NIPPON YUSEN KABUSHIKI KAISHA,KOLKATA V. CIT-(IT &TP), KOLKATA

ITA 1268/KOL/2019

AI Insights

The case involves Nippon Yusen Kabushiki Kaisha, the appellant, contesting a revisionary order by the Principal Commissioner of Income Tax (Pr. CIT) under section 263 of the Income Tax Act, 1961. The original assessment for the assessment year 2014-15 was completed on 21.02.2017, but the Pr. CIT later sought to revise this order, claiming it was erroneous and prejudicial to the interest of the revenue as it did not involve a necessary reference to the Transfer Pricing Officer for determining the Arms Length Price of international transactions. The appellant argued that the revision was invalid as the original assessment order was barred by limitation, having been passed after the statutory deadline of 31.12.2016. The Tribunal agreed with the appellant, leading to the quashing of the revisionary order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314542 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP KUMAR MONDAL
• Assessee Lawyers: KETAN VED
• Keywords: Set aside; Transfer pricing; International transaction; Revision of order
• Section: 144; 143(3); 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 1268/KOL/2019 (Assessment Year: 2014-15) Nippon Yusen Kabushiki Kaisha C/o Yusen Logistics (India) Private limited, Central Plaza, Room No.202, 2nd Floor, 2/6, Sarat Bose Road, Kolkata, West Bengal, 700020 Vs. CIT-(IT &TP) 1st Floor, Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata - 700107, Kolkata, West Bengal, 700107 (Appellant) (Respondent) PAN No. AABCN1372N Assessee by : Shri Ketan Ved, AR Revenue by : Shri Pradip Kumar Mondal, DR Date of hearing: 19.03.2025 Date of pronouncement : 06.05.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income Tax (International Taxation & Transfer Pricing) Kolkata (Ld. CIT) dated 27.03.2019 for the AY 2014-15. 02. The assessee has challenged the revisionary order passed by ld. Pr. CIT on various grounds raised in the memorandum of appeal filed by the assessee. Besides, the assessee has also raised an additional ground vide letter dated 24.08.2021, challenging the validity of order passed u/s 263 of the Act on the ground of being invalid as it seeks to revise the assessment order dated 21.02.2017, passed u/s 143(3) read Page | 2 ITA No. 1268/KOL/2019 Nippon Yusen Kabushiki Kaisha; A.Y. - 2014-15 with section 144C(3)(a) of the Act, which itself is barred by limitation. The ground raised by the assessee are extracted below:- “1:0 Re.: Validity of Order u/s. 263: 1:1 The impugned Order dated 27 March 2019 passed by the Commissioner of Income- tax u/s. 263 of the Income-tax Act, 1961 [\"the Act\"] is bad in law since it seeks to revise the Order dated 21 February 2017 passed u/s. 143(3) r.w.s. 144C(3)(a) which Order being barred by limitation is therefore bad-in-law and void ab-initio. 1:2 The Appellant submits that considering the facts and circumstances of the case and the law prevailing on the subject, the Order dated 21 February 2017 passed by the Assessing Officer u/s. 143(3) r.พ.ร. 144C(3) (a) of the Act was barred by limitation and hence the same could not be revised u/s. 263 of the Act. 2:0 Re.: General: 2:1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal.” 03. The facts in brief are that the assessee filed the return of income on 28.11.2014, declaring total income at ₹18,92,40,510/-. The case was selected for scrutiny and assessment was accordingly framed u/s 143(3) of the Act vide order dated 21.02.2017, assessing the income at ₹22,29,26,790/-. The ld. Pr.CIT thereafter noted on the perusal of the assessment order that the ld. AO had not referred the issue to the Transfer Pricing Officer (TPO) for determining the Arms Length Price about the international transactions. The ld. Pr.CIT stated in the order that though the ld. AO had issued the letter to the assessee as to why the matter should not be referred to ld. Transfer Pricing Officer for benchmarking the international transactions which was also replied by the ld. Assessing Officer. AO however thereafter had not mentioned as to why the issue was not referred to the ld. Transfer Pricing Officer. Accordingly, the assessee was issued show cause notice u/s 263 of the Act qua the assessment order passed u/s 143(3) dated 21.02.2017 Page | 3 ITA No. 1268/KOL/2019 Nippon Yusen Kabushiki Kaisha; A.Y. - 2014-15 being erroneous and prejudicial to the interest of revenue and finally the same was revised by the ld. Pr. CIT by holding the same to be erroneous and prejudicial to the interest of the Revenue and by directing the ld. AO to pass the assessment order after making reference to ld. Transfer Pricing Officer for determining Arms Length Price u/s 92CA(3) of the Act after affording reasonable opportunity of hearing to the assessee. T 04. he ld. Counsel for the assessee vehemently submitted that the ld. Pr. CIT seeks to revise the assessment order which was invalid on the ground of being barred by limitation as per provisions of Section 153(1) of the Act. The ld. AR submitted that as per the provisions of Section 153(1) of the Act no order of assessment shall be passed u/s 143 or u/s 144 at any time after expiry from 21 months from the end of assessment year in which the income was first assessable. The ld. AR submitted that the impugned assessment order involved in the present appeal is A.Y. 2014-15 and therefore, 21 months from the end of the assessment year expired on 31st December, 2016 and therefore, in terms of Section 153(1) of the Act no order of assessment could have been framed after that date. However, in the present case the assessment has been framed by the AO vide order dated 21.02.2017, which is hopelessly barred by limitation. The ld. AR submitted that the revisionary jurisdiction cannot be exercised to set aside the assessment order which is invalid as the same is barred by limitation. 05. The ld. DR on the other hand relied on the order of ld. CIT by submitting that the issue raised by the assessee at this stage were never raised before lower authorities and therefore, the assessee should not be allowed to raise this issue and the same may kindly be dismissed in Page | 4 ITA No. 1268/KOL/2019 Nippon Yusen Kabushiki Kaisha; A.Y. - 2014-15 limine. On merit the ld. DR submitted that the assessments framed by the ld. AO is apparently erroneous and prejudicial to the interest of the Revenue, as the order has been passed by the AO without referring the matter to the ld. Transfer Pricing Officer despite the assessee having had international transactions which were required to be benchmarked as per the provisions of Section u/s 92CA(3) of the Act. Therefore, the appeal of the assessee may kindly be dismissed. 06. After hearing the rival contentions and perusing the materials available on record, we are of the view that the assessee has raised this legal issue before us that the assessment order passed u/s 143(3) dated 21.02.2017, was itself barred by limitation in terms of provisions of Section 153(1) of the Act and was invalid and nullity and therefore, the revisionary jurisdiction u/s 263 of the Act by the ld. Pr. CIT is also invalid on the ground that the assessment which was sought to be revised is itself barred by limitation. We have perused the provisions of Section 153(1) of the Act which provides that no assessment shall be framed u/s 143(3) or 144 of the Act, after expiry of 21 months from the end of the relevant assessment year in which the income was first assessable. Accordingly, we note that the assessment got time barred on 31.12.2016, whereas the order of assessment was passed on 21.02.2017. In our opinion the assessment is hopelessly barred by limitation. Now the issue before us whether the ld. Pr. CIT has a power to revise the same on the ground of being erroneous and prejudicial to the interest of the Revenue. In our opinion, the assessee has raised this issue in the collateral proceeding before us challenging the validity order framed, passed u/s 143(3) of the Act which is in our opinion is within the legitimate rights of the assessee. Considering the facts of the case in the light of the aforesaid decision, we are of the view that the Page | 5 ITA No. 1268/KOL/2019 Nippon Yusen Kabushiki Kaisha; A.Y. - 2014-15 jurisdiction u/s 263 of the Act is invalid and accordingly, the same is quashed and so is the order passed u/s 263 of the Act. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06.05.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 06.05.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "