M/s Bucyrus India Pvt. Ltd., Kolkata V. DCIT, CIR-2(1), KOLKATA, Kolkata

ITA 616/KOL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99900 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 18-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Court: TRIBUNAL
• Department Lawyers: R R DAS CIT LD
• Assessee Lawyers: MANONEET DALAL; GUNJAN KHANNA FCA LD ARS
• Keywords: Transfer pricing; International transaction; Bonafide belief; Revised return; Reassessment proceedings
• Section: 147; 148; 263; 144; 92C; 143(3); 139(5)

Judgement Text

ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 1 IN THE INCME TAX APPELLATE TRIBUNAL, A BENCH, KO LKATA BEFORE : SHRI MAHAVIR SINGH,JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NO. 616/KOL/2015 A.Y : 2010-11 M/S. BUCYRUS INDIA PVT. LTD VS. D.C.I.T, CIR-291) , KOLKATA (MERGED WITH M/S. CATERPILLAR (I) P.LTD PAN: AABCB8823A (APPELLANT) (RESPO NDENT) FOR THE APPELLANT/ASSESSEE: SHRI MANONEET D ALAL, FCA & MS.GUNJAN KHANNA, FCA, LD.ARS FOR THE RESPONDENT/ DEPARTMENT: SHRI R.R. DAS, CIT, LD.DR DATE OF HEARING: 18-09-2015 DATE OF PRONOUNCEMENT: 15-10-20 15 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDE R OF THE DISPUTE RESOLUTION PANEL (DRP) DATED 25.3.2015 AND FINAL ORDER PASSED BY THE LEARNED AO U/S 143(3) READ WITH SECTION 147 AND 144C OF THE ACT ON 6.4.20 15 MAKING TRANSFER PRICING ADJUSTMENT OF RS. 7,51,20,484/-. 2. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSES SEE IS A COMPANY ENGAGED IN RENDERING MAINTENANCE SERVICES ON HEAVY MINING EQUI PMENTS AND TRADING ON SPARE PARTS. THE SEQUENCE OF EVENTS WOULD EXPLAIN THE PR OCEEDINGS BETTER:- A) FOR THE ASST YEAR 2010-11, THE ASSESSEE FILED I TS ORIGINAL RETURN OF INCOME ON 25.9.2010 DECLARING A LOSS OF RS. 4,36,9 7,339/-. LATER THE SAME WAS REVISED ON 26.3.2012 DECLARING LOSS OF RS. 3,78,75,426/-. THIS REVISED RETURN WAS FILED WITHIN THE DUE DATE PRESCR IBED U/S 139(5) OF THE ACT. B) THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT ON 29.5.2012. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 2 C) ADMITTEDLY, NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED SELECTING THE CASE FOR SCRUTINY BY THE LEARNED AO. HENCE THE ASSESSEE WA S UNDER THE BONAFIDE BELIEF THAT THE ASSESSMENT FOR THE ASST YE AR 2010-11 WAS COMPLETED U/S 143(1) ITSELF ON 29.5.2012. D) WHEN NO PROCEEDINGS WERE PENDING FOR THE ASST Y EAR 2010-11 BEFORE THE LEARNED AO, THE CASE WAS REFERRED TO THE TRANSFER PRICING OFFICER (TPO) FOR DETERMINATION OF ARMS LENGTH PRI CE (ALP) IN RESPECT OF THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY TH E ASSESSEE. E) THE ASSESSEE CO-OPERATED WITH THE PROCEEDINGS O F THE TPO AND ORDER U/S 92CA(3) OF THE ACT WAS PASSED ON 28.1.201 4 MAKING AN ADJUSTMENT OF RS. 7,51,20,484/- TO THE ALP. F) THE LEARNED AO REALIZING THAT HE COULD NOT FRA ME ANY ASSESSMENT AS NO PROCEEDINGS WERE PENDING FOR WANT OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT, TREATED THE ORDER OF TPO SUGGESTING AN ADDITION OF RS.7,51,20,484/- AS INFORMATION AND SOUGHT TO REOPE N THE ASSESSMENT BY ISSUANCE OF NOTICE U/S 148 OF THE ACT ON 26.3.2014. G) THE ASSESSEE FILED THE RETURN IN RESPONSE TO NO TICE ISSUED U/S 148 OF THE ACT BY DECLARING LOSS OF RS. 3,78,75,426/- ON 8 .4.2014. H) NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON THE ASSESSEE ON 5.5.2014. I) A DRAFT REASSESSMENT ORDER WAS PASSED U/S 144 C(1) OF THE ACT ON 16.6.2014 BASED ON THE EARLIER REFERENCE MADE TO LE ARNED TPO AND EARLIER ORDER PASSED BY TPO ON 28.1.2014 AND MADE AN ADDITI ON OF RS. 7,51,20,484/- TOWARDS ADJUSTMENT TO ALP. ADMITTE DLY, NO FRESH REFERENCE WAS MADE BY THE LEARNED AO TO LEARNED TPO FOR DETERMINATION OF ALP IN THE REASSESSMENT PROCEEDINGS THAT GOT COM MENCED ON 26.3.2014. THE LEARNED AO ADOPTED THE OLD TPOS ORDER U/S 92CA(3) OF THE ACT PASSED ON 28.1.2014 SUGGESTING AN ADJUSTMEN T OF RS. 7,51,20,484/- TO ALP. J) AGAINST THIS DRAFT ASSESSMENT ORDER, THE ASSE SSEE FILED OBJECTIONS BEFORE THE DRP AND THE SAME WERE DISPOSED OFF BY TH E DRP VIDE PROCEEDINGS DATED 25.3.2015. K) PURSUANT TO THE DIRECTIONS OF THE DRP, FINAL ORDER WAS PASSED BY THE LEARNED AO U/S 147 / 143(3) / 144C OF THE ACT ON 6.4.2015 ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 3 DETERMINING THE TOTAL INCOME AT RS. 3,72,45,060/- A FTER MAKING AN ADDITION OF RS. 7,51,20,484/- BEING THE ADJUSTMENT TO ALP SU GGESTED IN THE ORIGINAL TPO ORDER DATED 28.1.2014. L) NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEF ORE US ON VARIOUS GROUNDS QUESTIONING THE VALIDITY OF REASSESSMENT BA SED ON ILLEGAL REFERENCE TO LEARNED TPO AND QUESTIONING THE VALIDITY OF ADDI TION MADE BY THE LEARNED TPO ON MERITS OF THE CASE. 3. SHRI.MANONEET DALAL, FCA, THE LEARNED AR ARGUE D ON BEHALF OF THE ASSESSEE AND SHRI.R.R.DAS, THE LEARNED CIT DR ARGUED ON BEHA LF OF THE REVENUE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE WHOLE SCHEME OF ASSESSMEN T PROCEEDINGS HAVE TO BE LOOKED INTO FOR DECIDING THE CASE BEFORE US. NORMALLY WHE N A RETURN IS FILED BY THE ASSESSEE, IT WOULD EITHER GET COMPLETED U/S 143(1) OF THE ACT BY RECEIVING INTIMATION FROM THE ASSESSING OFFICER. IF THE CASE IS SELECTED FOR SCR UTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT WITHIN THE PRESCRIBED TIME, THEN THE ASS ESSMENT WOULD GET COMPLETED U/S 143(3) OR 144 OF THE ACT. HENCE IT IS WELL SETTLED THAT WHEN NO SCRUTINY NOTICE U/S 143(2) IS SERVED ON THE ASSESSEE, THE ASSESSMENT WO ULD DEEMED TO BE COMPLETED BASED ON INTIMATION U/S 143(1) OF THE ACT, IF SERVED ON T HE ASSESSEE, OR THE ACKNOWLEDGEMENT OF RETURN ITSELF WOULD BE DEEMED TO BE THE ASSESSME NT ORDER. HENCE PRACTICALLY THE ASSESSMENT GETS COMPLETED AT THIS STAGE ITSELF IN T HE BELIEF OF THE ASSESSEE UNLESS OTHERWISE REOPENED BY ISSUING SEPARATE NOTICE U/S 1 48 OF THE ACT. THE REFERENCE TO LEARNED TPO FOR DETERMINATION OF ALP OF INTERNATION AL TRANSACTIONS HAVE BEEN SPELT OUT IN THE STATUTE U/S 92CA OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PROVISIONS OF SECTION 92CA(1) IS REPRODUCED HEREUND ER:- 92CA REFERENCE TO TRANSFER PRICING OFFICER (1) WHERE ANY PERSON, BEING THE ASSESSEE, HAS ENTE RED INTO AN INTERNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION IN AN Y PREVIOUS YEAR, AND THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIE NT SO TO DO, HE MAY, WITH THE PREVIOUS APPROVAL OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, REFER THE COMPUTATION OF THE ARMS LENGTH PRICE IN RELATION TO THE SAID ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 4 INTERNATIONAL TRANSACTION OF SPECIFIED DOMESTIC TRA NSACTION UNDER SECTION 92C TO THE TRANSFER PRICING OFFICER. 4.1. IN THIS REGARD, THE RELEVANT INSTRUCTION NO. 3 OF 2003 DATED 20.5.2003 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES REQUIRES CONSIDER ATION. FOR THE SAKE OF CONVENIENCE, THE SAID INSTRUCTION NO. 3 OF 2003 DAT ED 20.5.2003 PARA 2 IS REPRODUCED HEREUNDER;- IN ORDER TO MAKE A REFERENCE TO THE TPO, THE ASSE SSING OFFICER HAS TO SATISFY HIMSELF THAT THE TAXPAYER HAS ENTERED INTO AN INTERNATIONAL TRANSACTION WITH AN ASSOCIATED ENTERPRISE. ONE OF THE SOURCES FROM WHICH THE FACTUAL INFORMATION REGARDING INTERNATIONAL TRA NSACTION CAN BE GATHERED IN FORM NO. 3CEB FILED WITH THE RETURN WHICH IS THE NATURE OF AN ACCOUNTANTS REPORT CONTAINING BASIC DETAILS OF AN INTERNATIONAL TRANSACTION ENTERED INTO BY THE TAXPAYER DURING THE YEAR AND TH E ASSOCIATED ENTERPRISE WITH WHICH SUCH TRANSACTION IS ENTERED INTO, THE NA TURE OF DOCUMENTS MAINTAINED AND THE METHOD FOLLOWED. THUS, THE PRIMA RY DETAILS REGARDING SUCH INTERNATIONAL TRANSACTIONS WOULD NORMALLY BE A VAILABLE IN THE ACCOUNTANTS REPORT. THE ASSESSING OFFICER CAN ARR IVE AT PRIMA FACIE BELIEF ON THE BASIS OF THESE DETAILS WHETHER A REFERENCE I S CONSIDERED NECESSARY. NO DETAILED ENQUIRIES ARE NEEDED AT THIS STAGE AND THE ASSESSING OFFICER SHOULD NOT EMBARK UPON SCRUTINIZING THE CORRECTNESS OR OTHERWISE OF THE PRICE OF THE INTERNATIONAL TRANSACTION AT THIS STAG E. IN THE INITIAL YEARS OF IMPLEMENTATION OF THESE PROVISIONS AND PENDING DEVE LOPMENT OF ADEQUATE DATA BASE, IT WOULD BE APPROPRIATE IF A SMALL NUMBE R OF CASES ARE SELECTED FOR SCRUTINY OF TRANSFER PRICE AND THESE ARE DEALT WITH EFFECTIVELY . THE CENTRAL BOARD OF DIRECT TAXES, THEREFORE, HAVE DECI DED THAT WHEREVER THE AGGREGATE VALUE OF INTERNATIONAL TRANSACTIONS EXCEE DS RS 5 CRORES, THE CASE SHOULD BE PICKED UP FOR SCRUTINY AND REFERENCE UNDE R SECTION 92CA BE MADE TO THE TPO. IF THERE ARE MORE THAN ONE INTERNATIONAL TRANSACTI ON WITH AN ASSOCIATED ENTERPRISE OR THERE ARE TRANSACTIONS WIT H MORE THAN ONE ASSOCIATED ENTERPRISES THE AGGREGATE VALUE OF WHICH EXCEEDS RS 5 CRORES, THE TRANSACTIONS SHOULD BE REFERRED TO THE TPO. B EFORE MAKING REFERENCE TO THE TPO, THE ASSESSING OFFICER HAS TO SEEK APPRO VAL OF THE COMMISSIONER / DIRECTOR AS CONTEMPLATED UNDER THE ACT. UNDER TH E PROVISIONS OF SECTION 92CA REFERENCE IS IN RELATION TO THE INTERNATIONAL TRANSACTION. HENCE ALL TRANSACTIONS HAVE TO BE EXPLICITLY MENTIONED IN THE LETTER OF REFERENCE. SINCE THE CASE WILL BE SELECTED FOR SCRUTINY BEFORE MAKIN G REFERENCE TO THE TPO, THE ASSESSING OFFICER MAY PROCEED TO EXAMINE OTHER ASPECTS OF THE CASE DURING PENDENCY OF ASSESSMENT PROCEEDINGS BUT AWAIT THE REPORT OF THE TPO ON THE VALUE OF INTERNATIONAL TRANSACTION BEFORE MA KING FINAL ASSESSMENT. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 5 THE THRESHOLD LIMIT OF RS 5 CRORES WILL BE REVIEWED DEPENDING UPON THE WORKLOAD OF THE TPOS. THE WORK RELATING TO SELECTION OF CASES FOR SCRUTIN Y AND REFERENCE TO TPO ON THE ABOVE BASIS IN RESPECT OF PENDING RETURNS FILED FOR THE ASSESS MENT YEAR 2002-03 SHOULD BE COMPLETED BY JUNE 30, 2003. FROM THE AFORESAID INSTRUCTION NO. 3 OF 2003 ISSUED BY CBDT WHICH IS BINDING ON THE OFFICERS OF THE INCOME TAX DEPARTMENT, MAKES IT CRY STAL CLEAR THAT A REFERENCE U/S 92CA OF THE ACT COULD BE MADE TO THE TPO ONLY WHEN THE C ASE IS SELECTED FOR SCRUTINY. IN THE INSTANT CASE, THE CASE IS NOT SELECTED FOR SCRU TINY WHICH FACT IS ALSO CONCEDED BY THE LEARNED DR, AND HENCE THE SCRUTINY ASSESSMENT PROCE EDINGS PER SE HAD NOT COMMENCED. HENCE WE HOLD THAT NO CASE WAS PENDING BEFORE THE LEARNED AO WHILE MAKING REFERENCE TO LEARNED TPO AND ACCORDINGLY, TH E ORDER PASSED BY THE LEARNED TPO ON 28.1.2014 MAKING AN ADJUSTMENT OF RS. 7,51,2 0,484/- TO ALP IS DECLARED VOID AB INITIO AND ILLEGAL AND HENCE CANNOT BE RELIED UP ON BY THE LOWER AUTHORITIES. 4.2. WE PLACE RELIANCE ON THE CBDT CIRCULAR NO. 5 49 DATED 31.10.1989 WHICH STATES THAT IF AN ASSESSEE, AFTER FURNISHING THE RE TURN OF INCOME DOES NOT RECEIVE A NOTICE U/S 143(2) FROM THE DEPARTMENT WITHIN THE PRESCRIBE D TIME, HE CAN TAKE IT THAT THE RETURN FILED BY HIM HAS BECOME FINAL AND NO SCRUTINY PROCE EDINGS ARE TO BE STARTED IN RESPECT OF THAT RETURN. IN THE INSTANT CASE, AT THE TIME OF ISSUE OF NOTICE U/S 92CA OF THE ACT (I.E REFERENCE TO TPO), NO RETURN WAS PENDING ON TH E BASIS OF WHICH NOTICE U/S 92CA COULD HAVE BEEN ISSUED. WE PLACE RELIANCE ON THE DECISION OF THE COORDINATE BENCH DECISION OF PUNE TRIBUNAL IN THE CASE OF MAXIMIZE LEARNING PRIVATE LIMITED VS ACIT IN ITA NO. 2234/PN/2012 DATED 2.2.2015 FOR ASST YEAR 2007-08, WHEREIN IT WAS HELD AN ASSESSING OFFICER COULD MAKE REFERENCE TO THE TP O U/S 92CA OF THE ACT ONLY AFTER SELECTING THE CASE FOR SCRUTINY ASSESSMENT. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 6 4.3. WE ALSO PLACE RELIANCE ON THE DECISION OF TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS M/S SAP LABS PVT LTD IN ITA NO. 842 OF 2008 AND ITA NO. 339 OF 2010 VIDE ORDER DATED 25.8.2014. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF IN COME FOR ASST YEAR 2002-03 ON 31.10.2002. THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THE ASSESSEE RECEIVED NOTICES DAED 1.4.2004 U/S 148 OF THE ACT AND 12.4.2004 U/S 92CA OF THE ACT FROM THE TPO SEEKING DETAILS AB OUT THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH THE GROUP COMPANIES ON A REFERENCE MADE BY THE ASSESSING AUTHORITY. AT THE TIME OF ISSUE OF NOTICE U/S 92CA OF THE ACT, NO VALID RETURN WAS PENDING ON THE BASIS OF WHICH NOTICE U/S 92CA OF THE ACT COULD HAVE BEEN ISSUED. SINCE NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED PURSUANT TO FILING OF THE ORIGINAL RETURN, THE ASSESSMENT IS DEEMED TO HAVE BECOME FINAL. IN REPL Y TO THE NOTICE ISSUED U/S 148 OF THE ACT, THE ASSESSEE FILED A LETTER DATED 2 1.4.2004 REQUESTING THE ASSESSING AUTHORITY TO TREAT THE RETURN FILED ON 31 .10.2002 AS RETURN IN COMPLIANCE WITH THE NOTICE U/S 148 OF THE ACT. INF ACT THE TPO ON 20.1.2005 PASSED AN ORDER U/S 92CA OF THE ACT ACCEPTING THE P RICING OF THE ASSESSING AUTHORITY. HOWEVER, THE CIT INVOKING HIS POWER U/ S 263 OF THE ACT INITIATED PROCEEDINGS AND SET ASIDE THE ORDER OF TH E ASSESSING AUTHORITY ON THE GROUND THAT IT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS AGAINST THAT ORDER, THE ASSESSEE PREFERRED AN APPEAL TO THE TRIBUNAL. THE TRIBUNAL HAS HELD THAT WHEN TWO VIEWS ARE POSSI BLE AND WHEN THE TRP HAS ACCEPTED VALUATION BY THE ASSESSING AUTHORITY D ETERMINING THE ARMS LENGTH PRICE, THE COMMISSIONER HAD NO JURISDICTION TO INTERFERE WITH THE SAID ORDER U/S 263 OF THE ACT AND MOREOVER ON THE DAY TH E REFERENCE WAS MADE BY THE ASSESSING AUTHORITY, THERE WAS NO RETURN PEN DING FOR CONSIDERATION AND THEREFORE, THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE COMMISSIONER. IT IS AGAINST THE SAID ORDER, THE REVENUE IS BEFORE TH IS COURT. FROM THE AFORESAID FACTS, IT IS CLEAR THAT ON THE D AY THE REFERENCE WAS MADE BY THE ASSESSING AUTHORITY TO THE TRANSFER PRICING AUTHORITY, THERE WAS NO RETURN PENDING FOR CONSIDERATION BY HIM AND THEREFO RE, THE VERY REFERENCE WAS BAD . EVEN OTHERWISE, THE SAID TPO DID NOT FIND FAULT W ITH THE ADJUDICATION OF DETERMINING ARMS LENGTH PRICE BY T HE ASSESSING AUTHORITY. IN THOSE CIRCUMSTANCES, THE COMMISSIONER COMMITTED AN ERROR IN EXERCISING HIS POWER U/S 263 OF THE ACT AND THE TRIBUNAL WAS J USTIFIED IN INTERFERING WITH THE SAID ORDER. THEREFORE, WE DO NOT SEE ANY MERIT IN APPEAL NO. 842 /2008. ACCORDINGLY, IT IS DISMISSED. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 7 CONSEQUENTLY, THE IMPUGNED ORDER WHICH IS THE SUBJE CT MATTER OF ITA 339/2010 WHICH IS A CONSEQUENTIAL ORDER IS ALSO DIS MISSED. 5. WE FIND THAT THE LEARNED AO HAVING REALIZED HI S MISTAKE OF NOT SELECTING THE CASE FOR SCRUTINY SOUGHT TO REMAIN SILENT AFTER REC EIVING THE LEARNED TPOS ORDER DATED 28.1.2014. WE FIND THAT NOTICE U/S 143(2) WAS ALSO ISSUED AND SERVED ON THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS. WE FIND THAT IN THE REASSESSMENT PROCEEDINGS, NO FRESH REFERENCE WAS MADE TO THE LEARNED TPO U/S 92CA(1) O F THE ACT BY THE LEARNED AO. WE HOLD THAT THE ACTION OF USING THE OLD TPO ORDER PASSED U/S 92CA(3) AS AN INFORMATION FOR FORMING HIS OPINION OF REASON TO BE LIEVE THAT INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT ALSO CANNOT BE APPRECIATED FOR REOPENING THE ASSESSMENT. IN THIS REGARD, WE FIND THAT THE CASE LAW RELIED ON BY THE LEARNED AR IN THE CASE OF CWT VS SONA PROPERTIES REPORTED IN 327 ITR 592 (BOM ) RENDERED BY BOMBAY HIGH COURT IS WELL PLACED. IN T HE SAID CASE, THE ASSESSING OFFICER HAD MADE A REFERENCE TO THE DEPARTMENTAL VA LUATION OFFICER AFTER THE END OF THE ASSESSMENT PROCEEDINGS. THEIR LORDSHIPS HELD THAT SUCH A REFERENCE COULD NOT HAVE BEEN MADE UNDER THE SCHEME OF THE ACT BECAUSE THE A SSESSMENT PROCEEDINGS HAD COME TO AN END BEFORE THE POINT OF TIME WHEN SUCH A REFE RENCE WAS MADE, AND AS SUCH THE REFERENCE ITSELF WAS LEGALLY INVALID. THE STAND O F THE REVENUE WAS THAT EVEN IF REFERENCE TO THE DVO IS TO BE HELD TO BE INVALID, T HE DVOS REPORT CONSTITUTED INFORMATION AND AS SUCH IT COULD BE A GOOD BASIS FO R COMING TO THE CONCLUSION THAT WEALTH HAS ESCAPED ASSESSMENT. REJECTING THIS PL EA, THEIR LORDSHIPS OBSERVED THAT . A REPORT CALLED BY AN AUTHORITY HAVING NO JURISDICT ION WOULD BE A NULLITY AT LAW AND CONSEQUENTLY PROCEEDINGS BASED SOLELY ON SUCH R EPORT CONSIDERING THE REQUIREMENT OF SECTION 17 WOULD BE ILLEGAL AND WILL HAVE TO BE QUASHED. IN EFFECT THUS, IT IS HELD THAT WHEN REFERENCE ITSELF IS INVA LID, THE REPORT RECEIVED AS A RESULT OF THE SAID REFERENCE CANNOT CONSTITUTE MATERIAL FOR FORMI NG THE BELIEF THAT AN INCOME OR WEALTH TAX HAS ESCAPED ASSESSMENT. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 8 THE ORDER PASSED BY THE LEARNED TPO PASSED PURSUANT TO AN ILLEGAL REFERENCE CANNOT BE USED IN THE REASSESSMENT PROCEEDINGS BY T HE LEARNED AO AS BOTH THE PROCEEDINGS ARE SEPARATE AND INDEPENDENT OF ONE ANO THER. IN VIEW OF THE ABOVE, WE HOLD THAT THE REASSESSMENT PROCEEDINGS INITIATED BASED ON THE TPOS ORDER DATED 28.1.2014 SUGGESTING AN AD JUSTMENT OF RS. 7,51,20,484/- TO ALP (WHICH WAS BASED ON AN ILLEGAL REFERENCE ) BY T HE LEARNED AO IS VOID AB INITIO AND BAD IN LAW. 6. MAINTAINABILITY OF APPEAL U/S 253(1)(D) OF TH E ACT BEFORE TRIBUNAL IT IS OBSERVED THAT THE ASSESSEE HAD ADMITTED BEFOR E THE DRP THAT IT IS NOT AN ELIGIBLE ASSESSEE. ACCORDINGLY DRP DISMISSED THE OBJECTIONS OF THE ASSESSEE AS NOT MAINTAINABLE FOR WANT OF JURISDICTION. THE FINDIN GS OF THE DRP IN THIS REGARD ARE REPRODUCED HEREIN BELOW:- DRP HAS DULY CONSIDERED SUBMISSIONS OF THE ASSESSEE AND RELEVANT LEGAL PROVISIONS. SECTION 144C(2) OF THE ACT IS REPRODUC ED AS UNDER: (2) ON RECEIPT OF DRAFT ORDER, THE ELIGIBLE ASSESSE E SHALL WITHIN THIRTY DAYS OF THE RECEIPT BY HIM OF THE DRAFT ORDER- (A) FILE HIS ACCEPTANCE OF THE VARIATIONS TO THE ASSESS ING OFFICER ; OR (B) FILE HIS OBJECTIONS, IF ANY, TO SUCH VARIATION WITH (I) THE DISPUTE RESOLUTION PANEL (II) THE ASSESSING OFFICER IT IS CLEAR FROM SUB SECTION 2 OF SECTION 144C THAT IT IS THE ELIGIBLE ASSESSEE ONLY WHO CAN FILE OBJECTIONS TO DRAFT ASSESSMENT OR DER BEFORE DRP. THE JURISDICTION OF DRP IS TRIGGERED ONLY WHEN AN ELIGI BLE ASSESSEE FILES OBJECTIONS BEFORE IT. IN PRESENT CASE, THE ASSESSE E HAS LANDED ITSELF IN A PIQUANT SITUATION BY APPROACHING THE DRP TO CONTEST THE DRAFT ASSESSMENT ORDER BUT, AT THE SAME TIME, CLAIMING THAT IT IS NO T AN ELIGIBLE ASSESSEE. AS PER THE WRITTEN AND ORAL SUBMISSIONS MADE BEFORE TH IS DRP, THE ASSESSEE DOES NOT CATEGORISE ITSELF AS THE ELIGIBLE ASSESSE E. IN VIEW OF THE SAME, THE JURISDICTION OF THIS DRP CANNOT BE INVOKED AND THE MERITS OF VARIATIONS ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 9 PROPOSED IN THE DRAFT ASSESSMENT ORDER SERVED ON TH E ASSESSEE CANNOT BE DECIDED BY THE PANEL. HENCE, OTHER OBJECTIONS TAKE N BY THE ASSESSEE ARE NOT BEING TAKEN UP FOR ADJUDICATION BY THIS PANEL. IN VIEW OF ABOVE DISCUSSION, THE APPLICATION OF THE ASSESSEE IN RESPECT OF THE ASSESSMENT FOR AY 2010-11 IS REJECTED AB INITIO AS VOID AND SANS JURISDICTION. THE AO IS DIRECTED TO PROCEED ACCORD INGLY AS PER LAW. WE FIND THAT IN THE INSTANT CASE, THE ASSESSEE DID NOT ACCEPT THE VARIATIONS PROPOSED BY THE LEARNED AO TO THE ALP IN THE SUM OF RS. 7,51,20 ,484/- AND THEREFORE IT FILED ITS OBJECTIONS BEFORE THE DRP AND LEARNED AO. WE FIND T HAT THE DRAFT ORDER PASSED BY THE LEARNED AO CAN BE CHALLENGED ONLY BEFORE DRP BY THE ASSESSEE. EVEN THOUGH THE ASSESSEE HAS INTIMATED THE DRP THAT IT IS NOT AN EL IGIBLE ASSESSEE, WE HOLD THAT THE DRP SHOULD NOT HAVE SIMPLY BRUSHED ASIDE THE ENTIRE GAM UT OF FACTS THAT HAD HAPPENED IN THIS CASE. WE FIND THAT ABSOLUTELY NO FINDING IS GIVEN BY DRP WITH REGARD TO THE FACTS AND SEQUENCE OF EVENTS IN THIS CASE, MORE PARTICULA RLY , ON THE VALIDITY OF THE LEARNED AO TO ADOPT THE ORDER PASSED BY THE LEARNED TPO ON 28.1.2014 BASED ON AN ILLEGAL REFERENCE. WE FIND THAT THE CBDT INSTRUCTION NO. 3 OF 2003 IS VERY CLEAR ON THIS SUBJECT. IT WILL BE RELEVANT TO LOOK INTO SECTIO N 144C(15) OF THE ACT:- (15) FOR THE PURPOSES OF THIS SECTION ,- (A) DISPUTE RESOLUTION PANEL MEANS A COLLEGIUMS COMPR ISING OF THREE PRINCIPAL COMMISSIONERS OR COMMISSIONERS OF INCOME TAX CONSTITUTED BY THE BOARD FOR THIS PURPOSE ; (B) ELIGIBLE ASSESSEE MEANS , - (I) ANY PERSON IN WHOSE CSAE THE VARIATION REFERRED TO IN SUB-SECTION(1) ARISES AS A CONSEQUENCE OF THE ORDER OF THE TRANSFE R PRICING OFFICER PASSED UNDER SUB-SECTION (3) OF SECTION 92CA; AND (II) ANY FOREIGN COMPANY. ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 10 ADMITTEDLY, THE ASSESSEE COMPANY IS NOT A FOREIGN C OMPANY. HENCE THE ONLY POINT TO BE SEEN IS WHETHER AT ALL ANY ORDER HAS BEEN PASSE D U/S 92CA(3) OF THE ACT BY THE TPO IN THE HANDS OF THE ASSESSEE WHICH HAS BEEN COMPLIE D WITH IN THE INSTANT CASE. HENCE THE ASSESSEE BEING AN ELIGIBLE ASSESSEE IS ACCEPTED BY THE LEARNED AO ITSELF BY REFERRING THE CASE TO TPO (THOUGH ILLEGAL) AND ACCE PTED THE ORDER PASSED U/S 92CA(3) OF THE ACT AND MADE AN ADJUSTMENT OF RS. 7,51,20,48 4/- AS PER THE SAID ORDER. JUST BECAUSE THE ASSESSEE HAD STATED BEFORE THE DRP THAT IT IS NOT AN ELIGIBLE ASSESSEE FOR WHATEVER REASONS BEST KNOWN TO IT, THE DRP CANNOT B RUSH ASIDE THESE FACTS AND SWEEP IT UNDER THE CARPET ON THE ROOTS ADDRESSED BY THE REVE NUE ITSELF. WE ALSO FIND THAT THE CASE LAW RELIED UPON BY THE L EARNED DR ON THE COORDINATE BENCH DECISION OF CHENNAI TRIBUNAL IN THE CASE OF INTIMATE FASHIONS ( INDIA) P LTD VS ACIT REPORTED IN (2013) 31 TAXMANN.COM 306 (CHENNAI TR IB.) IS DISTINGUISHABLE. IN THE FACTS BEFORE THE CHENNAI TRIBUNAL, THE ASSESSEE PRE FERRED OBJECTIONS BEFORE DRP BEYOND THE STATUTORY TIME LIMIT PRESCRIBED UNDER TH E ACT. HENCE THE DRP DISMISSED THE OBJECTIONS OF THE ASSESSEE ON THE GROUND OF LIM ITATION AS CONDONATION POWER IS NOT AVAILABLE TO THEM IN THE STATUTE. THE FACT OF NO N-AVAILABILITY OF CONDONATION POWERS WITH THE DRP WAS UPHELD BY THE CHENNAI TRIBUNAL. H ENCE THE CASE LAW RELIED WOULD NOT ADVANCE THE CASE OF THE REVENUE. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES, W E HOLD THAT THE APPEAL IS MAINTAINABLE BEFORE THIS TRIBUNAL AGAINST THE ORDER PASSED BY THE LEARNED AO U/S 143(3) READ WITH SECTION 147 READ WITH SECTION 144C PURSUANT TO THE DIRECTIONS OF THE DRP. 7. REASSESSMENT BARRED BY LIMITATION THE LEARNED AO ARGUED THAT THE REASSESSMENT IS BARR ED BY LIMITATION. HE ARGUED THAT THE NOTICE U/S 148 WAS ISSUED ON THE ASSESSEE ON 26 .3.2014. THE TIME LIMIT FOR ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 11 COMPLETION OF THIS REASSESSMENT IS WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE NOTICE U/S 148 WAS ISSUED. THE LEARNED AO DID NOT SEEK TO REFER THE CASE TO LEARNED TPO U/S 92CA(1) OF THE ACT IN THE REASSE SSMENT PROCEEDINGS. HENCE HE IS NOT ENTITLED FOR EXTENDED ONE YEAR TIME LIMIT FOR C OMPLETION OF REASSESSMENT. HENCE THE REASSESSMENT OUGHT TO HAVE BEEN COMPLETED BY 31 .3.2015. IN THE INSTANT CASE, THE LEARNED AO HAD COMPLETED THE REASSESSMENT PROCEEDIN GS ON 6.4.2015 WHICH IS BEYOND THE TIME LIMIT FOR COMPLETION OF ASSESSMENT PRESCRIBED IN SECTION 153 OF THE ACT AND ACCORDINGLY THE SAME IS BARRED BY LIMITATIO N BY 6 DAYS. WE FIND THAT THE ASSESSEE HAD NOT RAISED ANY SPECIF IC GROUND ON THE LIMITATION ASPECT AND ALSO DID NOT CHOSE TO FILE ANY ADDITIONAL GROUN D OF APPEAL BEFORE US AND HENCE WE ARE NOT INCLINED TO ADDRESS THIS ISSUE RAISED BY TH E ASSESSEE DURING THE COURSE OF HEARING. 8. FINAL CONCLUSION IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES AN D FINDINGS GIVEN HEREINABOVE, WE ALLOW THE GROUND NO.1 RAISED BY THE ASSESSEE IN FULL BY DECLARING THAT THE REASSESSMENT ORDER OF THE LEARNED AO IS BAD IN LAW AND VOID ABINITIO. IN VIEW OF THIS DECISION, THE ADJUDICATION OF OTHER GROUNDS BE COMES INFRUCTUOUS AND HENCE NO DECISION IS GIVEN ON THE MERITS OF THE CASE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 15 / 10 /2015 SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 15 /10/2015 ITA NO. 616/KOL/2015-A-AM M/S.BUCYRUS (I) P. LTD MERGED WITH M/S. CATERPILLAR (I) P .LTD. 12 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/ASSESSEE: M/S. BUCYRUS INDIA PVT . LTD (MERGED WITH M/S. CATERPILLAR (I) PVT. LTD MIRA TOWERS, 4 TH FL., BLOCK DN-27, SECTOR V, SALT CITY, KOL-91. 2 THE RESPONDENT-DEPUTY COMMISSIONER OF INCOME-TAX , CIR-2(1), AAYKAR BHAWAN, P-7 CHOWRINGHEE SQ, KOL-69. 3 4.. /THE CIT, / THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS