2021. On 13 th April, 2021, the Assessing Officer mailed the draft assessment order to the assessee. Thus, on receipt of the draft assessment order on 13 th April, 2021, as per section 144C(2) of the Act, the assessee was required to file his objections before learned DRP on or before 13 th May, 2021. However, due to outbreak of Covid-2019 Pandemic the assessee could not file the objections before the DRP within the period of limitation and ultimately filed the objections on 28 th May, 2021. Learned DRP dismissed the objections in limine on the ground of ITA No.549/Del/2022 AY: 2018-19 3 | P a g e delay by reckoning the period of limitation from the date of draft assessment order, i.e., 17 th February, 2021. 4. Before us, it is the specific contention of the learned counsel for the assessee that firstly, the draft assessment order was received by the assessee only on 13 th April, 2021 and not on 17 th February, 2021. Secondly, he submitted, due to outbreak of Covid -2019 Pandemic, Hon’ble Supreme Court took suo motu cognizance and directed extension of period of limitation in respect of any pending applications that would have expired between 15 th March, 2020 to 14 th March, 2021 by extending the period of limitation for a further period of 90 days from 15 th March, 2021. He submitted, the Central Board of Direct Taxes (CBDT) vide Circular No.8 of 2021 extended timeline for filing DRP objections for which the last date of filing was 1 st April, 2021 or thereafter to 31 st May, 2021. He submitted, as per CBDT Circular, the limitation for filing objections would have expired on 31 st May, 2021, whereas, the assessee has filed the objections before that date. 5. Having considered rival submissions, we are of the view that learned DRP by misconceiving the factual position has dismissed/rejected assessee’s objections in limine on the ground ITA No.549/Del/2022 AY: 2018-19 4 | P a g e of delay. Firstly, the facts on record clearly indicate that draft assessment order was served on the assessee through mail on 13 th April, 2021. Therefore, the assessee had time to file the objections before learned DRP till 13 th May, 2021. However, due to outbreak of Covid -2019 Pandemic, the assessee could not file the objections within the prescribed period of limitation. Nonetheless, the assessee had filed the objections before learned DRP within the extended period of limitation as per the extant CBDT Circular and the order of the Hon’ble Supreme Court. That being the case, dismissal of assessee’s objections by the Ld. DRP in limine on the ground of delay, suffers from serious legal and procedural irregularity, hence, for the very same reason, the final assessment order under challenge in this appeal is equally unsustainable, hence, deserves to be set aside. Accordingly, we set aside the final assessment order, which is based on a legally unsustainable direction of learned DRP. Since, the irregularity/deficiency has occurred at the stage of DRP, course correction has to be made by restoring the matter to the stage where the irregularity has occurred. For facilitating the said process, the Assessing Officer is directed to place the matter before learned DRP, who shall deal with the objections of the ITA No.549/Del/2022 AY: 2018-19 5 | P a g e assessee afresh in accordance with law and after providing an opportunity of being heard to the assessee. Thereafter, on receipt of the directions of the Ld. DRP, the Assessing Officer shall pass the final assessment order as per law. 6. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 28 th December, 2022 Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) PRESIDENT JUDICIAL MEMBER Dated: 28 th December, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi