DCIT, CIrcle- 24(2), New Delhi V. Sumitomo Corporation India Pvt. Ltd., New Delhi

ITA 7733/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4695 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2003-2004
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M BARNWAL
• Keywords: Transfer pricing; Opportunity of being heard; International transaction; Set aside
• Section: 143(3); 144C; 113; 13; 153; 63

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI I-2 B ENCH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 7733/DEL/2017 [A.Y 2003-04] THE DY. C.I.T. VS. M/S SUMITOMO CORPORATION IND IA CIRCLE - 24 (2) 302 & 303, 3 RD FLOOR, WORLD MARK 2 NEW DELHI ASSET NO. 8, AEROCITY HOSPITALITY D ISTRICT, NEW DELHI PAN : AABCS 1887 M [APPELLANT] [RESPONDENT] DATE OF HEARING : 28.09.2021 DATE OF PRONOUNCEMENT : 28.09.2021 ASSESSEE BY : SHRI HIMANSHU S. SDIN HA, ADV. SHRI BHUWAN DHAROPAR, ADV REVENUE BY : SHRI M. BARNWAL, SR. D R ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) 44, NEW DELHI DATED 30.10.2017 PERTAI NING TO A.Y. 2003-04 2 2. THE GRIEVANCES OF THE REVENUE READ AS UNDER: 1. ' WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THA T THE ORDER PASSED BY THE AO ON 28.09.2016 IN PURSUANCE O F THE DIRECTIONS OF ITAT WHEREIN THE ISSUE OF TP WAS SET ASIDE TO THE AO/TPO WITH A SPECIFIC DIRECTION, WAS WITHOUT JURIS DICTION ON THE GROUND THAT NO DRAFT ORDER WAS ISSUED TO THE ASSESS EE U/S 144C BY IGNORING THE FACT THAT THE WHOLE ASSESSMENT ORDER W AS NOT SET ASIDE BY THE ITAT TO THE FILE AO/TPO 2. THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE IS SUE ON MERIT. 3. THE REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH, THE CASE RECORDS CAREFULLY PERUSED AND WITH THE ASSISTA NCE OF THE LD. COUNSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENC ES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 1 8(6) OF ITAT RULES. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT I N THE FIRST ROUND OF LITIGATION, THE QUARREL TRAVELLED UPTO THE TRIBUNAL AND THE TRIBUNAL, INTER ALIA, CONSIDERED THE QUARREL AGAINST THE INCL USION OF THE CASE OF SAMRAT CLEARING IN THE LIST OF COMPARABLES. 3 5. WHILE RESTORING THE ISSUE TO THE FILE OF THE TPO /ASSESSING OFFICER, THE TRIBUNAL IN ITA NO. 2307/DEL/2006 & 6719/DEL/20 13 HELD AS UNDER: 7.3 COMING TO THE MERITS OF THE EXCLUSION OR OTHER WISE OF THIS CASE, WE FIND THAT THERE IS NO DISCUSSION IN THE OR DER OF THE TPO ABOUT THE COMPARABILITY OR OTHERWISE OF THIS CASE W ITH THE ASSESSEE. IN OUR CONSIDERED OPINION, THE ENDS OF JU STICE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER IS SET ASIDE TO TH IS EXTENT AND MATTER IS RESTORED TO THE TPO/AO FOR FIRST DECIDING THE COMPARABILITY OR OTHERWISE OF SAMRAT CLEARING WITH THE ASSESSEE AND THEN ACCORDINGLY RECOMPUTING THE ALP OF THIS SE T OF INTERNATIONAL TRANSACTIONS. NEEDLESS TO SAY, THE AS SESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF BEING HEARD IN SUCH PROCEEDINGS. 6. PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL, VIDE ORDER DATED 28.09.2016, THE ASSESSING OFFICER FRAMED ASSESSMENT ORDER U/S 254/143(3) R.W.S 144C OF THE INCOME TAX ACT, 1961 [ HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. 7. QUARREL IS THIS ASSESSMENT ORDER FRAMED BY THE A SSESSING OFFICER WITHOUT PASSING A DRAFT ASSESSMENT ORDER WHICH IS A MANDATORY REQUIREMENT IN TERMS OF SECTION 144C OF THE ACT. T HIS ISSUE IS WELL 4 SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF JCB INDIA LTD 398 ITR 189. THE RELEVANT FINDINGS OF THE HON'BLE JURISDICTIONAL HIGH COURT READ AS UNDER: 16. IN RESPONSE, MR. SANJAY JAIN, LEARNED ADDITION AL SOLICITOR GENERAL OF INDIA APPEARING FOR THE REVENUE, SUBMITT ED THAT THERE WAS AN EFFICACIOUS ALTERNATIVE REMEDY AVAILABLE TO THE PETITIONER TO FILE APPEALS AGAINST THE IMPUGNED FINAL ASSESSMENT ORDERS PASSED BY THE AO. IT IS DENIED THAT IT WAS MANDATORY ON TH E PART OF THE AO TO PASS A DRAFT ASSESSMENT ORDER SINCE THIS WAS A SECOND ROUND BEFORE THE TPO PURSUANT TO REMAND BY THE ITAT. MORE OVER, IT WAS NOT AS IF THE ITAT HAD SET ASIDE THE ENTIRE ASSESSM ENT ORDER OF THE AO. THE SETTING ASIDE WAS ONLY IN RESPECT OF TH E TRANSFER PRICING ADJUSTMENT AND THAT TOO WITH A SPECIFIC DIR ECTION TO THE AO FOR DETERMINING THE ARMS LENGTH PRICE 'AFTER CONSID ERING FRESH COMPARABLES.' SINCE THE ASSESSMENT ITSELF WAS NOT C ANCELLED BY THE ITAT OR COMPLETELY SET ASIDE, IT IS THE PROVISIONS OF SECTION 153 (3) (II) OF THE ACT WHICH WOULD APPLY. MR JAIN SUB MITTED THAT THE REQUIREMENT OF PASSING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C WAS ONLY IN THE FIRST INSTANCE AND NOT AFTER THE R EMAND BY THE ITAT. 17. THE COURT IS UNABLE TO AGREE WITH THE SUBMISSIO NS MADE ON BEHALF OF THE REVENUE BY MR. JAIN. SECTION 144C (1) OF THE ACT IS UNAMBIGUOUS. IT REQUIRES THE AO TO PASS A DRAFT ASS ESSMENT ORDER AFTER RECEIPT OF THE REPORT FROM THE TPO. THERE IS NOTHING IN THE 5 WORDING OF SECTION 144C (1) WHICH WOULD INDICATE THAT THIS REQUIREMENT OF PASSING A DRAFT ASSESSMENT ORDER DOE S NOT ARISE WHERE THE EXERCISE HAD BEEN UNDERTAKEN BY THE TPO O N REMAND TO IT, OF THE SAID ISSUE, BY THE ITAT. 18. IT WAS THEN CONTENDED BY MR. JAIN THAT THE ASSE SSMENT ORDER PASSED BY THE AO SHOULD NOT BE DECLARED TO BE INVAL ID BECAUSE OF THE FAILURE TO FIRST PASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C OF THE ACT. IN THIS REGARD, REFERENCE IS MADE TO SECTION 292B OF THE ACT. 19. AS ALREADY NOTED, THE FINAL ASSESSMENT ORDER OF THE AO STOOD VITIATED NOT ON ACCOUNT OF MERE IRREGULARITY BUT SI NCE IT WAS AN INCURABLE ILLEGALITY. SECTION 292B OF THE ACT WOULD NOT PROTECT SUCH AN ORDER. THIS HAS BEEN EXPLAINED BY THIS COURT IN ITS DECISION DATED 17TH JULY 2015 PASSED IN ITA NO. 275/2015 (PR . COMMISSIONER OF INCOME TAX, DELHI-2, NEW DELHI V. C ITI FINANCIAL CONSUMER FINANCE INDIA PVT. LTD.) WHERE IT WAS HELD : 'SECTION 292B OF THE ACT CANNOT BE READ TO CONFER JURISDICTION ON THE AO WHERE NONE EXISTS. THE SAID SECTION ONLY PROTECTS RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS FROM ANY MISTA KE IN SUCH RETURN OF INCOME, ASSESSMENT NOTICES, SUMMO NS OR OTHER PROCEEDINGS, PROVIDED THE SAME ARE IN SUBS TANCE AND IN EFFECT IN CONFORMITY WITH THE INTENT OF PURP OSES OF THE ACT.' 6 20. THE COURT FURTHER OBSERVED THAT SECTION 292B OF THE ACT CANNOT SAVE AN ORDER NOT PASSED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. AS THE COURT EXPLAINED, 'THE ISSUE INVO LVED IS NOT ABOUT A MISTAKE IN THE SAID ORDER BUT THE POWER OF THE AO TO PASS THE ORDER.' 21. IN ALMOST IDENTICAL FACTS, IN TURNER INTERNATIO NAL (SUPRA), THIS COURT HELD IN FAVOUR OF THE ASSESSEE ON THE GROUND THAT IT WAS MANDATORY FOR THE AO TO HAVE PASSED A DRAFT ASSESSM ENT ORDER UNDER SECTION 144C OF THE ACT PRIOR TO ISSUING THE FINAL ASSESSMENT ORDER. THE FOLLOWING PASSAGES FROM SAID DECISION AR E RELEVANT FOR THE PRESENT PURPOSES: '11. THE QUESTION WHETHER THE FINAL ASSESSMENT ORDE R STANDS VITIATED FOR FAILURE TO ADHERE TO THE MANDAT ORY REQUIREMENTS OF FIRST PASSING DRAFT ASSESSMENT ORDE R IN TERMS OF SECTION 144C(1) OF THE ACT IS NO LONGER RE S INTREGRA. THERE IS A LONG SERIES OF DECISIONS TO WH ICH REFERENCE WOULD BE MADE PRESENTLY. 12. IN ZUARI CEMENT LTD. V. ACIT (DECISION DATED 21ST FEBRUARY, 2013 IN WP(C) NO.5557/2012), THE DIVISION BENCH (DB) OF THE ANDHRA PRADESH HIGH COURT CATEGORICALLY HELD THAT THE FAILURE TO PASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1) OF THE ACT WOULD RESULT IN RENDERING THE FINAL ASSESSMENT ORDE R 'WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEA BLE.' IN 7 THAT CASE, THE CONSEQUENT DEMAND NOTICE WAS ALSO SE T ASIDE. THE DECISION OF THE ANDHRA PRADESH HIGH COUR T WAS AFFIRMED BY THE SUPREME COURT BY THE DISMISSAL OF THE REVENUE'S SLP (C) [CC NO. 16694/2013] ON 27TH SEPTEMBER, 2013. 13. IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL [2014] 369 ITR 113 (MAD.), A SIMILAR QUESTION AROSE. THERE, THE REVENUE SOUGHT TO RECTIFY A MISTA KE BY ISSUING A CORRIGENDUM AFTER THE FINAL ASSESSMENT OR DER WAS PASSED. CONSEQUENTLY, NOT ONLY THE FINAL ASSESS MENT ORDER BUT ALSO THE CORRIGENDUM ISSUED THEREAFTER WA S CHALLENGED. FOLLOWING THE DECISION OF THE ANDHRA PR ADESH HIGH COURT IN ZUARI CEMENT LTD. V. ACIT (SUPRA) AND A NUMBER OF OTHER DECISIONS, THE MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL (SUPRA) QUASHED THE FINAL ORDER OF THE AO AND THE DEMAND NOTICE. INTERESTINGLY, EVEN AS REGARDS THE CORRIGENDUM ISSUED, THE MADRAS HIGH COURT HELD THAT IT WAS BEYOND THE TIME PERMISSIBLE FOR ISSUANCE OF SUC H CORRIGENDUM AND, THEREFORE, IT COULD NOT BE SUSTAIN ED IN LAW. 14. RECENTLY, THIS COURT IN ESPN STAR SPORTS MAURITIUS S.N.C. ET COMPAGNIE V. UNION OF INDIA [2016] 388 ITR 383 (DEL.), FOLLOWING THE DECISION OF THE ANDHRA PR ADESH HIGH COURT IN ZUARI CEMENT LTD. V. ACIT (SUPRA), THE 8 MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL, CHENNAI (SUPRA) AS WELL AS THE BOMBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT ASSOCIATI ON V. DCIT (2016) 290 CTR (BOM) 46, CAME TO THE SAME CONCLUSION.' 22. IN THE DECISION OF THE GUJARAT HIGH COURT IN C- SAM (INDIA) (SUPRA), THE COURT NEGATED THE PLEA THAT NON-COMPLI ANCE WITH THE TERMS OF SECTION 144C OF THE ACT IS MERELY AN 'IRREGULARITY'. THE GUJARAT HIGH COURT HELD THAT IT WAS OF 'GREAT IMPOR TANCE AND MANDATORY'. THE FOLLOWING PASSAGES OF THE SAID DECI SION OF GUJARAT HIGH COURT ARE RELEVANT FOR THE PRESENT PURPOSES: '6. THESE STATUTORY PROVISIONS MAKE IT ABUNDANTLY C LEAR THAT THE PROCEDURE LAID DOWN UNDER SECTION 144C OF THE ACT IS OF GREAT IMPORTANCE AND IS MANDATORY. BEFORE THE ASSESSING OFFICER CAN MAKE VARIATIONS IN THE RETURN ED INCOME OF AN ELIGIBLE ASSESSEE, AS NOTED, SUB-SECTI ON (1) OF SECTION 144C LAYS DOWN THE PROCEDURE TO BE FOLLO WED NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE ACT. THIS NON-OBSTANTE CLAUSE THUS GIVES AN OVERRIDING EFFECT TO THE PROCEDURE 'NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE ACT'. SUB - SECTION (5) OF SECTION 144C EMPOWERS THE DRP TO ISS UE DIRECTIONS TO THE ASSESSING OFFICER TO ENABLE HIM T O COMPLETE THE ASSESSMENT. SUB-SECTION (10) OF SECTIO N 144C MAKES, SUCH DIRECTIONS BINDING ON THE ASSESSIN G OFFICER. AS PER SUB-SECTION 144C, THE ASSESSING OFFICER IS REQUIRED TO PASS THE ORDER OF ASSESSMENT IN 9 TERMS OF SUCH DIRECTIONS WITHOUT ANY FURTHER HEARIN G BEING GRANTED TO THE ASSESSEE. 7. THE PROCEDURE LAID DOWN UNDER SECTION 144C OF TH E ACT IS THUS OF GREAT IMPORTANCE. WHEN AN ASSESSING OFFICER PROPOSES TO MAKE VARIATIONS TO THE RETURNED INCOME DECLARED BY AN ELIGIBLE ASSESSES HE HAS TO F IRST PASS A DRAFT ORDER, PROVIDE A COPY THEREOF TO THE ASSESSEE AND ONLY THEREUPON THE ASSESSEE COULD EXER CISE HIS VALUABLE RIGHT TO RAISE OBJECTIONS BEFORE THE D RP ON ANY OF THE PROPOSED VARIATIONS. IN ADDITION TO GIVI NG SUCH OPPORTUNITY TO AN ASSESSEE, DECISION OF THE DRP IS MADE BINDING ON THE ASSESSING OFFICER. IT IS THEREFORE N OT POSSIBLE TO UPHOLD THE REVENUE'S CONTENTION THAT SU CH REQUIREMENT IS MERELY A PROCEDURAL. THE REQUIREMENT IS MANDATORY AND GIVES SUBSTANTIVE RIGHTS TO THE ASSES SEE TO OBJECT TO ANY ADDITIONS BEFORE THEY ARE MADE AND SUCH OBJECTIONS HAVE TO BE CONSIDERED NOT BY THE ASSESSING OFFICER BUT BY THE DRP. INTERESTINGLY, ON CE THE DRP GIVES DIRECTIONS UNDER SUB-SECTION (5) OF SECTION 144C, THE ASSESSING OFFICER IS EXPECTED TO PASS THE ORDER OF ASSESSMENT IN TERMS OF SUCH DIRECTIONS WITHOUT GIVING ANY FURTHER HEARING TO THE ASSESSEE. THUS, AT THE LEVEL OF THE ASSESSING OFFICER, THE DIRECTIO NS OF THE DRP UNDER SUB-SECTION (5) OF SECTION 144C WOULD BIND EVEN THE ASSESSEE. HE MAY OF COURSE CHALLENGE THE ORDER OF THE ASSESSING OFFICER BEFORE THE TRIBUNAL AND TAKE UP ALL CONTENTIONS. NEVERTHELESS AT THE STAGE OF 10 ASSESSMENT, HE HAS NO REMEDY AGAINST THE DIRECTIONS ISSUED BY THE DRP UNDER SUB-SECTION (5). ALL THESE PROVISIONS AMPLY DEMONSTRATE THAT THE LEGISLATURE DESIRED TO GIVE AN IMPORTANT OPPORTUNITY TO AN ASSE SSEE WHO IS LIKELY TO BE SUBJECTED TO UPWARD REVISION OF INCOME ON THE BASIS OF, TRANSFER PRICING MECHANISM. SUCH OPPORTUNITY CANNOT BE TAKEN AWAY BY TREATING IT AS PURELY PROCEDURAL IN NATURE.' 23. IN THE PRESENT CASE, JUST AS IN TURNER INTERNAT IONAL (SUPRA), IT IS SUBMITTED THAT, AT THE MOST, FAILURE TO PASS A D RAFT ASSESSMENT ORDER UNDER SECTION 144C OF THE ACT IS A CURABLE DEFECT AND THAT THE COURT SHOULD NOW DELEGATE THE PARTIES TO A STAG E AS IT WAS WHEN THE TPO ISSUED A FRESH ORDER AFTER THE REMAND BY TH E ITAT. 24. THIS VERY ARGUMENT OF THE REVENUE HAS BEEN NEGA TED BY THE COURT IN TURNER INTERNATIONAL (SUPRA) WHERE IT WAS OBSERVED IN PARAS 15 AND 16 AS UNDER: '15. MR. DILEEP SHIVPURI, LEARNED COUNSEL FOR THE R EVENUE SOUGHT TO CONTEND THAT THE FAILURE TO ADHERE TO THE MANDATORY REQUIREMENT OF ISSUING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1) OF THE ACT WOULD, AT B EST, BE A CURABLE DEFECT. ACCORDING TO HIM THE MATTER MU ST BE RESTORED TO THE AO TO PASS A DRAFT ASSESSMENT OR DER AND FOR THE PETITIONER, THEREAFTER, TO PURSUE THE M ATTER BEFORE THE DRP. 11 16. THE COURT IS UNABLE TO ACCEPT THE ABOVE SUBMISS ION. THE LEGAL POSITION AS EXPLAINED IN THE ABOVE DECISI ONS IN UNAMBIGUOUS. THE FAILURE BY THE AO TO ADHERE TO THE MANDATORY REQUIREMENT OF SECTION 144C (1) OF THE AC T AND FIRST PASS A DRAFT ASSESSMENT ORDER WOULD RESUL T IN INVALIDATION OF THE FINAL ASSESSMENT ORDER AND THE CONSEQUENT DEMAND NOTICES AND PENALTY PROCEEDINGS.' 25. FOR ALL OF THE AFOREMENTIONED REASONS, THE COUR T FINDS NO DIFFICULTY IN HOLDING THAT THE IMPUGNED FINAL ASSES SMENT ORDERS DATED 30TH MARCH 2016 PASSED BY THE AO FOR AYS 2006 -07, 2007- 08 AND 2008 -09 ARE WITHOUT JURISDICTION ON ACCOUNT OF THE FAILURE, BY THE AO, TO FIRST PASS A DRAFT ASSESSMENT ORDER A ND THEREAFTER, SUBJECT TO THE OBJECTIONS FILED BEFORE THE DRP AND THE ORDERS OF THE DRP, TO PASS THE FINAL ASSESSMENT ORDER. THE CO URT ALSO SETS ASIDE THE ORDERS OF THE TPO DATED 30TH MARCH 2016 I SSUED PURSUANT TO THE REMAND BY THE ITAT. 8. SIMILAR VIEW WAS TAKEN BY THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF DIMENSION DATA ASIA PACIFIC PTE LTD 257 TAXMAN 442. THE RELEVANT FINDINGS READ AS UNDER: 8. THE CONTENTION OF THE REVENUE THAT THE REQUIREM ENT OF PASSING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C OF THE ACT WOULD ONLY EXTEND TO THE ORDERS PASSED IN THE FIRST ROUND OF PROCEEDINGS OR IN RESPECT OF AN ORDER PASSED BY THE ASSESSING O FFICER IN 12 REMAND PROCEEDINGS BY THE TRIBUNAL WHICH HAS ENTIRE LY SET ASIDE THE ORIGINAL ASSESSMENT ORDER. THIS DISTINCTION WHI CH IS SOUGHT TO BE DRAWN BY THE REVENUE IS NOT BORNE OUT BY SECTION 144C OF THE ACT. IN FACT, THE DELHI HIGH COURT IN JCB (INDIA) L TD. ITA NO S . 1 63 5 & 1 63 6 / MU M/ 2 01 7 (SUPRA) H ELD THAT, EVEN IN PARTIAL REMAND PROCEEDINGS FROM THE TRIBUNAL, THE A SSESSING OFFICER IS OBLIGED TO PASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C(1) OF THE ACT. ACCORDING TO US, THE ASSESSING OFFICER , IS OBLIGED TO, IN TERMS OF SECTION 144C OF THE ACT TO PASS A DRAFT ASSESSMENT ORDER IN ALL CASES WHERE HE PROPOSES TO ASSESS THE FOREIGN COMPANY UNDER THE ACT BY MAKING A VARIATION IN THE RETURNED INCOME. IN THIS CASE, THE IMPUGNED ORDER D ATED 31ST JANUARY, 2018 HAS BEEN PASSED IN TERMS OF SECTION 143(3) READ WITH SECTION 144C READ WITH SECTION 254 OF THE ACT AND IT CERTAINLY MAKES A VARIATION TO THE RETURNED INCOME FILED BY THE PETITIONER. THIS EVEN IF, ONE PROCEEDS ON THE BASIS THAT THE RETURNED INCOME STANDS VARIED BY THE ORDER OF THE T RIBUNAL IN THE FIRST ROUND, TO THE EXTENT THE PETITIONER ACCEPTS I T. THEREFORE, THE ASSESSING OFFICER CORRECTLY INVOKES SECTION 144C OF THE ACT IN THE IMPUGNED ORDER. ONCE HAVING INVOKED SECTION 144C OF THE ACT, THE ASSESSING OFFICER IS OBLIGED TO COMPLY WITH IT IN F ULL AND NOT PARTLY. THIS IMPUGNED ORDER WAS PASSED CONSEQUENT TO THE OR DER OF THE TRIBUNAL DATED 5TH MAY, 2017 RESTORING SOME OF THE ISSUES BEFORE IT TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 13 9. THIS 'FRESH ADJUDICATION' ITSELF WOULD IMPLY THA T IT WOULD BE AN ORDER WHICH WOULD DECIDE THE LIS BETWEEN THE PARTIE S, MAY NOT BE ENTIRE LIS, BUT THE DISPUTE WHICH HAS BEEN RESTORED TO THE ASSESSING OFFICER. ACCORDING TO US, THE ORDER DATED 31ST JANUARY, 2018 IS NOT AN ORDER MERELY GIVING AN EFFECT TO THE ORDER OF THE TRIBUNAL, BUT IT IS AN ITA NO S . 1 63 5 & 1 63 6 / MU M/ 2 01 7 ASSESSMENT ORDER WHICH HAS INVOKED SECTION 143(3) OF THE ACT AND ALSO SECTION 144C OF THE ACT. THIS INVOCATION OF SECTION 144C OF THE ACT HAS TAKEN PLACE AS THE ASSESSING OFFICER IS OF THE VIEW THAT IT APPLIES, THEN THE REQUIREMENT OF SECTION 144C(1) OF THE ACT HAS TO BE COMPLIED WITH BEFORE HE CAN PASS THE IMPU GNED ORDER INVOKING SECTION 144C(13) OF THE ACT. IN FACT, SECTION 144C(13) OF THE ACT CAN ONLY BE INVOKED IN CASES WHERE THE ASSE SSEE HAS APPROACHED THE DRP IN TERMS OF SUB- SECTION 144(C)(2)(B) OF THE ACT AND THE DRP GIVES DIRECTION IN TERMS OF SECTION 144C(5) OF THE ACT. IN THIS CASE, THE ASSESSMENT ORDER HAS INVOKED SECTION 144C(13) OF THE ACT WITHOUT HAVING PASSED THE NECESSARY DRA FT ASSESSMENT ORDER UNDER SECTION 144C(1) OF THE ACT, WHICH ALONE WOULD MAKE AN DIRECTION UNDER SECTION 144C(5) OF THE ACT BY THE DRP POSSIBLE. THUS, THE IMPUGNED ORDER IS COMPLETEL Y WITHOUT JURISDICTION. 10. MOREOVER, SO FAR AS A FOREIGN COMPANY IS CONCER NED, THE PARLIAMENT HAS PROVIDED A SPECIAL PROCEDURE FOR ITS ASSESSMENT AND APPEAL IN CASES WHERE THE ASSESSING OFFICER DOES NO T ACCEPT THE RETURNED INCOME. IN THIS CASE, IN THE WORKING OUT O F THE ORDER DATED 5TH MAY, 2017 OF THE TRIBUNAL RESULTS IN THE RETURNED 14 INCOME BEING VARIED, THEN THE PROCEDURE OF PASSING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C(1) OF THE ACT IS MANDATORY AND HAS TO BE COMPLIED WITH, WHICH HAS NOT BEEN DON E. 11. IN THE ABOVE VIEW, THE IMPUGNED ORDER IS WITHOU T JURISDICTION. THUS, THE PLEA OF ALTERNATE REMEDY ITA NO S . 1 63 5 & 1 63 6 / MU M/ 2 01 7 ADVANCED BY THE REVENUE SO AS TO NOT ENTE RTAIN THIS PETITION, DOES NOT MERIT ACCEPTANCE IN THE PRESENT FACTS. 12. IN THE ABOVE VIEW, THE IMPUGNED ORDER DATED 31S T JANUARY, 2018 HAS BEEN PASSED WITHOUT COMPLYING WITH THE MAN DATORY REQUIREMENTS OF SECTION 144C OF THE ACT WHICH IS APPLICABLE TO A FOREIGN COMPANY SUCH AS THE PETITIONER. THEREFORE, THE IMPUGNED ORDER IS QUASHED AND SET ASIDE. NEEDLESS TO STATE, THIS ORDER WOULD NOT, IN ANY WAY , STOP THE REVENUE FROM TAKING SUCH STEPS AS ARE AVAILABLE TO IT IN LAW AND THE PETITIONER ALSO FROM CONTESTING THE ACTION OF THE R EVENUE IN ACCORDANCE WITH LAW, IF IT SO DESIRES.' 9. THE LD. DR RELIED UPON TWO DECISIONS OF THE HON' BLE HIGH COURT OF DELHI, NAMELY, BSC C&C JOINT VENTURE WCC 7623 OF 20 17 AND CM 31553 OF 2017 AND STRYCAR PVT LTD 103 TAXMAN 267. IN SO FAR AS THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF B SC-C&C [SUPRA] IS CONCERNED, THE HON'BLE HIGH COURT HAS DECIDED ON TH E CONSENT OF BOTH PARTIES. THEREFORE, THE SAME IS NOT APPLICABLE ON THE FACTS OF THE CASE 15 IN HAND AND THE DECISION IN THE CASE OF STRYCAR PVT LTD [SUPRA] IS, IN FACT, IN FAVOUR OF THE ASSESSEE, THEREFORE, WOULD D O NO GOOD TO THE REVENUE. 10. SINCE THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JCB INDIA LTD [SUPRA], WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). 11. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 7733/DEL/2017 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.09. 2021. SD/- SD/- [LALIET KUMAR] [N.K. BIL LAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH SEPTEMBER, 2021 VL/ 16 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE DATE ON WHICH THE APPROVED DRAFT COMES TO THE DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DATE ON WHICH THE FAIR ORDER COMES BACK TO THE DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT DATE OF DISPATCH OF THE ORDER