TMI Blog2023 (3) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. See M/S SHYAM COLD STORAGE, [ 2013 (2) TMI 621 - ALLAHABAD HIGH COURT] , SRI DURGA ENTERPRISES [ 2014 (2) TMI 1297 - KARNATAKA HIGH COURT] ,JCB INDIA LTD. [ 2017 (9) TMI 673 - DELHI HIGH COURT] and TURNER INTERNATIONAL INDIA PVT. [ 2017 (5) TMI 991 - DELHI HIGH COURT] and VIJAY TELEVISION PRIVATE LTD. [ 2018 (10) TMI 1125 - MADRAS HIGH COURT] . Thus we hold that the assessment order is in the nature of final assessment order passed without adhering to the provisions of section 144C of the Act, is null and void and assessment is hereby quashed. - Decided in favour of assessee. - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER For the Appellant : Shri H. Srinivasulu, Adv. For the Respondent : Shri YVST Sai, CIT-DR. ORDER Per Shri Inturi Rama Rao, A.M. : This is an appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-2, Hyderabad Dt.05.12.2019 for Assessment Year 2015-16. 2. The assessee raised the following grounds of appeal : 1. On the Facts and in the circumstances of the case and in contrary to law, the Ld. CIT(A) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. TPO erred in applying the following arbitrary fillers on his own conjectures and surmises to arrive at companies as comparables to the Appellant: Employee cost filter of greater than 75 percent Companies having ITES revenue less than 75 percent of the total revenue: 9. On the facts and in the circumstances of the case and in contrary to law. the Ld. TPO erred in not providing working capital adjustment ('WCA') to the Appellant and stated that the Appellant has not been able to demonstrate that the working capital differences had impacted its profits. 10. On the facts and in the circumstances of the case and in contrary to law, the Ld. TPO has erred by selecting certain companies though they are functionally not comparable, earning high margins due to extraordinary events, fails the Ld. TPO's own filters and having presence of brand and also erred in computing erroneous margins: Crossdomain Solutions Private Limited Tech Mahindra Business Services Limited AGS Health Private Limited Infosys BPO Limited SPI Technologies India Private Limited Excel Infoways Limited MPS Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,52,32,990. 3. Reimbursement of expenses paid Rs.14,19,61,310. 4. Trade receivables Rs.17,00,85,605. 5. Payables Rs.47,16,769. 6. Purchase of computer software Rs.1,94,72,204. 3.3 The assessee company also submitted the Transfer Pricing Study report by aggregating all its international transactions, selected TNMM method as Most Appropriate Method (MAM) and adopted the costless margin as a profit level indicator for the purpose of determining Arm s Length Price (ALP) of the above international transactions. It is claimed that the above international transactions entered by the assessee company are at arm s length, as the assessee had PLI of 15.37% which falls within the range of profit margin earned by the comparables i.e. 6.07% to 17.85%. 3.4 On noticing the above international transactions, the Assessing Officer referred the matter to the Transfer Pricing Officer (TPO) for the purpose of bench marking the above international transactions u/s. 92CA(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court) 68 Taxmann.Com 246 4) JCB India Ltd. - Vs Dy. Commr. Of IT (Delhi High Court 398 ITR 189 5) Turner International India Pvt. Ltd. - Dy. Commr. Of IT (Delhi High Court) 398 ITR 177 6) Commissioner of IT Vs C-Sam (India) Pvt. Ltd. (Gujarat High Court) 398 ITR 182 7) Control Risk India Pvt. Ltd. - Vs Dy. Commr. Of IT (Delhi High Court) WP 5722/2017 8) Dy. Commr. Of IT Vs Control Risk India Pvt. Ltd. - SLP No.7090/2018 9) Honda Cars India Ltd. - Vs Dy. Commr. Of IT (Delhi High Court) 382 ITR 88 10) ESPN Star Sports Mauritius S.N.C. ET Compagnie Vs UOI (Delhi High Court) 388 ITR 383 11) ESS Distribution (Mauritius) S.N.C.E.T. Compagnie Vs Asst. Commr. Of IT (Delhi High Court 399 ITR 362 12) Pankaj Extrusion Ltd. - Vs Asst. Commr. Of IT (Gujarat High Court) 10 Taxmann.com 17 5. On the other hand, the learned Departmental Representative submitted that the order passed by the Assessing Officer dt.28.12.2018 has to be read and treated as draft assessment order as per the provisions of section 144C r.w.s. 92CA(4) r.w.s. 143(3) of the Act. Hence the appeal filed by the assessee is not maintainable, as draft assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. In the case of an eligible assessee under the provisions of section 144C(1) of the Act, the Assessing Officer had to at first instance forward a draft of the proposed assessment order, the assessee has an option either to file his acceptance of the assessment order or filed his objections to any such variations with DRP. In other words, in terms of section 144C(1), the Assessing Officer has no right to pass an assessment order pursuant to the order passed by the TPO. The Assessing Officer was mandatorily required to first pass a draft assessment order and communicate to the assessee, it is only after receipt of the draft assessment order the assessee has to accept the variations proposed by the Assessing Officer, it is only in case where the assessee opts to file appeal before the learned CIT (Appeals), the Assessing Officer can pass the final assessment order. In the present case, the Assessing Officer had passed the final assessment order straightaway which is in clear violation of provisions of section 144C of the Act. It is now settled position of law that non-adherence to the provisions of section 144C would result in quashing the assessment proceedings as held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Revenue at any stage of a proceeding cannot be sought to be cured by taking umbrage under Section 292B. Allowing such a contention would be misreading the intention of the Parliament in enacting Section 292B and Section 144-C. 49. The question of limitation raised by the Revenue would in no way save the Revenue from the non-compliance of Section 144-C of the Act. The noncompliance of the mandatory provisions of Section 144-C of the Act, being an incurable illegality, renders the assessment order null and void. Learned single Judge has taken into account all the relevant facts and laws and has given a well considered finding and we are of the considered opinion that no interference is called for with the order passed by the learned single Judge. It is also admitted fact that the decision of the Hon ble Andhra Pradesh High Court in the case of M/s. Zuari Cement Ltd. Vs. ACIT dt.21.2.2013 in W.C. No.5557 of 2012 has categorically held that failure to pass a draft assessment order u/s. 144C(1) of the Act would result in rendering the final assessment order without jurisdiction, is null and void and unenforceable. The decision of the Hon ble Andhra Pradesh High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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