ACIT, New Delhi V. M/s. Wolfensohn India Advisors Pvt. Ltd., New Delhi

MA 602/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4531 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-05-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I2
• Assessment Year: 2011-2012
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 147; 6; 143(3); 153A; 250; 144C; 264; 13; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘I-2’: NEW DELHI (Through Video Conferencing) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER MA No.602/DEL/2019 (Arising out of ITA No.705/DEL/2016) [Assessment Year: 2011-12] ACIT, Circle-27(2), New Delhi Wolfensohn India Advisors Pvt. Ltd. 10 th Floor, RHS Taj Mahal Hotel, Number One Mansingh Road, New Delhi PAN-AAACW7876K Revenue Assessee Revenue by Sh. K. M. Gupta, Adv. & Sh. Rohit Tiwari, Adv. Assessee by Sh.Vivek Vardhan DR Date of Hearing 29.04.2022 Date of Pronouncement 04.05.2022 ORDER PER R.K. PANDA, AM, The Revenue, through this Miscellaneous Application, has requested the Tribunal to rectify certain mistakes that have crept in the order of the Tribunal. 2. The Ld. DR referring to the contents of the Miscellaneous Application drew the attention of the Bench to the same which read as under:- “Sub:- Filing of Miscellaneous application u/s.254(2) of the 2 MA No.602/Del/2019 Income Tax Act,1961 in the case of M/s Wolfensohn India Advisors Pvt. Ltd. [PAN- AAACW7876K] for A.Y.2011-12, against the order dated 06.12.2018 padded in ITA No.705/Del/2016. reg. Kindly refer to the above. In this regard, it is submitted that the Hon hie ITAT has restored the matter back to the DRP stating that “We find the order of the DRP is very cryptic and they have not considered the various issues raised by the TPO while excluding the above two companies as comparables. The Id. DRP has not passed a speaking order while excluding the above two companies from the list of comparables as adopted by the TPO. We, therefore, deem it proper to restore the issue to the file of the DRP with a direction to pass a speaking order on the issue of selection of the above two comparables as per fact and law”. 2. With regard to the "assessment order" set aside directly to the DRP by the Hon'ble ITAT, the legal position as per the Income Tax Act 1961 (the Act hereinafter) and the Income Tax (Dispute Resolution Panel) Rules 2009 (the Rules hereinafter) is as under: (i) As per sub-section (2) of s. 144(C) of the Act an ’eligible assessee’ may file ’Objection’ before the Dispute Resolution Panel (DRP hereinafter) against the ’draft assessment order’ passed by the assessing officer (AO hereinafter); (ii) Accordingly the DRP jurisdiction only in a case where a draft assessment order is issued in the case of an eligible assessee; As per sub-section (5) of s. 144(C) of the Act the DRP, on receipt of such ’Objection’, is required to issue ’Directions’ for the "guidance of the AO". (iii) As per sub-section (13) of s. 144(C) of the Act the AO is mandated to complete the assessment in accordance with the DRP’s directions; (iv) As per clause (d) of s. 253 of the Act only an assessment order passed by an assessing officer under sub-section (3) of s. 143 or s. 147 ors. 153A or s. 153C in pursuance to the directions of the DRP (or an order passed u/s 154 in respect of such order) is appealable to the Appellate Tribunal; (v) as per sub-section (2A) of s. 153 of the Act (as existing prior to the amendment by the Finance Act 2016), in pursuance of an order u/s 250 or 254 or 263 or 264 of the Act setting aside or cancelling an assessment, an order of 'fresh' assessment is to be made before the expiry 3 MA No.602/Del/2019 of one year from the end of the financial year in which the order u/s 250 or 254 or 263 or 264 of the Act is received by the Pr. CIT/CIT/Pr. CCIT/CCIT; 3. Thus, the DRP is empowered by the Act to issue Directions only when an 'Objection' filed by the assessee against a draft assessment order passed by the AO, or a draft assessment order passed during fresh assessment proceedings, u/s 144C(1) of the Act. Further, while the Directions of the DRP are not appealable u/s 253 of the Act, as long as the 'assessment order' is not set aside or cancelled and restored to the file of the AO by the Hon'ble ITAT and a 'fresh draft' assessment order is not framed u/s 144C(1) of the Act, and consequent thereto an 'Objection' is not filed u/s 144C(2)(b)(i) of the Act, the DRP does not have jurisdiction to issue any Direction u/s 144C(5) of the Act. 4. Furthermore, even no limitation for issuing Directions by the DRP has been laid down in terms of the provisions of s. 153(2A) of the Act in a situation where the Hon'ble ITAT set aside an assessment order directly to the file of the DRP, which also is suggestive of the legislative intent as elaborated herein above. 5. Thus, there is no provision under the Act whereby the Appellate Tribunal can set aside an assessment order directly to the file of the DRP. 6. Further, the DRP is neither empowered to issue any Direction u/s 144C(5) of the Act in a case set aside by the Hon'ble ITAT directly to the DRP, nor is there any limitation laid down by the Act for issuance of any Direction u/s 144C(5) of the Act in such circumstances. 7. Further, it also needs to be noted that in terms of the provisions of sub-sec. (13) of section 144C of the Act the AO has to pass final assessment order within 30 days from the end of the month in which the Direction of DRP under sub- sec(5) of section 144C of the Act is received by him/her. Such an order can be passed where Objection is filed by the assessee u/s.l44C(2)(b) of the Act, and the limitation is as per sub-sec (13) of section 144C. In a situation where the final assessment order u/s 144C(13) is not set aside to the AO, as in the present cases, and the ITAT sets aside the Direction of the DRP directly to the DRP, while the first assessment order remains to be operative, the Act does not lay any limitation for passing fresh' final assessment order by the AO. 8. Further, in terms of Rule 28 of the Income Tax (Appellate Tribunal) Rules 1963 the Hon'ble Tribunal may remand a 4 MA No.602/Del/2019 case only "to the authority from whose order the appeal has been preferred or to the assessing officer' 9. In view of the above facts and legal position, miscellaneous application is being filled on the following grounds. (a) On the facts and circumstances of the case, the ITAT order dated 06.12.2018 passed in ITA No. 70/Del/2016 in the case of M/s Wolfensohn India Advisors Pvt. Ltd deserves to be recalled and restored in its original position since the setting aside the matter to the DRP for passing a speaking order a fresh is bad in law and invalid in terms of sub section 2, 5, 6 8s 13 of the section 144C of the Income Tax Act, 1961. (b) In terms of Rule 28 of the Income Tax (Appellate tribunal) Rule 1963 the Hon’ble Tribunal may remand a case only to the Authority from whose order the appeal has been preferred or to the assessing officer. 10. Authorization of the Pr.CIT, Delhi-9, New Delhi issued vide letter F.No.Pr.CIT/Delhi-9/Judicial/2019-20/662 dated 26.06.2019 is being enclosed herewith, in original.” 3. Referring to the above, he submitted that the contents of the Miscellaneous Application are self explanatory. He accordingly requested the Bench to pass appropriate order as per law. 4. The ld. Counsel for the assessee, on the other hand, strongly opposed the Miscellaneous Application filed by the Revenue and submitted that the Miscellaneous Application filed by the Revenue has become infructuous in view of the order passed by the DRP after the matter was set-aside to the file of the DRP. Further, the Bangalore Bench of the Tribunal in the case of ITO vs M/s Weg Industries (India) Pvt. Ltd. in M.P. 5 MA No.602/Del/2019 No.52/Bang/2019 has decided an identical issue and has held that the Tribunal may remand the matter to the file of the authority from whose order, the appeal has been preferred. In the said decision, the Tribunal has dismissed the Miscellaneous Petition filed by the Revenue, where, the Tribunal has restored the matter to the file of DRP. He accordingly submitted that legally and factually, the Miscellaneous Application filed by the Revenue should be dismissed. 5. We have heard the rival arguments made by both the sides and perused the record. We find the Revenue through this Miscellaneous Application has requested the Tribunal to rectify the order passed by it on t the ground that the Tribunal has remanded the matter to the file of the DRP for passing a speaking order which is bad in law and invalid in view of the provisions of section 144C of the Act. We find the DRP vide order dated 24.09.2021, after the matter was set-aside by the Tribunal, has passed the order with a direction to the AO to incorporate the order of the DRP suitably. Thus, the Miscellaneous Application filed by the Revenue has become in- fructuous. Even otherwise also, we find the Bangalore Bench of the Tribunal in the case of ITO vs M/s Weg Industries (India) 6 MA No.602/Del/2019 Pvt. Ltd. in M.P. No.52/Bang/ 2019, vide order dated 28.08.2019 has decided identical issue and dismissed the Miscellaneous Application filed by the Revenue by observing as under:- “4. We have considered the submissions of ld. DR of revenue and gone through the impugned Tribunal order. We find that in this case, the assessment order was passed by the AO u/s. 143(3) r.w.s. 144C (13) of the IT Act. For ready reference, we reproduce the contents of sub-section 13 of section 144C which are as under. “Reference to dispute resolution panel. 144C. (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 insection 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.” 5. From the above contents of sub-section 13 of section 144C, it is seen that as per this section 144C (13), the AO has to simply pass the assessment order in conformity with the directions of DRP. Hence, although the assessment order is passed by the AO, the same has to be compulsorily in conformity with the directions of DRP. Moreover, as per the provisions of sub-section 1 of section 254 of IT Act, the Tribunal may pass such orders as it thinks fit. Hence in our considered opinion, this objection of the AO is not valid that the Tribunal cannot restore the matter back to the DRP in view of Rule 28 of ITAT Rules, 1963. For ready reference, we reproduce the contents of Rule 28 of ITAT Rules, 1963. The same are as under. “Remand of the case by the Tribunal. 28. Where the Tribunal is of the opinion that the case should be remanded, it may remand it to the authority from whose order the appeal has been preferred or to the [Assessing Officer], with such directions as the Tribunal may think fit.” 7 MA No.602/Del/2019 6. From the above Rule 28, it comes out that the matter may be remanded by the Tribunal to the authority from whose order the appeal has been preferred. We have seen that in the present case although the order is passed by the AO but it is compulsorily required to be in conformity with the directions of DRP and therefore, in our considered opinion, in view of the combined reading of Rule 28 of ITAT Rules, 1963, section 144C(13) and section 254(1) of the IT Act, it cannot be said that there is an apparent mistake in the Tribunal order if the Tribunal has restored back the matter in the present case to DRP and not to the AO. 7. In the result, the M.P. filed by the revenue is dismissed.” 6. Respectfully following the decision of the Bangalore Bench of the Tribunal in the case of ITO vs M/s Weg Industries (India) Pvt. Ltd. cited (supra) and further considering the fact that the DRP has already passed the order after the direction of the Tribunal, the Miscellaneous Application filed by the Revenue has become infructuous and is liable to be dismissed. Accordingly, we dismiss the Miscellaneous Application filed by the Revenue. 7. In the result, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the open court on 04/05/2022 Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [R.K.PANDA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 04 TH May, 2022. f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? fÜA fÜA fÜA fÜA P.S P.SP.S P.S Copy forwarded to: 1. Appellant 8 MA No.602/Del/2019 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi