STRYKER INDIA PVT. LTD. V. ADDITIONAL COMMISSIONER OF INCOME TAX & ANR.

W.P.(C)/11342/2017

AI Insights

The case involves Stryker India Pvt. Ltd., the petitioner, contesting the final assessment orders issued by the Additional Commissioner of Income Tax. The core issue was the procedural irregularity where the A.O. issued a final order without first issuing a draft assessment order, as required under Section 144C of the Income Tax Act, 1961. The petitioner argued that this contravened express provisions of law, citing the judgment in JCB India Limited versus Deputy Commissioner of Income Tax, which supported their position that such orders are nullities. The Revenue contended that the defect was curable, referencing the BSC C&C Joint Venture case, which had a different context as it involved consent from the parties to treat the final order as a draft order. The court, after considering the arguments and precedents, decided in favor of the petitioner, quashing the final order and directing a fresh assessment process.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 686724 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 16-08-2018
• Assessment Year: misc
• Other Referred Cases: JCB India Limited versus Deputy Commissioner of Income Tax, BSC C&C Joint Venture versus JCIT, Range-63, New Delhi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ASHEESH JAIN
• Assessee Lawyers: DEEPAK CHOPRA; HARPRIT AJMANI; ROHAN KHARE
• Keywords: Assessment Year; Dispute Resolution Panel; Draft order; Final order; High Court; Income tax appellate tribunal; Transfer Pricing Officer
• Section: 92CA(1); 92CA(3); 144C(3); 260-A

Judgement Text

"$~9 & 10 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 11325/2017 & CM 46253/2017 STRYKER INDIA PVT. LTD ..... Petitioner Through : Mr Deepak Chopra and Mr Harprit Singh Ajmani and Mr Rohan Khare, Advocates. versus ADDITIONAL COMMISSIONER OF INCOME TAX & ANR. ..... Respondents Through : Mr Asheesh Jain, Senior Standing Counsel for Revenue. + W.P.(C) 11342/2017 & CM 46361/2017 STRYKER INDIA PVT. LTD. ..... Petitioner Through : Mr Deepak Chopra and Mr Harprit Singh Ajmani and Mr Rohan Khare, Advocates. versus ADDITIONAL COMMISSIONER OF INCOME TAX & ANR. ..... Respondents Through : Mr Asheesh Jain, Senior Standing Counsel for Revenue. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA O R D E R % 16.08.2018 We have heard the learned counsel for the parties. W.P.(C) 11325/2017 page 1 of 4 The petitioner’s grievance is that the impugned order, for Assessment Years 2009-2010 and 2002-2003, are vitiated illegal because the Transfer Pricing Officer (TPO)’s proposals, with the Assessing Officer(A.O.)’s proposed additions, were not made in the form of the draft order but rather the A.O. passed a final order. The facts are not many but the relevant ones are that for Assessment Year 2009-2010, the draft order pursuant to the reference made to the TPO was initially made on 27.02.2013; the objections by the Assessee to the Dispute Resolution Panel (DRP) were disposed of on 31.10.2013 and a final assessment was made on 19.12.2013 by the A.O. The assessee carried the matter in appeal to the Income Tax Appellate Tribunal (ITAT) which remitted the matter entirely to the TPO on 15.04.2014. The Revenue’s appeal under Section 260-A of the Income Tax Act, 1961 to this Court resulted in modification of the remit; by order of 07.05.2015. This Court directed the ITAT to examine the matter. The ITAT, in turn, on 03.06.2016, remitted the issues for consideration to the TPO. This resulted in a fresh reference by the A.O. to the TPO under Section 92CA(1) of the Act . On 09.10.2017, the TPO passed an order under Section 92CA(3) of the Act, proposing adjustments. It was, in these circumstances, that the A.O. was expected to issue a draft assessment order; instead he proceeded to pass a final order, incorporating the adjustments along with other additions, on 14.11.2017. W.P.(C) 11325/2017 page 2 of 4 The petitioner relies upon the judgment of this Court in JCB India Limited versus Deputy Commissioner of Income Tax to say that such orders, which contravene express provisions of law, are to be treated as nullity and have no further consequence. Learned counsel for the Revenue, on the other hand, urges that the defect found exist is a curable one and urges that this Court should follow the approach adopted in BSC C&C Joint Venture versus JCIT, Range-63, New Delhi { (W.P.(C) 7623/2017 decided on 05.02.2018} We notice that in the JCB India Limited (supra), the Court had undoubtedly stated that the order which purports to be a final one to the extent it contravenes Section 144C(3) is a nullity, however, the Court refrains from expressing anything further, which implies that the Revenue’s option to proceed afresh and conclude the assessment order, is kept open. Obviously in BSC C&C Joint Venture (supra), the Court took the matter further and directed the completion of proceedings for issuance of final assessment order. Notably, however, BSC C&C Joint Venture(supra) was premised upon consent of the parties to treat the final order a draft order. However, the consent is not forthcoming in the present case. In the present circumstances, the Court hereby quashes the impugned order of the A.O. dated 14.11.2017. The period summoned by the present proceedings under Article 226 of the Constitution of India shall hereby be excluded from reckoning the period of limitation for the purposes of making a fresh assessment order. The A.O. shall W.P.(C) 11325/2017 page 3 of 4 proceed in accordance with law and complete the final assessment under Section 144(C) of the Income Tax Act, 1961, in accordance with law. The Writ Petitions are allowed. Pending applications also stand disposed of accordingly. All rights and contentions of the parties are hereby kept open. Order Dasti. S. RAVINDRA BHAT, J A. K. CHAWLA, J AUGUST 16, 2018 ‘Sn’ W.P.(C) 11325/2017 page 4 of 4 "