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2017 (6) TMI 401 - ITAT PUNE

2017 (6) TMI 401 - ITAT PUNE - TMI - Transfer pricing adjustment - order passed by the TPO u/s 92CA(3)making upward adjustment to the international transactions - period of limitation - Held that:- The provisions of section 153(2) of the Act lays down the time limit for re-assessment and it is provided that where the notice under section 148 of the Act is served on or after 1st day of April, 2005 but before the 1st day of April, 2011, then for completing the assessment or re-assessment or re-com .....

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he assessment order to be invalid. - Decided against revenue - ITA No.1946/PUN/2014 - Dated:- 7-6-2017 - MS. SUSHMA CHOWLA, AND SHRI ANIL CHATURVEDI, AM For The Appellant : Shri Anil Kumar Chaware For The Respondent : None ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the Revenue is against the order of CIT(A)-IT/TP, Pune, dated 12.08.2014 relating to assessment year 2007-08 against order passed under section 144 r.w.s. 147 of the Income-tax Act, 1961 (in short the Act ). 2. The Revenue has .....

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(Appeals)-IT/TP has erred in not taking into account the draft order passed on 23.12.2011 as required under section 144C(1) of the Income-tax Act, 1961 even though there was variation, which was prejudicial to the interest of the assessee, to be made in the income or loss returned. 4. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals)-IT/TP has erred in not appreciating the fact that even though the TP reference in this case was not made by the .....

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ring, the order of the Id.CIT(A) may be vacated and that of the Assessing Officer be restored. 3. The hearing in appeal filed by the Revenue was fixed on 05.01.2017 and thereafter on 06.04.2017. However, none was present on behalf of the assessee. So, the learned Departmental Representative for the Revenue was directed to serve the notice upon the assessee. The learned Departmental Representative for the Revenue has filed on record the copy of report of Assessing Officer in this regard, wherein .....

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assessee company was not given. The learned Departmental Representative for the Revenue pleaded that the notice has been served and the matter be heard. However, none appeared on behalf of the assessee nor any application was filed adjournment. 4. Briefly, in the facts of the case, the assessee had filed the return of income declaring Nil income. Thereafter, notice under section 148 of the Act was issued on 14.01.2011 and served upon the assessee on 24.01.2011. The Assessing Officer notes in the .....

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essee failed to appear and the Assessing Officer proposed to make the adjustment under section 144 of the Act and added the said amount as income of the assessee. The Assessing Officer passed a draft assessment order on 23.12.2011, copy of which was sent to the assessee and the same was returned by the postal authorities. Thereafter, another letter was sent to the address available of the assessee. The assessee in reply, stated that the draft assessment order was not received by it. The Assessin .....

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44 r.w.s 147 of the Act was barred by limitation. 7. On perusal of record, it transpires that the reason for reopening the assessment in the present case was the order passed by the TPO under section 92CA(3) of the Act, wherein he had worked out the upward adjustment of ₹ 1.46 crores to the international transactions undertaken by the assessee. The said order is dated 29.10.2010. Thereafter, the Assessing Officer records reasons for reopening the same under section 147 of the Act and issue .....

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ce under section 148 of the Act was issued. Where the notice under section 148 of the Act was served upon the assessee on 24.01.2011, therefore, the period of nine months would expire by 31.12.2011. The assessment in the case has been completed on 29.02.2012 vide order passed under section 144 r.w.s. 148 of the Act. The CIT(A) has accordingly, quashed the re-assessment proceedings and held the assessment order to be invalid. The Revenue is aggrieved by the order of CIT(A), sine the draft assessm .....

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on 153(2) of the Act would not apply. The provisions of section 153(2) of the Act read as under:- 153(2)(1) …. (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served: Provided that where the notice under section 148 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment, reassessment or recompu .....

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rse of the proceedings for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA- (i) was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words one year , the words twenty-one month .....

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orrectly interpreted the said provisions and observed as under:- 3.9 From the above, it is seen that the Appellant s case would fall either under the second proviso or under the fourth proviso of the above Section. Close reading of these provisos would show that fourth proviso grants the time limit of two years from the end of the financial year in which, notice u/s 148 was served for passing the order of re-assessment. This proviso is applicable in a case in which, reference to the TPO u/s 92CA .....

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