TMI Blog2020 (1) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... re concerned, learned Senior Counsel for the petitioner points out that the issue relating to deduction under Section 80IA stands covered by a decision of the learned Single Judge of this Court in the case of this very assessee that has attained finality. Thus the question of deduction under Section 80IA has been decided in favour of the assessee. Going by the purport of Section 80 IB, on the admitted facts as to the date of commercial production, there could be no denial of the relief. The procedure inserted is substantive, in that it offers a new scheme of assessment to a distinct class of assessees, that is, those assessee whose assessments involve the issues of Transfer Pricing and determination of Arms Length Price. The provisions of Section 144C do not, thus merely prescribe procedure but a substantive exercise in assessment. Where there is a change in the form of assessment itself, such change is not a mere deviation in procedure but a substantive shift in the manner of framing an assessment. A substantive right has enured to the parties by virtue of the introduction of Section 144C, that, bearing in mind the settled position that the law applicable on the first day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not by way of sale to third parties and as such cannot be treated as profit derived, as contemplated in terms of Section 80IA. (ii) As far as the claim under Section 80IB was concerned, the Assessing Authority took the view that the claim related to the 10th year of the relevant unit, i.e., Chinchpada Unit, and hence was liable to be disallowed. (iii) The claim under Section 10B was partly allowed. The disallowance related to the export of copper cathode, which according to the Assessing Authority, did not qualify for deduction under Section 10B, as no new product had emerged from the process undertaken by the petitioner. The Officer opined that copper Anode and copper Cathode being inputs and outputs respectively were one and the same thing and thus the petitioner would thus not be eligible for deduction under Section 10B. The deduction as claimed, was granted only to the extent of production of copper rod. 4. Before going into the matter on merits, I proceed to deal with the preliminary submission in regard to the assumption of jurisdiction by the Assessing Authority. 5. This point has been raised by way of a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarification that has been relied upon by the Department in the counter to the Supplementary affidavit filed is incorrect in its appreciation and interpretation of the settled position of law. 10. He also relies on the judgments of the Supreme Court in J.K.Synthetics Ltd. and others V. Central Board of Direct Taxes and others (83 ITR 335) and Commissioner of Income Tax, Bangalore V. R.Sharadamma ((1996) 8 SCC 388) as well as a decision of the Division Bench of the Madras High Court in the case of Commmissioner of Income Tax V. Prasad Productions (P) Ltd. (179 ITR 147) to bring home the point that, by insertion of Section 144C a new procedure is sought to be inserted in the Income Tax Act and the scheme of assesssment itself stands changed as it vests authority to carry out the assessment, in a completely different forum. Thus, the new provision, according to him, does not merely bring about a procedural change, but also a substantive change that cannot, under any circumstances, be retrospective, but only prospective, as a vested right of the assessee stands amended by virtue of the provision inserted. 11. According to him, the impugned draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment would be liable to be set aside. Thus, according to him, reference to Section 144C by the Assessing Authority in the present case is proper. 14. Submissions on merits have also been made by the learned counsels on both sides. 15. As far as Chapter VIA deductions are concerned, learned Senior Counsel for the petitioner points out that the issue relating to deduction under Section 80IA stands covered by a decision of the learned Single Judge of this Court in the case of this very assessee in W.P.No.7400 of 2008 (decision dated 30.09.2010), that has attained finality. Thus the question of deduction under Section 80IA has been decided in favour of the assessee. 16. The second aspect of deduction under Section 80IA is also covered by a decision of the learned Single Judge in the assessees' own case in W.P.Nos.24476 to 24478 of 2009 (dated 19.12.2011), wherein, at paragraph nos.21 to 27 the learned Single Judge holds as follows: ' 22. It is an admitted fact that the assessee herein has eligible industrial undertakings, one at Chinchpada Unit (CCR Refinery) at Silvassa in the Union Territory of Dadra and Naha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction or refining of mineral oil referred to in sub-section (9), means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil; 26. Going by the above definition that the criteria for determining the period of deduction and the percentage of deduction is based on the industrial undertaking beginning to manufacture or produce things, I do not find any legal basis in the contention of the Revenue that the relief has to be worked out from the date of the licence. It may be noted that getting a licence to set up an industrial undertaking is a stage anterior to the commencement of production and hence, the date of licence and the date of commercial production cannot be a simultaneous happening. In the circumstances, I hold that the very basis for initiating the reassessment proceedings suffers from legal infirmity arising from the wrong understanding of a clear provision under Section 80 IB of the Act. On the admitted fact as regards the date of the licence and the date of commercial production, the relief granted from the initial assessment year taken from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will have to be undertaken only by the Assessing Officer, subject to my conclusion on the aspect of jurisdiction. 19. Coming to the aspect of assumption of jurisdiction under Section 144C, the provisions of Section 144C inserted by Finance (No.2) Act, 2009 set out a new and distinct scheme of assessment separate from regular assessment. The object of insertion of Section 144C has been explained in the Explanatory notes to Finance (No.2) Act, 2009 as follows: '45. Provision for constitution of alternate dispute resolution mechanism 45.1 The dispute resolution mechanism presently in place is time consuming and finality in high demand cases is attained after long drawn litigation till Supreme Court. In order to address the concern of the multinational companies and to provide mechanism for speedy disposal of their cases so as to attain finality, a new section 144C is inserted in the Incometax Act to facilitate expeditious resolution of disputes. 45.2 The salient features of the alternate dispute resolution mechanism are as under:- ..... 45.5 Applicability - These amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys either file acceptance of the variations or objections to the same before DRP. Sub-section (3) states that the Assessing Officer shall complete the assessment on the basis of the draft order, if the assessee intimates acceptance of the variations to him or if no objections are received within 30 days. Sub-section (4) states that, in any event, the Assessing Officer shall complete the assessment by way of final order of assessment to be passed within one month from the end of the month in which either acceptance from the assessee is received, or the period of filing of objections expires. Sub-section (5) onwards deal with the hearing of the objections before the DRP and sub-section (10), states that every direction issued by the DRP shall be binding on the Assessing Officer. Sub-section (13) thereafter states that upon receipt of the directions of the DRP, the Assessing Authority shall pass an order of assessment in conformity with the directions issued. Thus by virtue of insertion of Section 144C, the legislature has put in place a distinct, new scheme of assessment in regard to a specified class of assessees. 24. The question as to whether the amendment or chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords: It may be stated at the outset the general principle is that a law which brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown. One of the modes by which such an intention is shown is by making a provision for change over of proceedings from the court or the Tribunal where they are pending to the court or the Tribunal which, under the new law, gets jurisdiction to try them. 7. The Court then observed that once a reference was validly made to the Inspecting Assistant Commissioner he did not lose the jurisdiction to deal with the matter on account of the aforesaid Amendment Act. It pointed out that the Amending Act does not does not contain any provision that the references validly pending before the Inspecting Assistant Commissioner should be returned without passing any final order if the amount of income in respect of which the particulars have been concealed did not exceed Rupees twenty five thousand. The said circumstance, it held, supported the inference drawn by the Court that the Inspecting Assistant Commissioner continued to have jurisdiction to impose penalty. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, the benefit of such Circular cannot be withdrawn at a later date, so as to deny the assessee the benefit extended earlier. Though in the present case there is no benefit as such that is in question, there is a substantively procedural right that has enured to both parties as on 01.04.2009 that relates to assessments for A.Y.2010-11 onwards. The relevant portion of the 2013 Circular reads thus: 'Para 45.5 of the Circular No.5/2010 dated 03.06.2010 reads as under: 45.5 Applicability: These amendments have been made applicable with effect from 1st October, 2009 and will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years. The Dispute Resolution Panel Rules have been notified by S.O. No. 2958 (E) dated 20th November, 2009. In the above extracted Para 45.5 there has been an inadvertent error in stating the applicability of the provisions of section 144C inserted vide Finance (No.2) Act, 2009 that amendments will apply in relation to the assessment year 2010- 11 and subsequent assessment years. Accordingly, para 45.5 is replaced with the following: 45.5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
