TECH MAHINDRA LTD., MUMBAI V. ACIT, CIR.-2(3)(1), MUMBAI

ITA 6167/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5377 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 29-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R MANJUNATHA SWAMYLD; VINOD CHAUDHA
• Assessee Lawyers: J D MISTRI LD SR
• Keywords: Double taxation relief; Set aside
• Section: 143(3); 115JB; 153; 263; 90

Judgement Text

ITA NO.6167/MUM/2018 TECH MAHINDRA LIMITED ASSESSMENT YEAR :2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6167/MUM/2018 ( / ASSESSMENT YEAR :2013-14) TECH MAHINDRA LIMITED SHARDA CENTRE TAXATION DEPARTMENT 5 TH FLOOR, OFF. KARVE ROAD PUNE-411 004. / VS. A CIT CIRCLE - 2(3)(1) AAYKAR BHAVAN MUMBAI-400 020. ! ./ ! ./PAN/GIR NO. : AAACM-3484-F ( +, /APPELLANT ) : ( -.+, / RESPONDENT ) ASSESSEE BY : SHRI J.D. MISTRI -LD.SR. COUNSEL REVENUE BY : SHRI R. MANJUNATHA SWAMY-LD.CIT DR AND SHRI VINOD CHAUDHARY (LD. AO FOR ASSESSEE) / DATE OF HEARING : 07/10/2020 / DATE OF PRONOUNCEMENT : 07/10/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2013-14 CONTEST THE VALIDITY O F EXERCISE OF REVISIONAL JURISDICTION U/S 263 BY LEARNED PR. COMMISSIONER OF INCOME-TAX-2, MUMBAI VIDE ORDER U/S 263 DATED 29/08/2018. THE DIR ECTIONS GIVEN IN CONCLUDING PARA-10 OF THE SAID ORDER READ AS UNDER: - ITA NO.6167/MUM/2018 TECH MAHINDRA LIMITED ASSESSMENT YEAR :2013-14 2 IN VIEW OF THE AFORESAID FACTS AND THE PROVISIONS OF THE LAW MENTIONED IN THE PRECEDING PARAS, THE ASSESSMENT ORDER DT 28.02.2017 PASSED BY THE ASSESS ING OFFICER U/S. 143(3) R.W.S.144C IS TO BE HELD ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE REV ENUE. ACCORDINGLY, THE ASSESSMENT ORDER IS REVISED AND THE ASSESSING OFFICER IS DIRECTED TO DISALLOW THE CLAIM OF EXPENSES OF RS.55,51,637/- BEING PAYMENT OF PENALTIES TO FOREIGN AUTHORITIES AS DISCUSSED IN PA RA 6 AND AN AMOUNT OF RS.10 CRORES ON ACCOUNT OF THE CLASS ACTION SETTLEMENT CONSIDERATION AS DISCUSSED IN PARA-7 AND TO RE-EXAMINE THE CLAIMS OF DTAA CREDI T U/S. 90 AND VARIOUS CLAIMS ON DERIVATIVE TRANSACTIO NS AND TO DETERMINE THE TOTAL INCOME ACCORDINGLY. T HE ASSESSMENT ORDER WILL BE MODIFIED BY THE AO TO THESE EXTENTS. IT IS EVIDENT THAT LD. PR.CIT HAS, INTER-ALIA, DIRECTED LD. AO TO DISALLOW THE EXPENSES ON ACCOUNT OF PENALTIES TO FOREIGN AUTHORI TIES AS WELL CLASS ACTION SETTLEMENT CONSIDERATION PAID BY THE ASSESSE E. THE LD. AO WAS FURTHER DIRECTED TO RE-EXAMINE THE CLAIMS OF DTAA C REDIT U/S 90 AND VARIOUS CLAIMS ON DERIVATIVE TRANSACTIONS. 2. THE LD. SENIOR COUNSEL APPEARING FOR ASSESSEE (A R), SHRI J.D. MISTRI, AT THE OUTSET, SUBMITTED THAT THE APPEAL WO ULD BECOME INFRUCTUOUS SINCE NO CONSEQUENTIAL ORDER HAS BEEN PASSED BY LD. AO PURSUANT TO THE AFORESAID DIRECTIONS GIVEN U/S 263 AND THE TIME LIMIT TO DO SO AS PROVIDED IN SEC.153(3) AS WELL AS SEC. 153(5) HAS A LREADY BEEN EXPIRED. 3. KEEPING IN VIEW THE SUBMISSIONS SO MADE, LD. ASS ESSING OFFICER (AO) WAS DIRECTED TO APPEAR BEFORE THE BENCH ALONG WITH THE FACTUAL REPORT. THE LD. AO REMAINED PRESENT DURING THE HEAR ING WITH A REPORT WHICH READ AS UNDER: - OFFICE OF THE ASST.COMMISSIONER OF INCOME-TAX CIRCLE-2(3)(1) ROOM NO.552 ; AAYKAR BHAVAN M.K. ROAD, MUMBAI-400020 NO. ACIT-2(3)(L)/JUDICIAL/TECH MAHINDRA/2013-14/202 0-21~DATE: 06/10/2020 TO, CIT(DR), 1TAT, E-BENCH, PRATYAKSHKAR BHAVAN, MUMBAI- (THROUGH PROPER CHANNEL) SIR, SUB.: ITAT APPEAL IN THE CASE OF M/S, TECH MAHINDRA PAN: AAACM3484F (ITA NO.: 6167/M/17) A.Y.2013-14- REG. REF.: NO. CIT(DR)/ITAT-E BENCH/2020-21 DATED 25.09.2020 ITA NO.6167/MUM/2018 TECH MAHINDRA LIMITED ASSESSMENT YEAR :2013-14 3 KINDLY REFER TO THE ABOVE. 2. IN THIS CASE THE ASSESSEE E-FILED ITS ROI FOR A.Y . 2013-14 DECLARING TOTAL INCOME OF RS. 878, 76,28,7 56/- UNDER NORMAL PROVISIONS AND RS.2024,15,13,303/- U/S. 115JB OF THE INCOME-TAX ACT, 1961. SUBSEQUENTLY, THE CAS E WAS SELECTED FOR SCRUTINY UNDER CASS. THE ASSESSMENT U/S . 143(3) R.W.S 144C(3) OF THE ACT WAS COMPLETED ON 28.02.2017 DETERMINING TOTAL INCOME AT RS. 1467,73, 75,617/- UNDER NORMAL PROVISION AND RS,2515,28,19,78 5/- U/S. 115JB OF THE ACT. 3. SUBSEQUENTLY THE CASE WAS REVIEWED BY THE PR.CIT - 2, MUMBAI AND PASSED ORDER U/S 263 OF THE I.T. ACT, 1961. PR.CIT-2 HAS MADE THE FOLLOWING COMMENTS IN PARA 10 O F THE ORDER-: ' IN VIEW OF THE AFORESAID FACTS AND THE PROVISIONS OF THE LAW MENTIONED IN THE PRECEDING PARAS, THE ASSESSMENT ORDER DT 28.02.2017 PASSED BY THE ASSESS ING OFFICER U/S. 143(3) R.W.S.144C IS TO BE HELD ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE REV ENUE. ACCORDINGLY, THE ASSESSMENT ORDER IS REVISED AND THE ASSESSING OFFICER IS DIRECTED TO DISALLOW THE CLAIM OF EXPENSES OF RS.55,51,637/- BEING PAYMENT OF PENALTIES TO FOREIGN AUTHORITIES AS DISCUSSED IN PA RA 6 AND AN AMOUNT OF RS.10 CRORES ON ACCOUNT OF THE CLASS ACTION SETTLEMENT CONSIDERATION AS DISCUSSED IN PARA-7 AND TO RE-EXAMINE THE CLAIMS OF DTAA CREDI T U/S. 90 AND VARIOUS CLAIMS ON DERIVATIVE TRANSACTIO NS AND TO DETERMINE THE TOTAL INCOME ACCORDINGLY. T HE ASSESSMENT ORDER WILL BE MODIFIED BY THE AO TO THESE EXTENTS.' 4. FROM THE ABOVE PARA IT IS CLEAR THAT THE PR.CIT-2 , MUMBAI ORDER U/S. 263 HAS SPECIFICALLY DIRECTED T HE AO TO RE- COMPUTE THE TOTAL INCOME ON ABOVE MENTIONED ISSUES. THE ASSESSMENT ORDER U/S. 143(3) R.W.S 144C(3) OF TH E ACT WAS NEITHER SET ASIDE NOR DIRECTED FOR FRESH ASSESSM ENT, SO IT IS A DIRECTION TO GIVE EFFECT OF SECTION 263 ORDER. ACCORDINGLY THE ORDER GIVING EFFECT IS BEING PASSED , HENCE THE SECTION 151(3) DOES NOT APPLY TO THIS OR DER. YOURS FAITHFULLY SD/- (VINOD CHOUDHARY) ACIT-2(3)(1), MUMBAI IT ALSO TRANSPIRED THAT THE CONSEQUENTIAL ORDER HAS NOT BEEN PASSED TILL DATE AND THE SAME IS STILL IN THE PROCESS OF BEING PASSED. 4. UPON CAREFUL CONSIDERATION OF FACTS AND CIRCUMST ANCES, WE FIND THAT THE REVISIONAL JURISDICTION WAS EXERCISED VIDE ORDE R DATED 29/08/2018. THE PROVISIONS OF SECTION 153 PROVIDE TIME LIMIT FO R COMPLETION OF ASSESSMENT, REASSESSMENT AND RE-COMPUTATION. AS PER SUB SECTION (3), AN ORDER OF FRESH ASSESSMENT PURSUANT TO SECTION 26 3, SETTING ASIDE OR CANCELLING AN ASSESSMENT, MAY BE MADE AT ANY TIME B EFORE THE EXPIRY OF 9 MONTHS FROM THE END OF FINANCIAL YEAR IN WHICH OR DER U/S 263 HAS BEEN PASSED BY REVISIONAL AUTHORITY. THIS PERIOD, IN ASS ESSEES CASE IS 31/12/2019. THE PROVISO TO THE SAID SUB-SECTION EXT ENDING THE TIME LIMIT TO 12 MONTHS IS NOT APPLICABLE SINCE REVISIONAL ORD ER HAS BEEN PASSED ITA NO.6167/MUM/2018 TECH MAHINDRA LIMITED ASSESSMENT YEAR :2013-14 4 PRIOR TO 01/04/2019. PROCEEDING FURTHER, AS PER SUB -SECTION (5), WHERE EFFECT TO AN ORDER U/S 263 WAS TO BE GIVEN BY ASSES SING OFFICER, WHOLLY OR PARTLY, OTHERWISE THAN BY MAKING A FRESH ASSESSMENT OR REASSESSMENT, SUCH EFFECT SHALL BE GIVEN WITHIN A PERIOD OF 3 MON THS FROM THE END OF THE MONTH IN WHICH THE ORDER U/S 263 HAS BEEN PASSED BY REVISIONAL AUTHORITY. AS PER PROVISO TO THIS SUB-SECTION (5), WHERE IT IS NOT POSSIBLE FOR LD. AO TO GIVE EFFECT TO SUCH ORDER WITHIN THE AFORESAID PERIOD FOR REASONS BEYOND HIS CONTROL, THE PRESCRIBED AUTHORIT Y MAY ALLOW AN ADDITIONAL PERIOD OF 6 MONTHS TO GIVE EFFECT TO THA T ORDER. ALLOWING THIS EXTENDED PERIOD TO ASSESSEES CASE, THE TIME LIMIT TO PASS THE CONSEQUENTIAL ORDER WOULD BE 31/05/2019. 5. THUS, VIEWING FROM ANY ANGLE, THE TIME LIMIT TO PASS CONSEQUENTIAL ORDER HAS ALREADY BEEN EXPIRED AND THE SAME HAS BEC OME TIME-BARRED. IN FACT, NO SUCH ORDER HAS BEEN PASSED TILL DATE. C ONSEQUENTLY, THE PLEA OF LD. SR. COUNSEL HAS TO BE ACCEPTED AND THEREFORE , THE APPEAL WOULD STAND DISMISSED AS BEING INFRUCTUOUS. 6. ON THE FACTS AND CIRCUMSTANCES, THE APPEAL STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH OCTOBER, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 07/10/2020 SR.PS, JAISY VARGHESE ITA NO.6167/MUM/2018 TECH MAHINDRA LIMITED ASSESSMENT YEAR :2013-14 5 $%&'(' / COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT 2. -.+, / THE RESPONDENT 3. 5 ( ) / THE CIT(A) 4. 5 / CIT CONCERNED 5. 67-08 , 8 , / DR, ITAT, MUMBAI 6. 79:; / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.