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TMI Blog2018 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2012-13 on 20.11.2012. The said return of income was selected for scrutiny and matter was also referred to the TPO for determination of arm's length price for the international transaction entered into by the assessee with its AE. In the transfer pricing assessment TPO suggested certain adjustments which was incorporated by the A.O. and draft assessment order was passed, thereby making an upward adjustment of Rs. 56.07 crores which was mainly on account of international transaction pertaining to the following:- Contract manufacturing segment : INR 556,075,740 Provision of business support services: INR 2,278,671 Reimbursement for registration of product: INR 1,872,637 Reimbursement for wound care services: INR 486,275 4. Against the said draft assessment order, the assessee filed its objection before the DRP in terms of the provision of section 144C (2) on 29th April, 2016. The DRP issued directions to the A.O. vide order dated 18th October, 2016, giving certain directions to the A.O. on account of adjustments to be made and in pursuance of such direction, final assessment order dated 30.11.2016 was passed u/s 143(3) r.w.s. 144C(13) at an income of Rs. 89. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been passed, instead final assessment order has been passed, then such an order is nullity in the eyes of law. In support, he placed reliance on the judgment Turner International India (P.) Ltd. v. Dy. CIT [2017] 398 ITR 177 and also judgment of Hon'ble Delhi High Court in the case of JCB India Ltd. v. Dy. CIT [2017] 398 ITR 189. In the later judgment, Hon'ble High Court was required to adjudicate the following substantial question of law:- "14. The short question that arises for consideration is whether, after the remand proceedings, the AO could have, without issuing a draft assessment order under section 144 C of the Act, straightway issued the final assessment order." Hon'ble High Court had quashed the final assessment order after observing and holding as under:- "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 exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order "without jurisdiction, null and void and unenforceable." In that case, the consequent demand notice was also set aside. The decision of the Andhra Pradesh High Court was affirmed by the Supreme Court by the dismissal of the Revenue's SLP (C) [CC No. 16694/2013] on 2ih September, 2013. 13. In Vijay Television (P) Ltd. v. Dispute Resolution Panel [2014] 369 ITR 113 (Mad.), a similar question arose. There, 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 5:N.C ET Compag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantive rights to the assessee to object to any additions before they are made and such objections have to be considered not by the Assessing Officer but by the DRP. Interestingly, once the DRP gives directions under sub-section (5) of Section 144C, the Assessing Officer is expected to pass the order of assessment in terms of such directions without giving any further hearing to the assessee. Thus, at the level of the Assessing Officer, the directions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in consequence of remand by the Tribunal. Thus, if the assessment is not routed through DRP, then the appeal has to be filed before the appropriate authority which is Ld. CIT (A). It is only when assessee or department is aggrieved by the order of the Ld. CIT (A), the appeal will lie before this Tribunal in terms of section 253. Thus, he submitted that at the threshold only, appeal filed by the assessee is non- maintainable and infructuous as the proper course opened to the assessee is to file first appeal before the Ld. CIT (A). 8. We have gone through the aforesaid facts and background of the case as well as the objection raised by the Ld. CIT-DR with regard to the very maintainability of the appeal before the Tribunal. As stated above, in present case the appeal has not been filed against the final assessment order which has been passed in pursuance of the directions given by the DRP in terms of sub section (13) of section 144C. Section 253(1) (d) provides that the order passed by the A.O. in pursuance of directions of DRP can be filed before the Tribunal. Similarly in section 246A (1) (a), exception has been carved out for the filing of the appeal before CIT (A) against an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condly, assessee has other constitutional remedy before the Hon'ble High Court under extra ordinary jurisdiction, of course with the discretion of Hon'ble Court. If an assessment order has been passed post remanding back by the Tribunal, then appeal will lie to the appropriate authority/ forum and the Tribunal does not have any jurisdiction to entertain an appeal which is not provided under the statute. In other words, right or wrong, if an assessment order has been passed, the remedy to rectify such a wrong has to be by filing of appeal before the appropriate authority empowered under the Act. The statute clearly envisages that the appeal before the Tribunal can be filed against those assessment orders which has been passed in pursuance of DRP's direction and not otherwise. That is, not against the final assessment order even though it could not have been passed under the law. One very important aspect which can be deduced from the aforesaid judgments of the Hon'ble High Court is that, the Court have held that when the matter in the appeal before the Tribunal has been set-aside or remanded back to the file of AO, the AO has to resort to the same procedure of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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