Rapiscan Systems Inc, United States V. ADIT,(International Taxation)-2, Hyderabad

ITA 587/Hyd/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5694 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 09-07-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 26-10-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M P LOHIA VIRTUAL
• Keywords: Search and seizure; Set aside
• Section: 144; 143(3); 144C

Judgement Text

आयकर अपीलीय अिधकरण, हैदराबाद पीठ मŐ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI MANJUNATHA G., ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA Nos.587 & 588/Hyd/2022 (िनधाŊरण वषŊ / Assessment Year: 2018-19) Rapiscan Systems Inc, US C/o Ernst & Young LLP - Hyderabad [PAN : AAICR8337E] Vs. Asstt. Director of International Taxation (IT)-2 Hyderabad अपीलाथŎ / Appellant Ů̝ यथŎ / Respondent िनधाŊįरती Ȫारा/Assessee by: Shri M P Lohia (Virtual) & Shri Harman Singh Jolly, CAs राज̾ व Ȫारा/Revenue by: Shri Kumar Pranav CIT(DR) सुनवाई की तारीख/Date of hearing: 10/07/2024 घोषणा की तारीख/Pronouncement on: 23/07/2024 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 29/08/2022 passed by the learned AssƩ. Director of Income Tax (InternaƟonal TaxaƟon)-2 Hyderabad (“Ld. ADIT”), in the case of Rapiscan Systems Inc, USA (“the assessee”) for the assessment year 2018-19, the assessee preferred these appeals. Page 2 of 5 2. The common quesƟon that arises for our consideraƟon in these two appeals is whether the final assessment orders that were passed on 29/8/2022 for the assessment years 2018-19 and 2019-20 pursuant to the direcƟons that were issued and uploaded on 30/6/2022 by the Ld. Dispute ResoluƟon Panel (DRP), are barred by limitaƟon under secƟon 144C (13) of the Income Tax Act, 1961 (for short “the Act”). Relevant facts are that the learned DRP issued direcƟons in the case of the assessee for the assessment years 2018-19 and 2019-20 on 30/6/2022 and as is evidenced by the leƩer dated 30/1/2024 issued by the secretary, DRP-1, Bangalore said direcƟons were uploaded on ITBA portal on 30/6/2022 itself and a physical copy of direcƟons was also sent to the learned Assessing Officer on 30/6/2022 through speed post. Learned Assessing Officer, however, passed final assessment order under secƟon 143(3) read with secƟon 144C (13) of the Act on 29/8/2022. 3. By way of addiƟonal grounds assessee challenged the same. Learned DR placed reliance on the email dated 7/5/2022 to the effect that the direcƟons of the learned DRP under secƟon 144 C(5) of the Act were communicated in the month of May 2022, and submiƩed that from the end of the month in which the direcƟons were communicated the impugned assessment orders are within 30 days and therefore, regardless of the date of passing of the direcƟons, the impugned assessment orders are within Ɵme. 4. Ld. AR placed reliance on the decision of the Hon’ble Delhi in the case of Louis Dreyfus company India private Ltd vs. DCIT [2024] 159 taxmann.com 244 (Delhi) and submiƩed that the uploading of the learned DRP’s direcƟons on the ITBA portal would be considered as the receipt of the direcƟons by the learned Assessing Officer, and therefore, the Ɵme limit for passing the final order should be within 30 days from the end of the month in which the direcƟons were uploaded on the ITBA portal. Since the date of direcƟons in these two appeals happens to be 30/6/2022, 30 days from the end of the month in which the direcƟons for uploaded to the Page 3 of 5 ITBA portal would expire by the end of July 2022, and therefore, the assessment orders that were passed on 29/8/2022. 5. We have gone through the record in the light of the submissions made on either side. In view of the leƩer dated 30/1/2024 wriƩen by the Secretary, DRP-1, Bangalore to the assessee, it is established that the direcƟons dated 30/6/2022 issued by the learned DRP are uploaded on ITBA portal on 30/6/2022 itself, and as held by the Hon’ble Delhi the date of uploading of the direcƟons on ITBA portal should be taken as the date of receipt of such direcƟons by the learned Assessing Officer. For the sake of completeness we extract hereunder the observaƟons of the Hon’ble Delhi High Court in the case of Louis Dreyfus (supra) hereunder,- 20. Undisputedly, the direcƟve of the DRP came to be uploaded on the ITBA portal on 24 June 2022. It is addiƟonally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (AddiƟonal/Joint/Deputy/Assistant Commissioner of Income Tax, NaƟonal Faceless Assessment Centre, New Delhi) on 27 June 2022. It is thereaŌer that the TPO appears to have passed the order dated 25 July 2022. 21. We, however note that paragraph 4(2) of the E-as, 2019 makes the following salient provisions:- "4(2). All communicaƟon among the assessment unit, review unit, verificaƟon unit or technical unit or with the assesse or any other person with respect to the informaƟon or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the NaƟonal e-assessment Centre." 22. It is thus manifest that as per the provisions of E-as, 2019, all orders, noƟces and decisions have to be necessarily uploaded on the ITBA portal and as part of the larger faceless assessment regime which now holds the field. The uploading of the direcƟve of the DRP on the ITBA portal would thus consƟtute valid and sufficient service and the period of limitaƟon as prescribed in SecƟon 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid posiƟon becomes clear, it is evident that the order of assessment, if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory Ɵmelines as incorporated Page 4 of 5 in the aforenoted provisions. Accordingly, the writ peƟƟon is liable to be allowed and the impugned order of assessment and the consequenƟal penalty proceedings are thus liable to be set aside on this short score alone. 6. This decision in the case of Louis Dreyfus (supra) was followed in the case of PCIT vs. M/s FIBERHOME India Pvt. Ltd in ITA No. 91/2024 on the file of the Hon’ble Delhi High Court. These decisions are applicable to the facts of this case on all fours, and respecƞully following the same we hold that the assessment orders that were passed on 29/8/2022 are barred by limitaƟon. Since we answered the addiƟonal ground quashing the assessment for the assessment year 2018-19 and 2019-20, all other issues have become academic. Grounds are answered accordingly. 7. In the result, appeals of the assessee are allowed. Order pronounced in the open court on this the day of 23 rd July, 2024. Sd/- Sd/- (MANJUNATHA G.) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 23/07/2024 Pvv/SPS Copy forwarded: 1. RAPISCAN Systems Inc C/o ERNST & YOUNG LLP, The SKYVIEW 10, 18 th Floor, Zone Z, Survey No.83/1 Raidurgam, Hyderabad 500032 2. ADIT(InternaƟonal TaxaƟon)-2 Aayakar Bhavan, Basheerbagh, Hyderabad 3. CIT(DRP)-1 Kendriya Sadan, 4 th Floor, C Wing, Bengaluru 560034 4. Director of Income Tax (IT&TP) Hyderabad 5. DR, ITAT Benches, Hyderabad Page 5 of 5 6. GUARD FILE