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TMI Blog2017 (9) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in India in the year 1979. AY 2006-07 3. For AY 2006-07, the Petitioner filed its return of income on 19th November 2006, declaring an income of Rs. 214,44,73,701/-. After making a reference to the TPO, since there were international transactions involving the Petitioner-Assessee and its Associated Enterprise ('AE'), the AO passed the final assessment order on 25th October 2010 under Section 143 (3) read with Section 144C of the Act. The returned income was enhanced to Rs. 255,45,21,520/-. 4. In the appeal filed by the Assessee, the Income Tax Appellate Tribunal ('ITAT') set aside the assessment and matter to the file of the Dispute Resolution Panel ('DRP') for a fresh determination after dealing with the objections raised by the Assessee. 5. The DRP concurred with the claim of the Assessee and issued directions dated 22nd December 2011. In pursuance of these directions, the TPO recommended an adjustment of Rs. 38,95,10,668/- by its order dated 23rd December 2011. Thereafter, the AO passed the final assessment order, dated 29th December 2011, in line with the recommendation made by the TPO. Thus, the total income was determined at Rs. 253,39,84,370/-. 6. When the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 2014, the AO sought the comments of the TPO on the issue of transfer pricing adjustment. It is stated that there was complete inaction on the part of the TPO from 14th February 2014 to 10th March 2016. By the letter dated 4th March 2016, the AO called upon the TPO to quantify the transfer pricing adjustment in pursuance to the remand made by the ITAT for fresh adjudication. It was reiterated by the AO that the order of assessment was to be framed latest by 31st March 2016. 12. Notice of the matter was issued by the TPO on 10th March 2016, calling upon the Assessee to present its case. Submissions were made by the Assessee on 17th March 2016, inter alia stating that the proceedings were barred by limitation in light of Section 92CA (3A) read with Section 153 (2A). Thereafter, a second notice was issued by the TPO on 21st March 2016, calling upon the Assessee to file reply on the same day. This was extended to 30th March 2016. In reply to the notice dated 21st March 2016, the Assessee, in its submissions dated 30th March 2016, reiterated that the proceedings were barred by limitation in view of Section 92CA (3A) read with Section 153(2A) of the Act. The TPO then passed separate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms length price "after considering fresh comparables." Since the assessment itself was not cancelled by the ITAT or completely set aside, it is the provisions of Section 153 (3) (ii) of the Act which would apply. Mr Jain submitted that the requirement of passing a draft assessment order under Section 144C was only in the first instance and not after the remand by the ITAT. 17. The Court is unable to agree with the submissions made on behalf of the Revenue by Mr. Jain. Section 144C (1) of the Act is unambiguous. It requires the AO to pass a draft assessment order after receipt of the report from the TPO. There is nothing in the wording of Section 144C (1) which would indicate that this requirement of passing a draft assessment order does not arise where the exercise had been undertaken by the TPO on remand to it, of the said issue, by the ITAT. 18. It was then contended by Mr. Jain that the assessment order passed by the AO should not be declared to be invalid because of the failure to first pass a draft assessment order under Section 144C of the Act. In this regard, reference is made to Section 292B of the Act. 19. As already noted, the final assessment order of the AO stood vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue sought to rectify a mistake by issuing a corrigendum after the final assessment order was passed. Consequently, not only the final assessment order but also the corrigendum issued thereafter was challenged. Following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) and a number of other decisions, the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel (supra) quashed the final order of the AO and the demand notice. Interestingly, even as regards the corrigendum issued, the Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. 14. Recently, this Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India [2016] 388 ITR 383 (Del.), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra), the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel, Chennai (supra) as well as the Bombay High Court in International Air Transport Association v. DCIT (2016) 290 CTR (Bom) 46, came to the same conclusion." 22. In the decision of the Gujarat High Court in C-Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the DRP under sub-section (5) of Section 144C would bind even the assessee. He may of course challenge the order of the Assessing Officer before the Tribunal and take up all contentions. Nevertheless at the stage of assessment, he has no remedy against the directions issued by the DRP under sub-section (5). All these provisions amply demonstrate that the legislature desired to give an important opportunity to an assessee who is likely to be subjected to upward revision of income on the basis of, transfer pricing mechanism. Such opportunity cannot be taken away by treating it as purely procedural in nature." 23. In the present case, just as in Turner International (supra), it is submitted that, at the most, failure to pass a draft assessment order under Section 144C of the Act is a curable defect and that the Court should now delegate the parties to a stage as it was when the TPO issued a fresh order after the remand by the ITAT. 24. This very argument of the Revenue has been negated by the Court in Turner International (supra) where it was observed in paras 15 and 16 as under: "15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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