TMI Blog2016 (7) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... jected the request for adjournment which would have enabled the petitioner to work out their remedies available under law. However, it appears that in a hurried manner, the entire proceedings were closed on 17.12.2015 and orders were passed on 23.12.2015. It may be true that in terms of Section 253(d) of the Act, the petitioner is entitled to canvas the correctness of the order of DRP before the Tribunal while challenging the Assessment Order dated 29.01.2016. However, the order passed by the DRP, if it has been passed in violation of the principles of natural justice, the petitioner would be entitled to question the same before this Court invoking the jurisdiction under Article 226 of the Constitution of India. In such circumstances, the availability of alternate remedy is not a bar to approach this Court. In the facts and circumstances of the case, this Court is satisfied that there has been violation of principles of natural justice inasmuch as the opportunity granted to the petitioner was not effective. It may be true that the DRP while considering the materials placed by the petitioner before them had granted certain reliefs to the assessee, but that by itself will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged on the ground of violation of principles of natural justice. The learned senior counsel appearing for the petitioner has not advanced any arguments on the merits of the order passed by the DRP or on the merits of the assessment completed by the second respondent. The contention raised is that the DRP had hurriedly passed the order within a period of seven days after having directed the petitioner to appear for personal hearing on 16.12.2015 and on the said date, a request for adjournment was made by the petitioner by their letter handed over in person to the DRP mentioning about the floods which had affected their factory premises and as a result of which they are unable to retrieve the records from the factory and in the said communication, the petitioner had requested for 30 days time. However, the DRP did not adjourn the hearing and the assessee had been compelled to appear before the DRP and produce whatever documents which are available with them in the form of additional submission on 16.12.2015 and 17.12.2015 and the manner in which, the order came to be passed by the DRP, it has to be held that there is total violation of natural justice. 4. The DRP being a Panel, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of Mariamma Roy vs. Indian Bank and others reported in (2009) 16 SCC 187. He has also relied upon the decision of the Division Bench of High Court of Karnataka in the case GE India Technology Centre Pvt. Ltd. by G.V.Ramanna, Chief Financial Officer vs. Dispute Resolution Panel and Assistant Commissioner of Income Tax reported in MANU/KA/0936/2011 to explain the scope of Section 144C of the Act. 6. In reply, the learned Senior Standing Counsel appearing for the respondents contended that the DRP passed an order on 23.12.2015 and the Assessing Officer has completed the assessment by order dated 29.01.2016 thereby giving effect to the order of the DRP and therefore, the order of the DRP impugned in W.P.No.5499 of 2016 has worked itself out and the same cannot be challenged. 7. After hearing the learned counsels appearing for the parties, the short issue which falls for consideration in these cases is whether there is violation of principles of natural justice in the proceedings before the DRP and whether the petitioner was afforded fair and reasonable opportunity before the DRP? Undoubtedly, as the name indicates the Panel is a Dispute Resolution Pan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that the period of nine months should be computed from 30.05.2015. But in my view the time should be computed from the date on which the Draft Assessment Order is received by the assessee as sub-section (12) of Section 144C uses the expression Draft order is forwarded . 9. Be that as it may, even accepting for the sake of argument that the time limit commences from 30.05.2015, no order could have been passed beyond 31.12.2015 by the DRP in view of the embargo under sub-section (12) of Section 144C of the Act. However, this aspect was within the knowledge of the DRP. Nevertheless, for nine months, the DRP did not fix the date for hearing the objections of the petitioner. But only on 16.12.2015 the petitioner was directed to appear. It is not in dispute that on 16.12.2015 the petitioner appeared and submitted a letter, in which the following had been stated: ....... While the arguments in support of the Company's claim had already been submitted both before the Transfer Pricing Officer ( TPO ) and had also formed part of the submissions made by the Company in their Form 35A, filed on 24.04.2015, additional evidences marking the support availed by the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XIV of the Income Tax Act, 1961 which relates to assessment proceedings. Therefore, the DRP is a part of the assessment machinery and the proceedings before the DRP are a mere extension and part of the assessment proceedings. These are neither appellate nor settlement nor arbitration process. Hence, by virtue of Section 144C(7) of the IT Act, your Honours has ample powers to review and consider the additional evidence, which would have substantial consideration in deciding the issues under objection. 11. Not stopping with that, on 17.12.2015 the petitioner filed another objection. No doubt in these objections, factual contentions were raised. But it has to be seen as to whether the Dispute Resolution Panel which is said to have been constituted as alternative dispute resolution mechanism under the Act could have dealt with the matter in the manner done in the instant case. The petitioner cannot be blamed for the delay of nine months during which objections were kept pending before the DRP i.e., from 22.04.2015 to 16.12.2015. Therefore, the DRP while considering the request for adjournment could not have disbelieved the same as it is an admitted fact that entire Chennai was fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted certain reliefs to the assessee, but that by itself will not validate the order and to state that the petitioner had been afforded an opportunity by the DRP. The concept of principles of natural justice which has been provided under the scheme of Section 144C of the Act should be an effective opportunity as the direction issued by the DRP binds the Assessing Officer and he would be required to complete the assessment as per the orders of the DRP. Therefore, an opportunity of hearing should be adequate, effective and reasonable. Having gone through the facts elaborately, this Court is fully convinced that the petitioner/Assessee has not been given an effective opportunity to place their submissions. 13. For all the above reasons, W.P.No.5499 of 2016 is allowed and the impugned order passed by the DRP is set aside. Consequently, the assessment order dated 29.01.2016 is set aside and the matter is remanded to the DRP for fresh consideration. Accordingly, W.P.No.9629 of 2016 is allowed. No costs. Consequently, connected miscellaneous petitions are closed. 14. In the light of the orders passed by this Court remitting the matter to the DRP, the petitioner/assessee is not en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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