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Himalayan Drug Co. Versus Deputy Commissioner of Income-tax, Central Circle 1 (1) , Bengaluru

2017 (8) TMI 409 - ITAT BANGALORE

Effect of assessment order passed by the AO u/s 144C(13) beyond the period prescribed - Held that:- From the plain provisions of section 144C of the Act, we are of the considered opinion that the proceedings cannot be declared as null and void simply because the AO passed the assessment order beyond the period prescribed there under. In the circumstances, grounds relating to limitation, raised by the assessee-company are dismissed - IT (TP) APPEAL NO. 807/Bang/2016 - Dated:- 21-6-2017 - VIJAY PA .....

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the case are as under: The appellant is a partnership firm engaged in the business of manufacture and sale of herbal pharmaceutical products, consumer/personal care products and animal health care products. The return of income for the assessment year 2011-12 was filed declaring income of ₹ 38,58,85,630/-. The case was selected for scrutiny assessment by issue of notice u/s 143(2) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] dated 6/8/2012. During th .....

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d on the assessee on 31/3/2015. 3. The assessee filed objections before the Hon'ble Dispute Resolution Panel (DRP) contesting the ALP adjustment. The Hon'ble DRP gave directions under sub-section (8) of section 144C of the Act on 17/12/2015 which was received by the AO on 29/12/2015. The final assessment order was passed by the AO on 18/2/2016. 4. Being aggrieved, the assessee is in appeal before us raising as many as 14 grounds of appeal. The assessee raised a preliminary ground that th .....

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were received by the AO on 29/12/2015 as stated by him vide para.3.4 of his assessment order. Therefore, the AO was required to pass final assessment order on or before 31/01/2016 whereas in the present case, final assessment order was passed by the AO on 18/2/2016 which is clearly beyond the period prescribed under the provisions of sub-section (13) of section 144C of the Act. Then the issue that requires adjudication is what is the effect of the assessment order, passed by the AO under sub- se .....

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44C particularly, it is clear that it is not a jurisdictional issue as sub-section (13) to section 144C clearly provides that the AO has no discretion while passing the assessment order under sub-section (13) of sec.l44C except to follow the directions of the Hon'ble DRP. The said section further provides that the AO need not provide an opportunity of being hearing to the assessee. The fate of proceedings initiated u/s 143(2) r.w.s.l44C of the Act is well known to the assessee, as the Hon .....

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Court in the case of Thirumalai Chemicals Ltd. v. Union of India [2011] 11 taxmann.com 204 has held that limitation provisions are only procedural in nature unless they go to the root of the matter, it does not create any substantive right. The Hon'ble Andhra Pradesh High Court in the case of Rain Cements Ltd. v. Dy.CIT [2017] 392 ITR 253 held that the provisions of sub- section (12) of section 144C of the Act do not go to root of jurisdiction on DRP to pass the order. The relevant paragraph .....

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12) would expire by 31-5-2015. But the DRP passed an order on 22-6-2015 holding that it had lost jurisdiction to pass an order on 31-12-2014 itself Even though the date mentioned is not correct, the fact remains that the DRP could not have issued any direction after 31-5-2015, even on undisputed facts. 41. The question that then arises is as to whether this Court can now issue a direction to the DRP to consider the matter on merits and pass an order. 42. While construing the provisions relating .....

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) is mandatory that goes to the root of the jurisdiction of the DRP to pass an order. If what is prescribed by sub-section (12) is a jurisdictional issue, then the Court cannot ask the DRP to do something for which they have no jurisdiction. 43. But the bar under sub-section (12) of Section 144C does not appear to be one that goes to the root of the jurisdictional issue. The reasons are two-fold. The first is that as per the scheme of Section 144C, the DRP is constituted as an alternative mechan .....

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