Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Assistant Commissioner of Income-Tax Versus Getrag Hi Tech Gears Pvt. Ltd. and Vice Versa

2016 (5) TMI 323 - ITAT CHANDIGARH

Validity of final order passed by the Assessing Officer - Reference to Dispute Resolution Panel - Held that:- There is no doubt as to the fact that the Transfer Pricing Officer has proposed adjustment to be made on account of difference in the arm's length price in his order passed under section 92CA of the Act.

Further, under section 144C(2) of the Act, such eligible assessee has the option either to accept the said addition or to file objection before the Dispute Resolution Panel an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

been given any option to pass or not to pass the draft assessment order.

Further, on a perusal of Circular No. 5 of 2010, dated June 3, 2010 issued by the Central Board of Direct Taxes being explanatory notes to the provision of the Finance (No. 2) Act, 2009, it has been very clearly stated that the provisions are applicable with effect from October 1, 2009. It is also an undisputed fact that the order of the Assessing Officer in the present case is dated December 26, 2011, the order .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ur of assessee. - I. T. A. No. 823/Chd/2012 and C. O. No. 29/Chd/2012 - Dated:- 11-3-2016 - Bhavnesh Saini (Judicial Member) And Rano Jain (Accountant Member) For the Petitioner :Ajay Sharma For the Respondent :Ashwani Kumar, Aditya Kumar ORDER Rano Jain (Accountant Member) 1. The appeal filed by the Revenue is directed against the order of the learned Commissioner of Income-tax (Appeals)-I, Ludhiana, dated May 3, 2012, for the assessment year 2008-09. The assessee has filed the cross objections .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t;the Act"), the case was referred by the Assessing Officer to the Transfer Pricing Officer (TPO) under section 92 of the Act. 3. Before the Transfer Pricing Officer, the assessee filed a detailed transfer pricing report. However the Transfer Pricing Officer rejected the transfer pricing study maintained by the assessee and rejecting the comparables as adopted by the assessee in the transfer pricing study, carrying his own transfer pricing study, applying various filters, adopted some new c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

many fold. One of the contentions was that the Assessing Officer has not complied with the provisions of section 144C of the Act as no draft order was provided to the assessee before proceeding to frame the assessment order and thereby the assessee has been deprived of the opportunity and the right of filing appeal before the Dispute Resolution Panel. Further, on the merits of the case the contentions of the assessee were that the Transfer Pricing Officer has wrongly rejected the comparables ad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

penses. Since these expenses were incurred due to development and production of the new product called DCX gears, these were claimed to be extraordinary expense. The Commissioner of Income-tax (Appeals) while adjudicating the appeal of the assessee rejected the legal ground raised by the assessee holding that the provisions as contained under section 144C have been brought into the statute with effect from October 1, 2009, by the Finance (No. 2) Act, 2009, and, therefore, would not be applicable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g effect of due adjustment on these extraordinary items calculated the price of the international transactions entered into by the assessee and held that these were at the arm's length. In this way the Commissioner of Income-tax (Appeals) gave a relief to the assessee on the merits of the case. 5. Aggrieved by the orders of the Commissioner of Income-tax (Appeals), the Department has come in appeal before us raising the following grounds of appeal : 1. That the learned Commissioner of Income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n of the arm's length price under section 92CA of the Income-tax Act, 1961. 3. That the order of the learned Commissioner of Income-tax (Appeals) be set aside and that of the Assessing Officer be restored. 4. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed of. 6. As against this the assessee has filed a cross objection and raised the following grounds : "1. That the learned Commissioner of Income-tax (Appeals)-I, Ludhiana, gravely erred .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le to the assessment year 2008-09." 7. The main contention of the assessee in its cross objection is that the Assessing Officer has not complied with the provisions of section 144C, as no draft order was provided to it. Since the issue involved in the cross objection is a legal issue we intend to adjudicate the same first. 8. The learned counsel for the assessee while arguing before us stated that by not complying with the provisions of section 144C, i.e., not providing the draft order the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o our notice that the order of the Transfer Pricing Officer is dated October 21, 2011, while the order of the Assessing Officer in the present case is dated December 26, 2011. In view of this it was contended that the order passed by the Assessing Officer is bad in law and liable to be quashed. Reliance was placed on the judgment of the High Court of Madras in the case of Vijay Television P. Ltd. v. DRP [2014] 369 ITR 113 (Mad). A copy of the order of the Supreme Court dismissing the special lea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is liable to be quashed. 9. The learned Departmental representative in reply relied on the order of the Commissioner of Income-tax (Appeals) and stated that the provisions of section 144C have been brought into the statute with effect from October 1, 2009, by the Finance (No. 2) Act, 2009, and, therefore, would not be applicable retrospectively to the assessment year 2008-09. Since the case pertains to the assessment year 2008-09 these provisions are not applicable to it. 10. We have heard the l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,- (a) file his acceptance of the variations to the Assessing Officer ; or (b) file his objections, if any, to such variation with,- (i) the Dispute Resolution Panel ; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-section (2) expires." 11. From the perusal of the above provisions it is clear that the position of law is that under section 144C of the Act, with effect from October 1, 2009, the Assessing Officer is required to issue a draft assessment order in case there is a proposed addition or disallowance on the return filed by the assessee. This is a mandatory requirement of law. 12. The provisions are quiet unambiguous. The fact that the assessee is an eligible assessee is not in dispute in the p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icer has proposed adjustment to be made on account of difference in the arm's length price in his order passed under section 92CA of the Act. 14. Further, under section 144C(2) of the Act, such eligible assessee has the option either to accept the said addition or to file objection before the Dispute Resolution Panel and such option has to be exercised within 30 days of receipt of such draft assessment order. The procedure is if the assessee chooses to raise its objection before the Dispute .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssued by the Central Board of Direct Taxes being explanatory notes to the provision of the Finance (No. 2) Act, 2009, it has been very clearly stated that the provisions are applicable with effect from October 1, 2009. The relevant extract of the circular reads as under (page 338) : "45. Provision for constitution of alternate dispute resolution mechanism 45.1 The dispute resolution mechanism presently in place is time consuming and finality in high demand cases is attained after long drawn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er) to the eligible assessee if he proposes to make on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,- (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with- (i) the Dispute Resolution Panel ; and (ii) the Asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the,- (a) draft order ; (b) objections filed by the assessee ; (c) evidence furnished by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny Income-tax authority and report the result of the same to it. (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. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the memb .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

directions issued under sub-section (5), the Assessing Officer, shall, in conformity with the directions, complete the assessment without giving any further opportunity of being heard, within one month from the end of the month in which the direction is received notwithstanding anything to the contrary contained in section 153. (14) The Board may make rules for the efficient functioning of the Dispute Resolution Panel with a view to expeditiously dispose of the objections filed, under sub-secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nsequential amendments have been made- (i) in sub-section (1) of section 131 so as to provide that the 'Dispute Resolution Panel' shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908) ; (ii) in clause (a) of sub-section (1) of section 246A so as to exclude the order of assessment passed under sub-section (3) of section 143 or under section 147 in pursuance of the directions of the 'Dispute Resolution Panel' as an appealable order .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Dispute Resolution Panel (DRP) or to pursue the normal channel of filing an appeal against the assessment order before the Commissioner of Income-tax (Appeals). In order to approach the Dispute Resolution Panel, the assessee must file an objection against the draft assessment order within the prescribed time limit. In case the assessee does not file an objection, the Assessing Officer shall pass the assessment order. The assessee can file an appeal against such assessment order before the Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version