TMI Blog2021 (6) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... ttracted for completing the assessment. On perusing the records, it is noticed that the petitioner has wholeheartedly participated in the proceedings before the 2nd respondent/Transfer Pricing Officer pursuant to the reference made on 17.02.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Before the 2nd respondent/Transfer Pricing Officer also no objection was raised by the petitioner regarding limitation. After, the 2nd respondent/Transfer Pricing Officer passed a Transfer Pricing Order dated 30.10.2009 under Section 92CA (2) of the Income Tax Act, 1961, the petitioner was also issued with a Show Cause Notice dated 23.11.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Even before the 3rd respondent, before the Draft Assessment Order was passed on 31.12.2009, the petitioner did not raise any objection regarding limitation. It is for the first time before the 1st respondent/Dispute Resolution Panel, the Petitioner raised the objection regarding the limitation to proceed with the assessment for the first time which has been rightly overruled by the 1st respondent/Dispute Resolution Panel. Therefore, it is not open for the petitioner to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required before making a reference to the TPO. The CIT after considering the subject mater accorded his approval vide letter dated 18/11/2008 to the A.O., therefore, the process for Transfer Pricing Audit u/s. 92CA had commenced. The A.O therefore, submitted that the communication dated 17/02/2009 by the A.O to the TPO is merely a formality and is not a fatal defect in the procedure, hence, the assessment is not barred by limitation of time. 2.4 We have carefully considered the facts of the case, written submissions of both the parties and we have also examined the case records, more particularly the A.O-s letter dated 11/11/2008 addressed to the CIT for seeking the previosu approval as required u/s. 92CA and the CIT-s letter dated 18/11/2008 addressed to the A.O conveying the necessary approval for initiating the TP Audit in this case by the TPO. On appreciating these facts we have come to this conclusion that once the CIT accorded on 18/11/2008 his approval after proper application of mind and directed the A.O to get the TP Audit done by the TPO, the A.O-s letter dated 17/02/2009 was an internal correspondence between the A.O and the TPO. Therefore, as on 18/11/2008, when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Vs Shreyans Industries Limited and others, (2016) 4 SCC 769. The learned counsel for the petitioner drew the comparision between Section 153 of the Income Tax Act, 1961 and Section 11 of the Punjab General Sales Tax Act, 1948 and submitted that in absence of a provision giving powers to extend the period of limitation under Section 153 of the Income Tax Act, 1961, as in Section 11(10) of the Punjab General Sales Tax Act, 1948, the impugned order passed by the 1st respondent/Dispute Resolution Panel was liable to be interfered with. 7. The learned counsel for the petitioner further submitted that, in taxing matters, the provisions have to be read in the manner in which they appear. Therefore it was not open for the respondents to proceed with the assessment beyond the period of limitation merely because an approval was obtained on 18.11.2008. 8. It is submitted that the reference made on 17.02.2009 was clearly time barred as the time for making the assessment/completing the assessment under Section 153 of the Income Tax Act, 1961 had already expired on 31.12.2008. 9. In support of the present writ petition, learned counsel for the petitioner has relied on the following d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Alstom Projects India Limited, ITA No.362 of 2014 (xxxiv) CIT Vs JK Charitable Trust, (2009) 1 SCC 196 (xxxv) Nokia India Private Limited Vs Additional Commissioner of Income Tax and Ors., (2018) 301 CTR (Del) 665 (xxxvi) Javer Jivan Mehta Vs Assistant Commissioner of Sales Tax (Appeals), VIII Circle and Ors, [1998]111 STC 199 (Guj) (xxxvii) Savitri Rani Malik Vs Commissioner of Income Tax, (1991) 93 CTR (Gau) 163 (xxxviii) T.N.Dadha Pharmaceuticals Vs Collector of Central Excise, Madras, AIR 2003 SC 1556 (xxxix) MIOT Hospitals Ltd., Vs The State of Tamil Nadu and Ors., [2020] 78 GSTR 299 (Mad) (xxxx) Peeru Lal, Mohan Lal Vs Commissioner of Income-tax, [2002] 124 Taxman 316 (Rajasthan) (xxxxi) ACIT Vs Hotel Blue Moon, [2010] 188 Taxman 113 (SC) (xxxxii) CIT Vs Gitson Engineering, [2015] 53 taxmann.com 108 (Madras). (xxxxiii) CWT Vs Sona Properties Ltd., (2008) 216 CTR 217 (Bombay) (xxxxiv) Alamelu Veerappan Vs ITO, W.P.No.30060 of 2017 10. In particular, a reference was made to the decision of the Income Tax Appellate Tribunal in Dongfang Electric Corporation Vs Deputy Commissioner of Income Tax vide order dated 25.10.2017 in I.T.A.No.572/Kol/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unication was sent to the Commissioner of Income Tax for getting appropriate approval to make a reference to the 2nd respondent/Transfer Pricing Officer. 17. It is further submitted that the approval was also granted by the Commissioner of Income Tax on 18.11.2008 and it is pursuant to the aforesaid approval, a reference was made to the 2nd respondent/Transfer Pricing Officer on 17.02.2009. 18. Before proceeding further with, it will be useful to refer to Section 153(1) of the Income Tax Act, 1961. Same is reproduced below:- “153. Time limit for completion of assessments reassessments. (1) No order of assessment shall be made under Section 143 or Section 144 at any time after the expiry of- (a) two years from the end of the assessment year in which the income was first assessable; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of Section 139; whichever is later:] Provided that in case the assessment year in which the income was first assessable in the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plate that a reference to a Transfer Pricing Officer should also has to be made before the expiry of 21 month. It merely extends the time limit for completing the assessment by another 12 months, if during the course of assessment, an assessing officer desires a reference has to be made to a Transfer Pricing Officer. Thus, under those circumstances, assessment has to be completed within 33 months from the end of the assessment year in which the income became assessable. 25. There are no restriction under the provisions of the Income Tax Act, 1961 on an Assessing Officer to make reference within a period of 21 months from the end of the assessment year in which the income became assessable where there are transaction with associated enterprises/related persons attracting Chapter X of the Income Tax Act, 1961. 26. Such reference to a Transfer Pricing Officer has be with the previous approval of the Principal Commissioner or the Commissioner as the case may be. In this case, the reference was made with the approval of the Commissioner. 27. Even in the explanatory notes to the provisions of the Finance Act, 2007 which was circulated by the Central Board of Direct Taxes vide Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 25.10.2017 in I.T.A.No.572/Kol/2014 in I.T.A.No.487/Kol/2015. 31. In State of Punjab and others vsShreyans Industries Limited and others, (2016) 4 SCC 769, the last dates for completing the assessment had expired on 30.04.2004, 30.04.2005, 30.04.2006 and 30.04.2007 and provisions for extending the time for reopening the assessment under Section 11(10) of the Punjab General Sales Tax Act, 1948 , long after the expiry of three years. 32. There, the Court noted that for Assessment Year 2000-2001, order of extension was passed more than three years after the last date and for Assessment Year 2001-2002. It was more than two years after the last date and therefore upheld order of the High Court. 33. The Court held that when the last date of assessment expired, it vested a valuable right in the assessee which cannot be lightly taken away. As a consequence, sub-section (11) of Section 10 has to be interpreted in the manner which is equitable to both the parties. 34. As different considerations are applicable under the different enactments, the ratio laid down by the Hon-ble Supreme Court in the case of State of Punjab and others vsShreyans Industries Limited and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2nd respondent/Transfer Pricing Officer pursuant to the reference made on 17.02.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Before the 2nd respondent/Transfer Pricing Officer also no objection was raised by the petitioner regarding limitation. 39. After, the 2nd respondent/Transfer Pricing Officer passed a Transfer Pricing Order dated 30.10.2009 under Section 92CA (2) of the Income Tax Act, 1961, the petitioner was also issued with a Show Cause Notice dated 23.11.2009 by the 3rd respondent/Additional Commissioner of Income Tax. 40. Even before the 3rd respondent, before the Draft Assessment Order was passed on 31.12.2009, the petitioner did not raise any objection regarding limitation. 41. It is for the first time before the 1st respondent/Dispute Resolution Panel, the Petitioner raised the objection regarding the limitation to proceed with the assessment for the first time which has been rightly overruled by the 1st respondent/Dispute Resolution Panel. 42. Therefore, it is not open for the petitioner to challenge the jurisdiction of the 3rd respondent/Additional Commissioner of Income Tax to refer to the 2nd respondent/Transfer Pricing Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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