TMI Blog2022 (6) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... is not legally sustainable. Undoubtedly, in this case, the assessment order has been passed beyond the time limit prescribed u/s. 144C(13) being more than one month after the date of receipt of the directions of the DRP by the AO, as per the information provided in the paper book submitted by the assessee's counsel. The factual veracity of these dates has not been disputed by the Revenue. In this view of the matter, we agree with the contention that the order passed by the AO is void ab initio and liable to be quashed as the final assessment order is time barred. Appeal of assessee allowed. - SA No. 121/Del/2022 in ITA No. 928/Del./2022 and ITA No. 928/Del./2022 - - - Dated:- 16-6-2022 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER And SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ASSESSEE BY : SHRI NAGESHWAR RAO, ADVOCATE SHRI S. CHAKARBORTY, ADVOCATE REVENUE BY : SHRI SURENDER PAL, CIT DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of the Assessing Officer dated 06.04.2022 passed under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income-tax Act, 1961 (for short 'the Act') pursuant to the directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the Act, therefore there existed no question of claiming tax depreciation on such amount. B. Notional income on security deposits amounting to INR 47,67,516 2.5 On the facts and in the circumstances of the case and in law, the learned AO and DRP have erred in not appreciating that out of the disallowance of INR 19,11,08,847, an amount of INR 47,67,516 pertains to deduction claimed by the Appellant of notional interest income on security deposit placed with the owner/lessor, credited to Profit and Loss Account during the subject AY per the Ind-AS mandate, hence required to be excluded while computing taxable income as per the Act. 2.6 On the facts and in the circumstances of the case and in law, the learned DRP has erred in alleging that the Appellant has not stated anything specific regarding disallowance of deduction claimed on account of security deposit. C. Actual payment on account of lease rent amounting to INR 2,86,37,817 2.7 On the facts and in the circumstances of the case and in law, learned AO and DRP have erred in not appreciating that out of the disallowance of INR 19,11,08,847, an amount of INR 2,86,37,817 pertains to actual payment on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of outstanding receivables as unsecured loan advanced to AEs; 3.3.3 Imputing interest on outstanding receivable to its AE ignoring the fact that the Appellant is a debt-free company; 3.3.4 Without prejudice to the Ground No. 3.3.1, 3.3.2 and 3.3.3 above, the learned TPO/AO/DRP have failed to appreciate that the weighted average period of realization is below the period agreed under the inter-company agreement; 3.3.5 Without prejudice to the Ground No. 3.3.1, 3.3.2 and 3.3.3 above, the learned AO/TPO/DRP have failed to appreciate that even if interest needs to be charged on the receivables, 90 days (as mentioned under Section 92CE of the Act) should be considered to establish arm's length interest. 3.3.6 Without prejudice to the Ground No. 3.3.1, 3.3.2 and 3.3.3 above, the Learned AO/TPO/DRP have failed to appreciate that even if interest needs to be charged on the receivables, the average receivable days of comparable companies selected by the Learned DRP/TPO, should be considered to establish arm's length interest. 4. Ground No. 4-That on the facts and in the circumstances of the case and in law, the learned AO has erred in initiating penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paper book submitted before us stated that the assessee has obtained information regarding passing of order by the DRP and its dispatch to the AO. The DRP decision in this case is dated 10.01.2022. Vide paper book page Nos. 230 231, Ld. counsel submitted that assessee has obtained information that the said DRP order was dispatched to all the concerned persons including the AO on 24.01.2022. Thereafter, vide paper book page Nos. 232 to 235, Ld. counsel of the assessee has submitted that track consignment report as per the Postal Department and according to the said track consignment, the deliver was confirmed on 27.01.2022. In this background, it is the submission of the Ld. counsel that AO has received the order on 27.01.2022 and as per mandate of section 144C(13), the AO was required to pass the final order within one month from the end of the month in which such action was received. Hence, as per Ld. counsel of the assessee, since the AO has received the DRP's directions on 27.01.2022, it was incumbent upon him to pass the assessment order by 28.02.2022. Since the assessment order has been passed on 06.04.2022 the same is time barred. 7. Per contra, Ld. DR for the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end of the month in which,-- (a) the acceptance is received; or (b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:-- (a) draft order; (b) objections filed by the assessee; (c) evidence furnished by the assessee; (d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and (g) result of any enquiry made by, or caused to be made by, it. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),-- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te resolution panel, so as to impart greater efficiency, transparency and accountability by-- (a) eliminating the interface between the dispute resolution panel and the eligible assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a mechanism with dynamic jurisdiction for issuance of directions by dispute resolution panel. (14C) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (14B), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, [2024]. (14D) Every notification issued under sub-section (14B) and sub-section (14C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] (15) For the purposes of this section,-- (a) Dispute Resolution Panel means a collegium comprising of three Princ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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