TMI Blog2021 (8) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... in the event of any non-consideration of a particular point in the Draft Assessment Order by the Assessment Officer, the Dispute Resolution Panel being a Specialised Panel is provided with the power to propose such variations, relating to any matter arising out of the assessment proceedings. Therefore, the power of enhancement contemplated under subsection (8) is clarified through the explanation. Such a clarification cannot be construed as 'excessive power' as in the absence of such clarification by way of an explanation, the very purpose and object of sub-section (8) to Section 144C would be diluted. Explanation contemplates that any variation arising out of the assessment proceedings relating to the Draft Assessment Order shall be proposed and on such proposal, an opportunity is to be provided to the eligible assessee to defend their case. Thus, the requirement as contemplated is that the Dispute Resolution Panel is to provide pre-decisional hearing to the assessee in order to comply with the principles of natural justice. Once a Dispute Resolution Panel identified and picked up such variations arising out of the assessment proceedings relating to the Draft Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Act and Rules; - W.P.No.26313 of 2017 - - - Dated:- 17-8-2021 - Hon'ble Mr. Justice S.M.Subramaniam For the Petitioner : Mr.N.V.Balaji For the Respondents : Mrs.Hema Muralikrishnan Senior Standing Counsel ORDER The lis on hand is instituted questioning the legal validity of the order passed by the Dispute Resolution Panel in proceeding F.No.346/DRP- 2/BANG/2016-17 dated 20th September, 2017. 2. The petitioner was incorporated as a joint venture between M/s.Delphi Singapore and TVS Group India. It is engaged in the business of manufacturing of diesel fuel injection equipment for cars, sports utility and multi utility vehicles, light commercial vehicles, tractors, single and two cylinder engines for original engine manufacturers. During Assessment Year 2013-14, the petitioner was engaged in various international and specified domestic transactions. The petitioner filed its return of income on 28th November, 2011 declaring a total income of 'Nil'. Along with the return of income, the international and specified domestic transactions of the petitioner were duly reported in the Accountant's Report in Form No.3CEB filed in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case, the Assessing Officer has not adjudicated the issue taken out for the purpose of enhancement by the Dispute Resolution Panel and therefore, the Dispute Resolution Panel has no powers to issue notice for enhancement as the said issue raised was not considered by the Assessing Officer in the Draft Assessment Order. 7. The matter of variation is not proposed in the Draft Assessment Order, therefore, the explanation clause provided under Section 144C(8) cannot be expanded so as to exceed the scope of the original provision i.e., Section 144C of the Act. In other words, it is contended that the explanation contemplated must be within the main provision and exercise of powers under the explanation clause is impermissible under law. In the present case, when the variation is not adjudicated in the Draft Assessment Order, the said variation cannot be taken out for the purpose of enhancement and thus, the Dispute Resolution Panel has no powers to issue notice and reject the objections filed by the petitioner. 8. In support of the said contention, the learned counsel for the writ petitioner relied on the judgment of the Hon'ble Supreme Court of India in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a recent case Commissioner of Income-tax, West Bengal v. Calcutta Agency Ltd. [1951] 19 ITR 191, that as the statement of the case prepared by the Appellate Tribunal -under the rules framed under the Income-tax Act is prepared with the knowledge of the parties concerned and they have a full opportunity to apply for any addition or deletion from that statement, the High Court in dealing with the question should confine and restrict if self to the facts contained in the statement of the case. The High Court must start by looking at the facts found by the Tribunal and answer the question of law on that footing. It should not depart from that rule and convert itself into a fact finding authority, which is not part of its advisory jurisdiction. 10. In the case of Commissioner of Income-tax V. Rai Bahadur Hardutroy Motilal Chamaria reported in [1967] 66 ITR 443 (SC) , the Hon'ble Supreme Court considered the pleas which read as under: The principle that emerges as a result of the authorities of this Court is that the Appellate Assistant Commissioner has no jurisdiction, under section 31(3) of the Act, to assess a source of income which has not been processed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment passed also lost its legal validity and thus, the writ petition is to be allowed. 13.Mrs.Hema Muralikrishnan, learned Senior Standing Counsel appearing on behalf of the respondents objected the contentions raised on behalf of the petitioner by stating that the provisions of the Income Tax Act, more specifically, Section 144C(8) is an unambiguous and the Dispute Resolution Panel has the power to consider any matter arising out of the assessment proceedings relating to the Draft Assessment Order. Thus, the only question is that, whether the issue considered is arising out of the assessment proceedings or not? In the present case, the objections filed by the petitioner itself would show that the issues raised for enhancement in the notice dated 12.09.2017 is relating to the financial year 2012-13 and furthermore, the Employees Secondment Charges are also included in the proceedings. When the subject matter was discussed and certain issues were not discussed, such issues can be taken up by the Dispute Resolution Panel either to confirm or to reduce or to enhance the variations. When subsection (8) provides power to the Dispute Resolution Panel to enhance the variations propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the petitioner that by virtue of the said Explanation, the DRP always had the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee. Section 144 C(8) and the Explanation appended thereto reads as under:- 144C (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 removal 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, notwithstanding that such matter was raised or not by the eligible assessee. 24. The said explanation was introduced through the Finance Act of 2012. But, it was to take effect retrospectively from 01.04.2009. The Dispute Resolution Panel's directions w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd issue suitable directions to the competent authority for inclusion. 19. Thus, the Dispute Resolution Panel is an Expert Panel consisting of three Commissioners of Income Tax and in this context, the provision is to be considered. At the first instance, the draft of the proposed order of assessment is to be forwarded to the Dispute Resolution Panel by the Assessing Officer. Thereafter, on receipt of the draft order, the eligible Assessee shall, within thirty days of the receipt by him of the draft order, may accept the variations of the Assessing Officer or file his objections, if any, to such variation with the Dispute Resolution Panel and the Assessing Officer. In the event of acceptance, the Assessing Officer shall complete the assessment on the basis of the Draft Assessment Order, if no objections are received within the period as specified in sub-section (2), then also the Assessing Officer shall pass final orders. However, in the cases where any objections are filed, then, the Dispute Resolution Panel shall issue directions referred to in sub-section (5), after considering the issues as contemplated under sub-section (6) of Section 144C of the Act. 20. Sub-section (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower for enhancement. Explanation is provided to remove the doubts. The explanation clarifies that the Dispute Resolution Panel have the power to consider any matter arising out of the assessment proceedings relating to the Draft Order. Thus, the requirement is that the variations proposed for enhancement must be relatable to the Draft Assessment Order and such issues must be arising out of the assessment proceedings. The very purpose and object of explanation is to ensure that in the event of any non-consideration of a particular point in the Draft Assessment Order by the Assessment Officer, the Dispute Resolution Panel being a Specialised Panel is provided with the power to propose such variations, relating to any matter arising out of the assessment proceedings. Therefore, the power of enhancement contemplated under subsection (8) is clarified through the explanation. Such a clarification cannot be construed as 'excessive power' as in the absence of such clarification by way of an explanation, the very purpose and object of sub-section (8) to Section 144C would be diluted. 26. Power conferred on the Dispute Resolution Panel to confirm enhance or reduce is certainly gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Such an issue does not arise at all in the present case. In the case before the Hon'ble Supreme Court and the principles summed up would reveal that the particular question of law was neither raised before the Tribunal concerned nor considered by the Tribunal and therefore, the same will not be a conclusion arising out of its order. However, in the present case, the variations raised by the Dispute Resolution Panel in its notice is relatable to the Draft Assessment Order and more specifically, the objections filed by the petitioner itself reveals that they have dealt with the facts in respect of Employee Secondment Charges and while narrating the background, the details are also furnished. Thus, the Dispute Resolution Panel in exercise of its powers as guided in the Explanation clause, issued notice and received objections and thereafter, proceeded with the matter by following the procedures as contemplated. The Dispute Resolution Panel being an Expert Panel, is bound to ascertain the correctness or otherwise of the Draft Assessment Order passed by the Assessing Officer. In the event of identifying omission or commission or excessive exercise, the Dispute Resolution Panel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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