SWIBER OFFSHORE CONSTRUCTION PTE LTD, MUMBAI V. ADDL DIT (IT) RG 2, MUMBAI

ITA 7724/MUM/2012

• Counselvise Citation: 772419914 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 23-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR NARENDRA KUMAR
• Keywords: Transfer pricing; Double taxation relief; Opportunity of being heard; International transaction; Additional evidence; Permanent establishment; Non compliance; Procedural lapse
• Section: 131; 144; 2; 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI . . , , , BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER . / ITA NO. 7724 /MUM./ 2012 ( / ASSESSMENT YEAR : 2009 10 ) SWIBER OFFSHORE CONSTRUCTION PTE. LTD. C/O DEVESH K. SHAH & CO. 106, 1 ST FLOOR & 203 2 ND FLOOR BANAJI HOUSE, 361 DR. D.N. ROAD FLORA FOUNTAIN, MUMBAI 400 001 .. / APPELLANT V/S ADDL. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) RANGE 2, MUMBAI .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AALCS6312H / A SSESSEE BY : SHRI GIRISH DAVE A/W SHRI MADHAV KHANDELWAL / REVENUE BY : DR. NARENDRA KUMAR / DATE OF HEARING 23.06.2014 / DATE OF ORDER 06.08.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED FINAL ASSESSMENT ORDER DATED 30 TH NOVEMBER 2012, PASSED IN PURSUANCE OF THE DIRECTIONS GIVEN BY THE DISPUTE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 2 RESOLUTION PANEL I (DRP), MUMBAI, UNDER SECTION 144C(5) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ), ON THE FOLLOWING GROUNDS: G OUND NO.1 : WRONGLY SUMMONING THE PROJECT MANAGER (APPOINTED AS CONSULTANT) OF THE APPELLANT UNDER SECTION 131 . 1.1 THE LEARNED ADIT ERRED IN LAW IN COMPLETING THE ASSESSMENT CONTRARY TO THE PROVISIONS OF SUB - SECTION (13) OF SECTION 144C OF THE ACT. GROUND NO.2 : ERRONEOUSLY HELD THAT THE APPELLANT HAS A FIXED PLACE PE SERVICE PE AND SUPERVISORY PE IN INDI A. 2.1 THE LEARNED DISPUTE RESOLUTION PANEL ('DRP') AND ADIT ERRED IN LAW AND ON FACTS IN CONCLUDING THAT THE APPELLANT HAD A FIXED PLACED PE IN INDIA AS PER THE INDIA - SINGAPORE DTAA. 2.2 THE LEARNED ADIT ERRED IN TREATING THE PROJECT MANAGER AS THE EMPLOYEE OF THE APPELLANT AND PROVIDING SERVICES AS ITS KEY PERSONNEL IN INDIA AND THEREBY CONCLUDING THAT THE APPELLANT ALSO HAD A SERVICE PE IN INDIA. 2.3 THE LEARNED DRP AND ADIT ERRED IN HOLDING THAT THE PROVISIONS OF ARTICLE 5(4) OF THE INDIA SINGAPORE DT AA WILL ALSO APPLY WHICH DEALS WITH THE CONSTITUTION OF A PE IN CASE THE SUPERVISORY ACTIVITIES IN INDIA EXCEED 183 DAYS IN A FISCAL YEAR IN RELATION TO A CONSTRUCTION, INSTALLATION OR ASSEMBLY PROJECT. GROUND NO.3 : SPECIFIC PROVISIONS DEALING WITH CONST RUCTION PE OF THE INDIA - SINGAPORE DTAA OUGHT TO BE CONSIDERED OVER THE GENERAL PROVISIONS . 3.1 IN DETERMINING EXISTENCE OF A PE, THE LEARNED ADIT ERRED IN APPLYING PROVISIONS OF FIXED PLACE PE UNDER ARTICLE 5(1), SUPERVISORY PE UNDER ARTICLE 5(4) AND SER VICE PE UNDER ARTICLE 5(6) INSTEAD OF APPLYING ONLY THE MORE SPECIFIC PROVISIONS OF CONSTRUCTION PE UNDER ARTICLE 5(3) OF THE INDIA - SINGAPORE DTAA AS APPLICABLE IN THE CASE OF THE APPELLANT. GROUND NO.4 : ERRONEOUSLY HELD THAT THE APPELLANT HAS A CONSTRU CTION PE IN INDIA. 4.1 THE LEARNED DRP AND ADIT HAS ERRED IN CONCLUDING THAT THE APPELLANT HAD A CONSTRUCTION PE IN INDIA AS PRESCRIBED UNDER ARTICLE 5(3) OF THE INDIA - SINGAPORE DTAA. SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 3 GROUND NO.5 : ERRONEOUS TAXATION OF THE INCOME RELATED TO ACTIVITIES CARRIED OUT OUTSIDE INDIA . 5.1 WITHOUT PREJUDICE TO THE CLAIM OF NO PE, THE LEARNED ADIT ERRED IN CONCLUDING THAT THE INCOME RELATED TO ACTIVITIES CARRIED OUT BOTH INSIDE AND OUTSIDE INDIA IS TAXABLE UNDER SECTION 44BB OF THE ACT. CONSEQUENTLY, THE ADI T HAS ERRED IN APPLYING THE PROVISIONS OF SECTION 44BB OF THE ACT TO THE REVENUE EARNED FROM ACTIVITIES CARRIED OUT OUTSIDE INDIA. 5.2 WITHOUT PREJUDICE TO THE CLAIM OF NO PE, THE LEARNED ADIT HAS ERRED IN NOT APPRECIATING THE FACT THAT AS PER THE PROVI SIONS OF ARTICLE 7(1) OF THE INDIA - SINGAPORE DTAA, ONLY SO MUCH OF THE PORTION OF INCOME SHOULD BE TAXABLE AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT BY SUCH PE IN INDIA. CONSEQUENTLY, THE ADIT HAS ERRED IN CONSIDERING THE REVENUE EARNED F ROM ACTIVITIES CARRIED OUT OUTSIDE INDIA FOR THE PURPOSE OF TAXAT ION. GROUND NO.6 : DISPUTE RESOLUTION PANEL (DRP) HAS ERRED IN NOT CONSIDERING THE LOSS CLAIM MADE BY THE APPELLANT 6.1 WITHOUT PREJUDICE TO THE CLAIM OF NO PE, DRP ERRED IN LAW AND ON FA CTS IN NOT PROVIDING ANY DIRECTION TO THE ADIT IN RESPECT OF LOSS CLAIMED BY THE APPELLANT BASED ON THE ALLOCATION AND BIFURCATION OF INCOME AND EXPENSES ATTRIBUTABLE TO INDIAN OPERATIONS. GROUND NO.7 : WRONGLY INVOKING ARTICLE 24 OF INDIA - SINGAPORE DTAA AND DENYING THE BENEFITS OF THE TAX TREATY. 7.1 THE DRP HAS ERRED IN REMANDING THE MATTER IN RESPECT OF THE APPLICABILITY OF ARTICLE 24 IN ITS DIRECTIONS IN TERMS OF THE PROVISIONS OF SUB - SECTION (8) OF SECTION 144C OF THE ACT WHICH IS CONTRARY TO LAW A ND TO THAT EXTENT THE DECISION OF THE LEARNED ADIT IS WITHOUT JURISDICTION. CONSEQUENTLY, THE DECISION OF THE ADIT RESULTING INTO ADDITION OF INCOME IS VITIATED UNDER LAW. 7.2 THE LEARNED ADIT ERRED IN LAW IN INVOKING ARTICLE 24 'LIMITATION OF RELIEF' IN RESPECT OF ONE OF THE REMITTANCE AMOUNTING TO RS.56,17,57,015/ - RELATING TO THE PROJECT UNDER CONSIDERATION AND DENYING THE BENEFIT OF INDIA - SINGAPORE DTAA. 7.3 WITHOUT PRE JUDICE TO THE ABOVE, THE LEARNED ADIT, WHILE DENYING THE BENEFIT OF INDIA - SINGAPORE DT AA, ERRED IN LAW IN TAXING THE AFORESAID AMOUNT UNDER THE HEAD 'INCOME FROM OTHER SOURCES' INSTEAD OF APPLYING THE PROVISIONS OF SECTION 44BB OF THE ACT. SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 4 GROUND NO.8 : ERRONEOUS INITIATION OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT . 8.1 THE LEARNED ADIT ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(B) WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAS COMPLIED WITH ALL THE NOTICES ISSUED BY THE LE ARNED ADIT AND HAS SUBMITTED ALL THE DOCUMENTS WHICH WERE REQUESTED FOR DURING THE ASSESSMENT PROCEEDINGS. GROUND NO.9 : ERRONEOUS LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. 9.1 THE LEARNED ADIT ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE AC T. GROUND NO.10 : GENERAL 10.1 THE LEARNED AD IT ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 10.2 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE AND/OR MODIFY IN ANY MANNER WHATSOEVER ALL OR ANY OF THE FORE GOING GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2 . THE LEARNED COUNSEL, SHRI GIRISH DAVE, ON BEHALF OF THE ASSESSEE, BY WAY OF PRELIMINARY OBJECTION, SUBMITTED THAT THE IMPUGNED FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN PUR SUANCE OF THE DIRECTIONS GIVEN BY THE DRP, IS CONTRARY TO THE PROVISIONS OF SECTION 144C, INASMUCH AS, FIRSTLY, THE DRP HAD SET ASIDE CERTAIN MATTERS TO THE ASSESSING OFFICER WHICH IS NOT PERMISSIBLE IN VIEW OF THE PROVISIONS OF SUB SECTION ( 8 ) OF SECTION 144C, AND SECONDLY, THE ASSESSING OFFICER HAS EVEN TRANSGRESSED THE DIRECTIONS OF THE DRP BY CARRYING OUT FURTHER ENQUIRY AND RECORDING THE STATEMENT UNDER SECTION 131, WHICH AGAIN IS CONTRARY TO THE PROVISIONS OF SUB SECTION ( 13 ) OF SECTION 144C. HENCE, SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 5 THE IMPUGNED FINAL ASSESSMENT ORDER IS LEGALLY NOT TENABLE, THEREFORE, THE SAME SHOULD BE QUASHED, AS, SUCH AN ILLEGALITY CANNOT BE CURED. 3 . EXPLAINING THE BRIEF FACTS OF THE CASE, T HE LEARNED COUNSEL, MR. GIRISH DAVE, SUBMITTED THAT THE ASSESSEE IS A COMPANY INCORPORATED AS PER THE LAWS OF SINGAPORE AND IS TAX RESIDENT OF SINGAPORE. IT IS ENGAGED IN THE ACTIVITY OF PROVIDING OFF SHORE ENGINEERING, PROCUREMENT, INSTALLATION AND CONSTRUCTION SERVICE S RELATING TO THE OFF SHORE OIL AND GAS EXPLORATION PROJ ECTS. THE ASSESSEE HAD ENTERED INTO A CONTRACT WITH B.G., WHICH IS A NOMINEE OF CO VENTURES , OIL AND NATURAL GAS COMMISSION LTD., RELIANCE INDUSTRIES LTD. AND BRITISH GAS. THE B.G. COMPANY IS REGISTERED IN CAYMAN I SLAND , HAVING ITS PRINCIPAL PLACE OF BUSIN ESS IN INDIA. THE AGREEMENT WAS ENTERED ON 30 TH SEPTEMBER 2008, BY WHICH THE ASSESSEE WAS REQUIRED TO PERFORM THE WORK LIKE ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THE PLATFORM WHICH INVOLVES DETAIL DESIGN, FABRICATION , ON SHORE COMMISSIONING AND SEA FASTENING FACILITIES. THE PROJECT ALSO INVOLVED TRANSPORTATION AND INSTALLATION OF CONSTRUCTIONS AND PIPELINES. THE ASSESSEE, IN THE RETURN OF INCOME FOR THE ASSESSEE YEAR 2009 10, CLAIMED THAT ITS INCOME FROM CONTRACT WITH B.G. IS NOT TAXABLE IN INDIA AS IT DOES NOT HAVE A PERMANENT ESTABLISHMENT (P.E) IN INDIA IN VIEW OF THE INDO SINGAPORE TREATY. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE MADE DETAIL ED SUBMISSIONS AFTER REFERRING TO ARTICLE 5 DEALING WITH P.E. SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 6 AND SUBMITTED THAT IT HAS NEITHER ESTABLISHED ANY PROJECT OFFICE IN INDIA DURING THE YEAR 2008 09, NOR OPENED ANY BANK ACCOUNT FOR THIS PROJECT. THE INSTALLATION OF THE PROJECT ALSO CANNOT BE HELD TO BE P.E., BECAUSE IT REQUIRES MORE THAN 183 DAYS IN ANY FISCAL YEAR , WHEREAS THE A CTIVITIES IN INDIA STARTED ONLY FROM NOVEMBER 2008 ONLY. THUS, THERE WAS NO PROJECT SITE IN EXISTENCE AND, THEREFORE, NO QUESTION OF ANY PROFIT BEING CHARGEABLE TO TAX IN INDIA. SEVERAL DECISIONS WERE ALSO REFERRED AND RELIED UPON BY THE ASSESSEE BEFORE TH E ASSESSING OFFICER DURING THE COURSE OF DRAFT ASSESSMENT PROCEEDINGS , WHICH HAVE BEEN INCORPORATED BY THE ASSESSING OFFICER FROM PAGE 5 TO 7 OF THE ORDER. THEREAFTER, THE ASSESSING OFFICER EXAMINED THE AGREEMENT ENTERED BETWEEN THE ASSESSEE AND B.G. AND C ONCLUDED THAT THE ASSESSEE HAS P.E. IN INDIA IN THE FORM OF FIXED PLACE P.E. , UNDER ARTICLE 5(3). THEREAFTER, HE HELD THAT THE ACTIVITIES OF THE ASSESSEE COMPANY ARE SQUARELY COVERED BY THE PROVISIONS OF SECTION 44BB AND LIABILITY TO TAX WILL ARISE UNDER S ECTION 44BB AND, ACCORDINGLY, HE ASSESSED THE INCOME UNDER THE DEEMING PROVISIONS OF SECTION 44BB AND TAXED 10% OF GROSS RECEIPT OF ` 435,24,25,151 . 4 . AGAINST THE SAID DRAFT ASSESSMENT ORDER, THE ASSESSEE RAISED VARIOUS OBJECTIONS BEFORE THE DRP , REBUTTING EACH AND EVERY OBSERVATIONS MADE BY THE ASSESSING OFFICER THAT HOW A P.E. CANNOT BE SAID TO HAVE BEEN ESTABLISHED IN INDIA IN THIS FISCAL YEAR UNDER THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 7 VARIOUS PROVISIONS OF ARTICLE 5. ITS MAIN PLANK OF ARGUMENT BEFORE THE DRP WAS THAT: I ) BETWEE N APRIL 2008 AND OCTOBER 2008, THERE WERE ONLY INTERMITTENT VISITS OF ITS EMPLOYEES; II ) PRE CONSTRUCTION SURVEY WAS DONE ONLY IN NOVEMBER 2008; III ) AS THE ASSESSEE WAS ENGAGED IN CONSTRUCTION ACTIVITY, P.E. WILL ARISE ONLY IF CONSTRUCTION ACTIVITY IS DONE FOR MOR E THAN 183 DAYS IN A FISCAL YEAR. FIXED PLACE P.E. UNDER PARA 1 CANNOT BE MADE OUT IN A CASE OTHERWISE COVERED BY PARA 3 OF ARTICLE 5 OF INDIA SINGAPORE DTAA. 5 . THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE DRP, WITHOUT CONSIDERING THE ASSESSEES OBJECTIO N AND VARIOUS DOCUMENTS FILED BEFORE IT, PROCEEDE D ON CERTAIN WRONG PRESUMPTIONS, FIRSTLY, THAT THE ASSESSEE HAS FILED CERTAIN FRESH DOCUMENTS WHICH WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER. TO DEMONSTRATE THIS CONTENTION, HE REFERRED TO PARA 7 OF T HE DRPS ORDER, WHEREIN IT HAS BEEN OBSERVED THAT CERTAIN EXHIBITS LIKE I , J AND K , OF THE AGREEMENT WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER, WHEREAS THE SAME WERE PART OF THE AGREEMENT ITSELF WHICH HAS BEEN NOTED BY THE ASSESSING OFFICER IN THE ORDER. HE ALSO DREW OUR ATTENTION TO THE LETTER FILED BEFORE THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 8 ASSESSING OFFICER ALONG WITH WHICH THE ASSESSEE HAS FILED ALL THE ANNEXURE S TO THE AGREEMENT INCLUDING THE ONE, REFERRED BY THE DRP BEFORE THE ASSESSING OFFICER. SECONDLY, T HE DRP, INSTEAD OF GIVING ANY SPECIFIC FINDINGS ON THE OBJECTION RAISED BEFORE IT, HAS SIMPLY REMANDED THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO TAKE NOTE OF CERTAIN FACTS , INSTEAD OF DECIDING THE SAME WHICH IT W AS REQUIRED TO DO SO UNDER THE PROVISIONS OF THE ACT. THE LEARNED COUNSEL DREW OUR ATTENTION TO PARA 7/PAGE 4 AND PARA 16 OF THE DRPS ORDER, WHEREIN THE DRP HAS SIMPLY REMANDED THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE EVIDENCE FILED BY THE ASSESSEE AND TO TAKE INTO ACCOUNT IN THE FINAL ORDER. NOT ONLY THAT T HE ASSESSING OFFICER, IN THE FINAL ASSESSMENT ORDER, WENT STEP FURTHER AND BEYOND THE DIRECTIONS OF THE DRP, BY CARRYING OUT FURTHER ENQUIRY / INVESTIGATION FOR CONFIRMING THE TAX ABLE INCOME / ADDITIONS. SUCH A DIRECTION GIVEN BY THE DRP IS FIRST OF ALL, COMPLETELY AGAINST THE MANDATE OF THE PROVISIONS OF SECTION 144C(8) AND SECONDLY, THE FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS IN VIOLATION OF SECTION 144C(13). IN SUPPORT OF HIS FIRST CONTENTION, HE STRONGLY RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN VODAFONE INDIA SERVICES PVT. LTD. V/S UNION OF INDIA, [2013] 359 ITR 133 (BOM.), WHEREIN THE HON'BLE HIGH COURT CATEGORICALLY HELD THAT PROVI SIONS OF SECTION 144C, DO NOT PERMIT THE DRP TO SET ASIDE ANY PROPOSED VERIFICATION IN THE DRAFT ASSESSMENT ORDER OR ISSUED ANY DIRECTION OF FURTHER ENQUIRY AND PASSING OF THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 9 ASSESSMENT ORDER. THUS, THE LEARNED COUNSEL CONTENDED THAT THE IMPUGNED FINAL AS SESSMENT ORDER IS IN COMPLETE VIOLATION OF PROVISIONS OF SECTION 144C AND, THEREFORE, IT HAS TO BE HELD AS ILLEGAL, BEING IN VIOLATION OF LAW. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSING OFFICER HAS NOT VIOLATE D ANY THE DIRECTIONS OF THE DRP, AS HE HAS CARRIED OUT ENQUIRY IN PURSUANCE OF THE DIRECTIONS OF THE DRP ONLY. REGARDING DRPS ORDER, HE SUBMITTED THAT THE DRP HAS HELD THAT THERE WAS A P.E. OF THE ASSESSEE IN INDIA, WHICH IS EVIDENT FROM THE OBSERVATION M ADE IN PARA 9, 10, 11 AND 12. THOUGH HE ADMITTED THAT THE DRP, WHILE CONSIDERING THE DOCUMENTS FILED BE FORE IT TOOK IT AS AN ADDITIONAL EVIDENCE AND HAS REMANDED THE MATTER TO THE ASSESSING OFFICER TO TAKE INTO ACCOUNT SUCH EVIDENCES AND ALSO CARRY OUT NEC ESSARY PROCEEDINGS AND THEN PASS THE ORDER ACCORDINGLY, WHICH CAN BE , IN A WAY, SAID TO BE SET TING ASIDE OF THE ASSESSMENT ORDER; H OWEVER, SUCH A DIRECTION OF THE DRP CAN, AT BEST, BE TERMED AS PROCEDURAL DEFECT WHICH CAN BE CURED BY SETTING ASIDE THE MATTER BACK TO THE FILE OF THE DRP FOR GIVING CLEAR CUT DIRECTION AND ADJUDICATION O F THE ISSUE. TO PROVE HIS POINT, HE SUBMITTED THAT SECTION 144C, IS ANALOGOUS TO OLD SECTION 144B, AND IN THE CONTEXT OF SECTION 14 4B, VARIOUS HIGH COURTS HAVE HELD THAT IT IS A PROCEDURAL MECHANISM AND IF THERE IS ANY IRREGULARITY, THEN THE MATTER CAN BE SET ASIDE TO THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 10 FILE OF THE ASSESSING OFFICER OR THE DEFECT CAN BE CURED. IN SUPPORT OF HIS CONTENTION, HE RELIE D UPON THE FOLLOWI NG CASE LAWS, WHICH ARE BEING ANALYSED IN BRIEF: I ) GAYATRI TEXTILES V/S CIT, [2000] 243 ITR 674 (KAR.), WHEREIN, IN THE CONTEXT OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C), THE PRIOR APPROVAL OF IAC WAS CONSIDERED TO BE PROCEDURAL REGULARITIES AND IT WA S HELD NOT FATAL TO THE ORDER OF PENALTY; II ) SARABJIT SINGH V/S CIT, [1998] 234 ITR 641 (DEL.), WHEREIN, THE HIGH COURT HAS HELD THAT SECTION 144B, MERELY SET OUT THE PROCEDURE TO BE FOLLOWED IN CERTAIN SITUATION AND ANY NON COMPLIANCE OF ANY PROCEDURAL LAW IS MERELY A PROCEDURAL IRREGULARITY WHICH COULD BE CURED; III ) PRABHUDAYAL AMICHAND V/S CIT, [1956] 180 ITR 84 (M.P), WHEREIN THE HIGH COURT IN THE CONTEXT OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C), HAS HELD THAT IF APPROVAL OF IAC HAS NOT BEEN TAKEN, THE PENALTY ORDER CANNOT BE QUASHED AND THE MATTER SHOULD BE REMANDED TO THE ITO FOR PASSING A FRESH ORDER AS IT WAS A PROCEDURAL IRREGULARITY; AND SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 11 IV ) G.R. STEELS AND ALLOYS LTD. V/S CIT, [1985] 152 ITR 220 (KAR.), THIS CASE WAS ALSO IN THE CONTEXT OF SECTION 1 44B, WHEREIN THE HIGH COURT HELD THAT THE SAID PROVISION HAS NOT BEEN COMPLIED WITH, THEN, IT IS MERELY A PROCEDURAL IRREGULARITY AND DO NOT HAVE THE EFFECT OF INVALIDATING THE ASSESSMENT. 7 . THUS, HE CONCLUDED THAT IF THERE IS ANY IRREGULARITY IN GIVING DIR ECTIONS TO THE ASSESSING OFFICER, THEN THE SAME IS ONLY PROCEDURAL IRREGULARITY WHICH CAN BE CURED BY SETTING IT ASIDE BACK TO THE STAGE OF DRP I.E. , FROM THE STAGE WHERE THE IRREGULARITY HAS CREPT IN AND IT DOES NOT LEAD TO INVALIDATING THE ASSESSMENT. 8 . IN THE REJOINDER, SHRI GIRISH DAVE, SUBMITTED THAT THE PROVISIONS OF SECTION 144B AND 144C, ARE NOT PARI MATERIA , AS SUB SECTION 13 OF SECTION 144C, CLEARLY PROVIDES THAT THE ASSESSING OFFICER HAS TO PASS THE ORDER IN CONFORMITY WITH THE DIRECTION OF THE DRP. SUCH A PROVISION WAS NOT THERE IN SECTION 144B. OTHERWISE ALSO, THE SCOPE AND POWER OF THE DRP, AS DEFINED IN SECTION 144C, IS ON DIFFERENT FOOTING AS CO MPARED TO THE SCOPE OF POWER OF IAC OR DY. COMMISSIONER GIVEN IN SECTION 144B. THUS, THE DECISION CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WILL NOT BE APPLICABLE. EVEN THE DECISIONS RELATING TO THE APPROVAL OF IAC FOR LEVY OF PENALTY UNDER SECTION 271(1)(C), WILL ALSO NOT APPLY HERE IN THIS CASE IN VIEW OF THE CATEGORICAL PROVISIONS OF THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 12 ACT PROVIDED IN THE SECTION 144C . FURTHER, T HE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN VODAFONE INDIA SERVICES PVT. LTD. (SUPRA) , IS AMPLY CLEAR THAT THE DRP CANNOT SET ASIDE THE MATTER BEFORE IT TO THE ASSESSING OFFICER. IT HAS TO DECIDE THE OBJECTIONS AFTER CONSIDERING ALL THE MATERIAL AND THEN GIVE CLEAR CUT DIRECTIONS TO THE ASSESSING OFFICER. THUS, THE ILLEGALITY WHICH HAS OCCURRED IN THE DIRECTIO NS OF THE DRP BY SETTING ASIDE TO THE ASSESSING OFFICER FOR FURTHER ENQUIRY AND CONSIDERING THE EVIDENCE CANNOT BE CURED AND, THEREFORE, THE MATTER SHOULD NOT BE SET ASIDE BACK TO DRP INSTEAD SHOULD BE HELD AS VITIATED IN LAW. 9 . WE HAVE HEARD THE RIVAL SUBM ISSIONS AND ALSO PERUSED THE IMPUGNED ORDERS QUA THE PRELIMINARY OBJECTION RAISED BY THE LEARNED COUNSEL BEFORE US. THE ISSUE BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE DRP WAS, WHETHER THE INCOME FROM THE CONTRACT BUSINESS WAS TAXABLE IN INDIA DUR ING THE RELEVANT FINANCIAL YEAR OR NOT . THE ASSESSEE , WHICH IS A NON RESIDENT, SINGAPORE BASED COMPANY , HA D ENTERED INTO A CONTRACT WITH B.G. WHICH IS HAVING ITS OFFICE IN INDIA, FOR ENGINEERING, PROCUREMENT, INSTALLATION AND CONSTRUCTION AND VARIOUS OTHER SUPPORT SERVICES FOR OFF SHORE OIL AND GAS EXPLORATION CARRIED OUT BY THE B.G. IN INDIA. THE ASSESSEES CLAIM HAD BEEN THAT ITS INCOME FROM THE CONTRACT IS NOT TAXABLE IN INDIA UNDER THE INDO SINGAPORE TREATY AS IT DOES NOT HAVE A P.E. IN INDIA. IN SUPPOR T OF ITS CONTENTION, SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 13 DETAIL ED SUBMISSIONS ALONG WITH THE CONTRACT AGREEMENT AND OTHER DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER , DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAD REJECTED THE ASSESSEES CONTENTION AND HELD TH AT THE ASSESSEE HAD A P.E. ON THE GROUND THAT THE ASSESSEE HAD ESTABLISHED THE PROJECT OFFICE IN MARCH 2008, WHICH CONTINUED TILL 31 ST MARCH 2009 AND, THEREFORE, THE ASSESSEE HAD FIXED PLACE P.E. UNDER ARTICLE 5. BEFORE THE DRP, THE ASSESSEE HAD MADE ELABO RATE OBJECTIONS , CONTENDING THAT THERE CANNOT BE A FIXED PLACE P.E. IN THE ASSESSEES CASE , BECAUSE THE PRE CONSTRUCTION SURVEY ITSELF WAS DONE IN NOVEMBER 2008, AFTER AGREEMENT WAS ENTERED IN SEPTEMBER 2008. THE CONSTRUCTION ACTIVITY OF THE ASSESSEE WAS NOT CARRIED OUT FOR A PERIOD OF MORE THAN 183 DAYS IN RELEVANT FISCAL YEAR AND, THEREFORE, T HERE WAS NO P.E. UNDER PARA 3 OF ARTICLE 5 AND IF THE ASSESSEES CASE IS OTHERWISE COVERED BY PARA 3 OF ARTICLE 5, THEN FIXED PLACE P.E. UNDER PARA 1 CANNOT BE MADE OUT. ON A PERUSAL OF THE DRPS ORDER, IT IS SEEN THAT FIRST OF ALL, THEY HAVE GONE ON THE P REMISE THAT CERTAIN DOCUMENTS FURNISHED BEFORE THEM WHICH WERE PART OF THE AGREEMENT , WERE NOT FILED BEFORE THE ASSESSING OFFICER . SUCH AN O BSERVATION OF THE DRP APPEAR S TO BE CONTRARY TO THE RECORD , AS THE ASSESSEE ALONG WITH THE LETTER FILED BEFORE THE A SSESSING OFFICER HAD FILED THE CONTRACT AGREEMENT ALONG WITH ITS THE ANNEXURES. THEREAFTER, THE DRP HAS TRIED TO HIGHLIGH T CERTAIN DISCREPANCIES IN THE DETAILS FURNISHED BEFORE THE ASSESSING OFFICER AND BEFORE THE DRP, SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 14 WHICH HAS BEEN BRIEFLY DISCUSSED IN P ARA 7 AND ON THAT PREMISE, DIRECTION WAS GIVEN TO THE ASSESSING OFFICER TO TAKE NOTE OF SUCH FACTS, WHILE FRAMING THE ASSESSMENT ORDER AND ALSO TO TAKE NECESSARY PROCEEDINGS AS DEEM FIT. THE RELEVANT OBSERVATIONS OF THE DRP AS GIVEN IN PARA 7 ARE AS UNDER: 7. BEFORE THE DRP THE ASSESSEE SUBMITTED CERTAIN FRESH DOCUMENTS WHICH WERE NOT PRODUCED BEFORE A.O. THEY INCLUDED 3 EXHIBITS I.E., I, J, & K OF THE AGREEMENT, THAT WERE NOT PRODUCED BEFORE THE A.O. THE FRESH DOCUMENTS ALSO INCLUDED THE PERIOD OF STAY IN INDIA BY VARIOUS EMPLOYEES AND PERSONNEL OF THE ASSESSEE DURING THE PREVIOUS YEAR. REGARDING THE PERIOD OF STAY IT IS OBSERVED THAT IN ITS SUBMISSION DATED 17 TH SEPT 2012, THE ASSESSEE PROVIDED DETAILS OF THREE OF ITS EMPLOYEES WHO VISITED INDIA C ONSISTENTLY RIGHT FROM JANUARY 2008. THEIR OVERALL STAY WAS SHOWN AS 45 DAYS IN INDIA. HOWEVER, AS PER THE DETAILS OF EMPLOYEES VISIT PROVIDED TO THE A.O. IT WAS STATED THAT A PERIOD OF 22 DAYS WERE SPENT BY THE EMPLOYEES IN INDIA. IT IS FOUND THE ASSESSEE IS NOW FURNISHING DETAILS BEFORE THE DRP SHOWING PARTICULARS OF 45 DAYS SPENT BY THE EMPLOYEES IN INDIA. THUS, THERE ARE SIGNIFICANT DISCREPANCY BETWEEN DETAILS GIVEN TO THE A.O. AND THE DRP. THE A.O. IS DIRECTED TO TAKE NOTE OF THESE FACTS WHILE FRAMING THE ASSESSMENT ORDER AND ALSO TAKE NECESSARY PROCEEDINGS AS DEEMED FIT. 10 . FROM THE ABOVE, IT IS EVIDENT THAT SUCH A DIRECTION TO THE ASSESSING OFFICER TANTAMOUNTS TO SETTING ASIDE OF THE MATTER TO THE ASSESSING OFFICER INSTEAD OF ADJUDICATING THE ISSUE . ON THE ISSUE OF P.E., THE DRP THOUGH HAS UPHELD THE FINDINGS OF THE ASSESSING OFFICER THAT THERE IS P.E. OF THE ASSESSEE IN INDIA , HOWEVER, IN THE END, THE MATTER HAS BEEN SENT TO THE ASSESSING OFFICER TO CONSIDER THE EVIDENCES FILED BY THE ASSESSEE. THERE SEEMS TO BE NO CLEAR CUT SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 15 DIRECTION TO THE ASSESSING OFFICER, WHICH IS EVIDENT FROM THE FOLLOWING OBSERVATIONS, AS APPEARING IN PARA 16. 16. THE ASSESSEE HAS FILED A NUMBER OF ADDITIONAL EVIDENCES BEFORE THE DRP. THE ASSESSEE MAY FILE A COPY OF THE SAME BEFORE THE A.O. WHO MAY TAKE THEM INTO ACCOUNT IN THE FINAL ORDER. AS REGARDS APPLICABILITY OF ARTICLE 24 OF INDIA SINGAPORE DTAA IT WAS SEEN THAT ONE OF THE REMITTANCE WAS NOT IN FAVOUR OF THE ASSESSEE. THE A.O. MAY TAKE THIS INTO ACCOUNT WHILE PASSING TH E ORDER AND NOT ALLOW THE DTAA BENEFIT IF CONDITIONS OF ARTICLE 24 ARE NOT FULFILLED. 11 . THUS, THE DRP HAS AGAIN LEFT THE ISSUE OPEN BY SETTING ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO TAKE INTO ACCOUNT THE NUMBER OF ADDITIONAL EVIDENCE FILE D BEFORE IT AND PASS FINAL ORDER ACCORDINGLY. THE APPLICABILITY OF ARTICLE 24 HAS ALSO BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. NOW, I N THIS BACKGROUND, WE HAVE TO EXAMINE THE OBJECTION RAISED BEFORE US, AS TO WHETHER THE DRP HAS DELEGATED ITS STATUTORY POWER TO THE ASSESSING OFFICER. 12 . THE PROVISIONS OF SECTIONS 144C PROVIDES THE ENTIRE MECHANISM FO R MAKING A REFERENCE TO THE DRP; POWERS OF THE DRP AND ALSO THE PROCEDURES WHICH HAVE TO BE FOLLOWED TO ISSUE DIRECTION S TO THE ASSESSING OFFICER. TH E RELEVANT PROVISIONS OF SECTION 144C, WHICH ARE RELEVANT FOR OUR PURPOSE , ARE REPRODUCED HEREIN BELOW: REFERENCE TO DISPUTE RESOLUTION PANEL 144C. (1) XXXXX (2) XXXXX SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 16 (3) XXXXX (4) XXXXX (5) THE DISPUTE RESOLUTION PANEL SHALL, IN A CASE WHERE ANY OBJECTION IS RECEIVED UNDER SUB - SECTION (2), ISSUE SUCH DIRECTIONS, AS IT THINKS FIT, FOR THE GUIDANCE OF THE ASSESSING OFFICER TO ENABLE HIM TO COMPLETE THE ASSESSMENT. (6) THE DISPUTE RESOLUTION PANEL SHALL ISSUE THE DIRECTIONS REFERRED TO IN SUB - SE CTION (5), AFTER CONSIDERING THE FOLLOWING, NAMELY: (A) DRAFT ORDER; (B) OBJECTIONS FILED BY THE ASSESSEE; (C) EVIDENCE FURNISHED BY THE ASSESSEE; (D) REPORT, IF ANY, OF THE ASSESSING OFFICER, VALUATION OFFICER OR TRANSFER PRICING OFFICER OR ANY O THER AUTHORITY; (E) RECORDS RELATING TO THE DRAFT ORDER; (F) EVIDENCE COLLECTED BY, OR CAUSED TO BE COLLECTED BY, IT; AND (G) RESULT OF ANY ENQUIRY MADE BY, OR CAUSED TO BE MADE BY, IT. (7) THE DISPUTE RESOLUTION PANEL MAY, BEFORE ISSUING ANY DIRECT IONS REFERRED TO IN SUB - SECTION (5), (A) MAKE SUCH FURTHER ENQUIRY, AS IT THINKS FIT; OR (B) CAUSE ANY FURTHER ENQUIRY TO BE MADE BY ANY INCOME - TAX AUTHORITY AND REPORT THE RESULT OF THE SAME TO IT. (8) THE DISPUTE RESOLUTION PANEL MAY CONFIRM, REDUCE OR ENHANCE THE VARIATIONS PROPOSED IN THE DRAFT ORDER SO, HOWEVER, THAT IT SHALL NOT SET ASIDE ANY PROPOSED VARIATION OR ISSUE ANY DIRECTION UNDER SUB - SECTION (5) FOR FURTHER ENQUIRY AND PASSING OF THE ASSESSMENT ORDER. [EXPLANATION. FOR THE REMOVA L OF DOUBTS, IT IS HEREBY DECLARED THAT THE POWER OF THE DISPUTE RESOLUTION PANEL TO ENHANCE THE VARIATION SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED THE POWER TO CONSIDER ANY MATTER ARISING OUT OF THE ASSESSMENT PROCEEDINGS RELATING TO THE DRAFT ORDER, SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 17 NOTWITHSTANDING THAT SUCH MATTER WAS RAISED OR NOT BY THE ELIGIBLE ASSESSEE.] (9) XXXXX (10) EVERY DIRECTION ISSUED BY THE DISPUTE RESOLUTION PANEL SHALL BE BINDING ON THE ASSESSING OFFICER. (11) XXXXX (12) XXXXX (13) UPON RECEIPT OF THE DIRECTIONS ISSUED UNDER SUB - SECTION (5), THE ASSESSING OFFICER SHALL, IN CONFORMITY WITH THE DIRECTIONS, COMPLETE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 153 [OR SECTION 153B ], THE ASSESSMENT WITHOUT PROVIDING ANY FURTHER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH DIRECTION IS RECEIVED. (14) XXXXX (14A) XXXXX (15) XXXXX 13 . ON A PERUSAL OF THE ABOVE STATUTORY PROVISIONS, IT CAN BE SEEN THAT: I ) WHERE THE OBJECTIONS HAVE BEEN FILED BY THE ASSESSEE, THE DRP HAS TO ISSUE DIRECTIONS TO THE ASSESSING OFFICER FOR HIS GUIDANCE SO AS TO ENABLE HIM TO COMPLETE THE ASSESSMENT; II ) SUCH DIRECTIONS CAN BE GIVEN AFTER CONSIDERING THE VARIOUS FACTORS WHICH HAVE BEEN ELABORATED IN SUB SECTION (6); SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 18 III ) POWER TO MAKE ENQUIRY, BEFORE ISSUING ANY DIRECTIONS, HA S BEEN PROVIDED TO THE DRP A S PER SUB SECTION (7); IV ) THE DRP, WHILE ISSUING THE DIRECTIONS TO THE ASSESSING OFFICER, MAY CONFIRM, REDUCE OR ENHANCE THE VARIATION PROPOSED BY THE ASSESSING OFFICER IN THE DRAFT ASSESSMENT ORDER. HOWEVER, THE DRP DOES NOT HAVE ANY POWER TO SET ASIDE ANY PROPOSED VARIATION OR ISSUE ANY DIRECTION FOR FURTHER ENQUIRY AND PASSING OF THE ASSESSMENT ORDER I.E., THE DRP HAS TO GIVE A CLEAR CUT DIRECTION TO THE ASSESSING OFFICER; AND V ) THE DIRECTION ISSUED BY THE DRP IS BINDING ON THE ASSESSING OFFICER AND ONCE TH E DIRECTION HAS BEEN GIVEN TO THE ASSESSING OFFICER, THEN, THE ASSESSING OFFICER IS OBLIGED TO PASS THE ORDER IN CONFORMITY WITH SUCH DIRECTION WITHOUT GIVING ANY FURTHER OPPORTUNITIES TO THE ASSESSEE. THUS, THE STATUTE HAS PROVIDED SUFFICIENT POWER TO D RP FOR CONSIDERING ALL THE MATERIAL PLACED BEFORE IT AND TO CONDUCT ENQUIRY BEFORE ISSUING ANY DIRECTION TO THE ASSESSING OFFICER. AFTER EMPOWERING THE DRP IN SUCH A WIDE MANNER, THE STATUTE CONTEMPLATES THAT THE DRP SHOULD GIVE CATEGORICAL DIRECTION TO TH E ASSESSING OFFICER FOR PASSING SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 19 THE ASSESSMENT ORDER. IT CANNOT DELEGATE ITS AUTHORITY BACK TO THE ASSESSING OFFICER. 14 . HERE MAXIM OF DELEGAT U S NON POTEST DELEGARE WOULD BE SQUARELY APPLICABLE, WHICH ENVISAGES THAT WHEN A POWER HAS BEEN CONFERRED UPON A PERSON, THEN HE MUST EXERCISE THAT POWER ALONE , UNLESS EXPRESSLY EMPOWERED TO DELEGATE I T TO ANOTHER. IN OTHER WORDS, WHEN THE STATUTE PRESCRIBES A PARTICULAR BODY OR AUTHORITY TO EXERCISE POWER, THEN IT MUST BE EXERCISE D BY THAT BODY O R AUTHORITY ALONE. T HE PROVISIONS OF STATUTE, AS CONTAINED IN SUB SECTION (8) OF SECTION 144C, CLEARLY PROHIBITS THE DRP TO DELEGATE ITS POWER TO THE ASSESSING OFFICER I.E., TO SET ASIDE THE PROPOSED VARIATION OR ISSUE ANY DIRECTION TO CARRY OUT ANY FURTHER ENQUIRY BY THE ASS ESSING OFFICER AND TO TAKE HIS OWN DECISION OR DISCRETION BEFORE PASSING OF THE FINAL ASSESSMENT ORDER. 15 . IN THE PRESENT CASE, THERE IS A CLEAR CUT VIOLATION OF SECTION 144C(8) BY THE DRP . NOT ONLY THIS, THERE IS A FURTHER VIOLATION BY THE ASSESSING OFFICE R IN THE FINAL ASSESSMENT ORDER , AS HE WENT STEP FURTHER IN INTERPRETING THE DIRECTION O F THE DRP , BY CARRYING OUT FURTHER ENQUIRY AND RECORDING THE STATEMENT OF PROJECT MANAGER , SHRI K.G. RAMESH. THUS, RIGHT FROM THE STAGE OF ISSUANCE OF THE DIRECTION BY THE DRP TO THE STAGE OF PASSING OF THE FINAL ASSESSMENT ORDER, THERE HAS BEEN A GROSS VIOLATION OF STATUTORY PROVISIONS AND THE POWERS GIVEN THEREIN. OTHERWISE ALSO, T HE DRP IS A QUASI JUDICIAL AUTHORITY AND, THEREFORE, SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 20 WHILE DEALING WITH THE LIS IT IS OB LIGED TO ASCRIBE COGENT AND GERMANE REASONS AS TO WHY THE ASSESSEES OBJECTIONS ARE NOT MAINTAINABLE AND THERE SHOULD BE ABSOLUTELY CLARITY O N THE DIRECTIONS TO THE ASSESSING OFFICER , BECAUSE THE LAW DOES NOT ENVISAGE FOR PROVIDING FURTHER OPPORTUNITY TO T HE ASSESSEE AT THE STAGE OF PASSING OF FINAL ASSESSMENT ORDER. THUS, WE ARE OF THE OPINION THAT THE ORDER / DIRECTION OF THE DRP, AS A WHOLE, IS NOT IN CONSONANCE WITH SUB SEC . (5) R/W SUB SEC . (8) OF SECTION 144C. 16 . NOW, IN SUCH SITUATION, WHETHER THE ENT IRE DIRECTION OF THE DRP SHOULD BE HELD AS ILLEGAL WHICH CANNOT BE CURED OR WHETHER IT IS A N IRREGULAR EXERCISE OF POWER. IN OUR OPINION, IF AN AUTHORITY HAS NOT CARRIED OUT THE FUNCTION OR EXERCISED POWER, AS PROVIDED IN THE STATUTE OR IT HAS TRANSGRESSED THE STATUTORY POWER , THEN IT AMOUNTS TO GROSS IRREGULARITY OF EXERCISING OF POWER AND SUCH AN IRREGULARITY IS NOT FAT A L, SO AS TO DECLARE THE ENTIRE PROCEEDINGS AS NULL AND VOID RESULTING INTO QUASHING OF THE ENTIRE ORDER. A DISTINCTION HAS TO BE MADE BETWEEN ILLEGAL ASSUMPTION OF JURISDICTION PROVIDED IN THE STATUTE AND IRREGULAR EXERCISE OF STATUTORY POWER. I F A JURISDICTION IS TO BE ASSUMED UNDER A STATUTE BY A PARTICULAR AUTHORITY TO ACT OR TO INITIATE ACTION OR THERE IS AN ISSUE OF LIMITATION WITHI N WHICH CERTAIN ACTION IS TO BE TAKEN OR AN ORDER IS TO BE PASSED, THEN ANY VIOLATION OF SUCH A STATUTORY PROVISIONS OR ASSUMPTION OF JURISDICTION OR TAKING ANY ACTION AFTER THE PERIOD OF SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 21 LIMITATION , IS AN ILLEGAL EXERCISE OF STATUTORY FUNCTION OR PROVISIO N, WHICH CANNOT BE OBLITERATED OR CURED AND SUCH AN ACTION HAS TO BE QUASHED AT THE THRESHOLD . HERE, IT IS NOT A CASE OF ANY ILLEGAL ASSUMPTION OF JURISDICTION OR ANY ISSUE OF LIMITATION , ALBI E T THERE IS A TRANSGRESSION OF SCOPE AND POWER PRESCRIBED UNDER STATUTE I.E., UNDER SECTION 144C. S UCH A TRANSGRESSION IS ONLY AN IRREGULAR EXERCISE OF POWER WHICH IS NOT FATAL BUT CAN BE CURED BY SETTING ASIDE SUCH ORDER OR ACTION , BACK TO THE SAME STAGE AND TO THE SAME AUTHORITY FROM WHERE THE IRREGULARITY HAS CREPT IN. SUCH AN ORDER IS ALWAYS AMENABLE TO CORRECTION FROM THE STAGE FROM WHERE IT WENT WRONG. HERE, IN THE PRESENT CASE, ON A PERUSAL OF THE ORDER OF THE DRP, IT IS EVIDENT THAT INSOFAR AS THE ISSUE OF P.E. IS CONCERNED, THEY HAVE EXPRESSED THEIR OPINION, HO WEVER, THEY HAVE ULTIMATELY LEFT TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFTER TAKING INTO CONSIDERATION VARIOUS EVIDENCE S FILED BY THE ASSESSEE . HENCE, INSTEAD OF DECIDING OR CLEARLY ADJUDICATING THE ISSUE, THE MATTER HAS BEEN DELEGATED TO THE A .O. W HICH SHOULD NOT HAVE BEEN DONE. 17 . THE AFORESAID VIEW FURTHER GETS FORTIFIED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN VODAFONE INDIA SERVICE PVT. LTD. (SUPRA), AS RELIED UPON BY THE LEARNED COUNSEL. IN THIS DECISION, THEIR LORDSHIPS WERE BESIEGED WITH THE JURISDICTION OF THE TRANSFER PRICING OFFICER (TPO) UNDER SECTION 92CA(2A) AND (2B), IN THE WRIT PETITION F ILED BY THE ASSESSEE PETITIONER AND HELD AS UNDER: SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 22 / 104 . A L THOUGH THE TPO HAS MADE HIS ORDER WITHOUT ANY OBJECTION BY THE PETIT I ONER AS TO H I S JURISDICTION , WE WOU L D HAVE ENTERTA I NED THIS PET I T I O N, HAD WE COME TO THE CONC L USION THAT THE TPO LACKED INHERENT J U RI SD I CT I ON UNDER SECTION 92CA(2A) AND (2B) AND THAT THIS INHE R ENT LACK OF JURISD I CT I O N AFFECTED THE FURTHER PROCEED I NGS AS WE LL . WE HAVE, HOWEVER, HELD THAT EVEN IF THE TPO LACKED INHERENT JURISDICTION UNDER SECTION 92CA(2A) AND (28) ON THE GROUNDS URGED UNDER THE FIRST SUBMISSION, IT WOULD NOT AFFECT THE FURTHER ASSESSMENT PROCEEDINGS. THUS, EVEN IF WE HAD COME TO THE CONCLUSIO N THAT THE TPO LACKED INHERENT JURISDICTION ON THIS GROUND, WE WOULD NOT HAVE ENTERTAINED THIS WRIT PETITION FOR THE FURTHER PROCEEDINGS BEFORE THE DRP OR THE CIT (APPEALS), AS THE CASE MAY BE, AND THEREAFTER BEFORE THE ITAT, WOULD REMAIN UNAFFECTED BY THE SAME. THESE AUTHORITIES WOULD BE ENTITLED TO SET RIGHT THE DEFECT AND CONCLUDE THE ASSESSMENT PROCEEDINGS ACCORDINGLY. THE TPO'S LACK OF JURISDICTION WOULD NOT ENDER THE FURTHER ASSESSMENT PROCEEDINGS VOID. I N THI S V I EW OF THE MATTER, AT LEAST AFTER THE TPO HAS PASSED HIS ORDER A N D ABSENT ANY EXCEPT I ONA L C I RCUMSTANCES, THERE I S NO WAR R ANT FO R PERM IT T I NG AN ASSESSEE TO I NVOKE THE WRIT J UR I SD I CT I ON O N THE BAS I S T H AT A T PO HAS WRONG L Y ASSUMED J UR I SD I CTION UNDER SECTION 92CA(2A) O R ( 2B ) TO COMPUTE THE ARM'S LENGTH PRICE OF AN I NTERNATIONAL TRANSACT I ON . THE MOST IMPORTANT FACTOR IS THAT EVEN IF THE DRP COMES TO THE CONCLUSION THAT THE TPO HAD WRONGLY EXERCISED JURISDICTION IT WOULD MAKE NO DIFFERENCE. THE DRP WOULD THEN HAVE TO TREAT THE TRANSACTION AS A DOMES TIC TRANSACTION AND ISSUE APPROPRIATE DIRECTIONS ACCORDINGLY. IN OTHER WORDS, THE P ROCEEDINGS DO NOT COME TO AN END. THE DRP CANNOT MERELY SET ASIDE THE ENTIRE DRAFT ASSESSMENT ORDER, CLOSE THE ASSESSMENT PROCEEDINGS AND DIRECT THE AO TO PROCEED AFRESH. TH I S W OU L D BE SO I RRESPECT I VE OF WH ET H ER THE TPO EXERC I SED J U RI SD I CT I ON ON A REFERENCE UNDER SEC TI O N 92CA(1) OR SUO MOTO UNDER SUB - SECTIONS (2A) AND (2B) OF SECTION 92CA. THE DRP DERIVES JURISDICTION UNDER SECTION 144 - C NOT ON ACCOUNT OF WHETHER THERE IS AN INTERNATIONAL TRANSACTION OR NOT, NOT MERELY ON ACCOUNT OF THE TPO HAVING CORRECTLY CONSIDERED A TRANSACTION TO BE AN INTERNATIONAL TRANSACTION OR NOT, BUT ON ACCOUNT OF THE INTERVENTION OF THE TPO EITHER ON A REFERENCE UNDER SECTION 92CA(1) OR SUO MOTO UN DER SUB - SECTION (2A) AND/OR (2B) THEREOF . 105. IF ON THE OTHER HAND A TPO WRONGLY ASSUMES JURISDICTION ALTHOUGH HE LACKS INHERENT JURISDICTION, A COURT MAY WELL INVOKE ITS WRIT JURISDICTION IF THE ASSESSEE APPROACHES IT AT THE SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 23 EARLIEST AND IN ANY EVENT BE FORE THE TPO MAKES THE REPORT. THIS WOULD ONLY BE TO SAVE THE ASSESSEE AND THE REVENUE INCURRING UNNECESSARY EXPENSES AND A WASTE OF TIME ON ACCOUNT OF THE PROCEEDINGS BEFORE THE TPO WHICH ARE DEMONSTRABLY WITHOUT JURISDICTION. 106. THE POSITION, HOWEVER, WOULD BE ENTIRELY DIFFERENT ONCE THE TPO PASSES THE ORDER. THIS IS FOR THE REASON THAT THE DRP, IN ANY EVENT, WOULD HAVE THE JURISDICTION TO RECTIFY THE ERROR AND ISSUE THE NECESSARY DIRECTIONS TO THE AO TO COMPLETE THE ASSESSME NT IN ACCORDANCE WITH LAW. THE ASSESSMENT PROCEEDINGS ARE NOT RENDERED FUTILE OR VOID ON ACCOUNT OF THE TPO LACKING INHERENT JURISDICTION. IN SUCH CASES, WHERE THE PROCEEDINGS BEFORE THE TPO HAVE CONCLUDED, ABSENT ANYTHING ELSE WARRANTING THE INVOCATION OF THE WRIT JURISDICTION, A WRIT PETITION OUGHT NOT TO BE ENTERTAINED AND THE PARTIES MUST BE RELEGATED TO THEIR REMEDIES UNDER THE ACT . THUS, THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT THE TPOS LACK OF JURISDICTION TO PROCEED WITH THE ISSUE WHICH WERE NOT IN THE REALM OF INTERNATIONAL TRANSACTION AS PER OBJECTIONS OF THE ASSESSEE, WOULD NOT RENDER THE ENTIRE PROCEEDINGS AS VOID. 18 . THUS, WE SET ASIDE THE FINAL ASSESSMENT ORDER AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE DRP I.E., TO THE STA GE OF FILING OF OBJECTIONS BY THE ASSESSEE BEFORE THE DRP. THE DRP WILL CONSIDER THE ENTIRE OBJECT ION S AS WELL AS THE EVIDENCE S FILED BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION AND THEN GIVE CLEAR DIRECTION TO THE ASSESSING OFFICER IN ACCORDANCE WITH THE PROVISIONS OF LAW AND AFTER GIVING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, WE ACCEPT THE PRELIMINARY OBJECTION OF THE LEARNED COUNSEL PARTLY AND WITHOUT GOING INTO THE MERITS OF THE OTHER GROUNDS RAISED BEFORE US, WE REMAND SWIBER OFFSHORE CONSTRUCTION PTE. LTD. 24 THE MAT TER BACK TO THE FILE OF THE DRP. ACCORDINGLY, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 19 . 1 9 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6 TH AUGUST 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST 2014 SD/ - . . B.R. BASKARAN ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 6 TH AUGUST 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI