TMI Blog2024 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... quashing of the assessment order passed by the Ld.AO - Decided in favour of assessee. - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Sri M.V. Prasad, AR For the Revenue : Dr. Satyasai Rath, CIT-DR ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER : All the captioned appeals are filed by the assessee (M/s. Polisetty Somasundaram Global Limited) against the respective orders of the Ld. Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in DIN Order No. ITBA/APL/S/250/2023-24/1054340379(1); ITBA/APL/S/250/2023-24/1054335213(1); ITBA/APL/S/250/2023-24/ 1054340840(1); ITBA/APL/S/250/2023-24/1054351755(1); ITBA/APL/ S/250/2023-24/1054351755(1); ITBA/APL/S/250/2023-24/10543521 13(1) ITBA/APL/S/250/2023-24/1054354407(1) dated 13/07/2023 14/07/2023 arising out of the orders passed U/s. 153C of the Income Tax Act, 1961 [the Act] for the AYs 2013-14, 2014-15, 2015-16, 2017-18, 2019-20 2020-21 respectively. Since the assessee has raised the identical grounds in all the appeals, they are clubbed, heard together and disposed off in this consolidated order. Considering the simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraphs. ITA No.245.Viz/2023 (AY: 2013-14) 4. Briefly stated the facts of the case pertinent to the AY 2013-14 (ITA No.245.Viz/2023) are that the assessee - M/s. Polisetty Somasundaram Global Limited - is registered as a Foreign Company in the year 2012 with the Registrar of Companies, ROK, UAE as International Business Companies (IBC). The Registered Address as per the incorporation Certificate is PO Box 50592, Hamriya FZ, Sharja, UAE. A search and seizure operation U/s. 132 of the Act was conducted on M/s. Polisetty Somasundaram Group, Guntur, Andhra Pradesh on 28/01/2020. As a part of search operations conducted U/s. 132 of the Act, the business premises and residence of Shri Polisetty Sham Sundar was also covered and search was conducted. The case was centralized to DCIT, Central Circle-1, Guntur vide order U/s. 127 of the Act issued by the CIT (International Taxation Transfer Pricing), Hyderabad vide F.No. CIT(IT TP)/40/127/2020-21 on 12/03/2021. Consequently, a notice U/s. 153C was issued on 19/01/2022 and served on the assessee. In response, the assessee-company filed its return of income on 14/02/2022 declaring NIL income admitting that Place of Ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax, Circle-2(1), Tirupathi in W.P. No. 5557 of 2012, order dated 21/02/2013 wherein the Hon ble High Court of Andhra Pradesh has categorically held that as per the provisions of section 144C(1) of the IT Act, 1961, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete the assessment.On the contrary, passing the final assessment order without complying this procedure,which is mandatory as per the provisions of section 144C of the Act, is without jurisdiction, null and void. The Ld. AR further submitted that the decision of the Hon ble jurisdictional High Court (supra) was challenged by the Revenue before the Hon ble Supreme Court by way of Special Leave Petition [SLP] and the Hon ble Apex Court vide Special Leave (Civil) CC 16694/2013, dated 27/09/2013 dismissed the SLP. The Ld. AR also further placed reliance on the decision of the ITAT, D Bench, Chennai in the case of Daewon Kang Up Co. Limited vs. Deputy Director of Income Tax, International Taxation-1, Chennai in ITA No. 818/Mds/2015 (AY 2010-11), dated 30.12.2016. The Ld. AR also relied on the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal legal ground in its own appeal in ITA No. 222/Viz/2023 (AY: 2018-19) which was decided by this Bench of the Tribunal in its order dated 15/12/2023. For the sake of reference, the relevant portion of the Tribunal s order dated 15/12/2023 (supra) is reproduced herein below for the sake of reference and brevity: 6. We have heard the rival contentions and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee-company is a Foreign Company within the meaning of the provisions of section 144C(15)(b)(ii) of the Act. Further, the assessee-company is also an eligible assessee as defined in section 144C(15) of the Act. It is the case of the Ld. AO that the Place of Effective Management [POEM] lies in India and hence the assessee shall be subjected to tax in India as per the Indian Income Tax provisions. However, while making the assessment, the Ld. AO has not followed the procedure mandated U/s. 144C of the Act in the case of the assessee. For the sake convenience and immediate reference, we hereby extract below the provisions of section 144C of the Act: Reference to dispute resolution panel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment and passed the Final Assessment Order. Therefore, in our considered view, the Ld. AO has not followed the procedure laid down U/s. 144C(1) of the Act and passed the final assessment order. It was incumbent on the part of the Ld. AO to have passed a Draft Assessment Order to adhere to the mandatory requirement of section 144C(1) of the Act otherwise it would result in invalidation of the final assessment order and the consequent demand and penalty also. As discussed above the Hon ble Jurisdictional High Court in the case of M/s. Zuari Cement Ltd vs. ACIT, Circle- 2(1), Tirupati (supra), the Hon ble jurisdictional High Court of Andhra Pradesh has held as follows: In this view of the matter, we are of the view that the impugned order of assessment dated 23/12/2011 passed by the respondent is contrary to the mandatory provisions of section 144C of the Act and is passed in violation thereof. Therefore, it is declared as one without jurisdiction, null and void and unenforceable . Consequently, the demand notice dated 23/12/2011 issued by the respondent is set-aside. We also find from the submissions made by the Ld. AR that the SLP filed by the Revenue against the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles of natural justice and exercise had to be taken afresh. He submitted that therefore the earlier draft assessment order did not exist and a fresh draft order had to be issued and the failure has vitiated the further proceedings and, therefore, there is no error in the order passed by the Tribunal and there is no question of law arises. Mr. Pardiwala relied upon the decisions in the case of the Dy.CIT v. Control Risks India (P.) Ltd. [SPL(Civil) No.7090 of 2018]; Control Risks India (P.) Ltd. v. Dy. CIT [WP(C) 5722 of 2017 CM No.23860 of 2017 (Stay), dated 27-7-2017]; International Air Transport Association v. Dy. CIT [2016] 68 taxmann.com 246/241 Taxman 249 (Bom); JCB India Ltd. v. Dy. CIT [2017] 85 taxmann.com 155/251 Taxman 143/398 ITR 189 (Delhi) and Turner International India (P.) Ltd. v. Dy. CIT [2017] 82 taxmann.com 125/398 ITR 177(Delhi). xxxxxxxxxx 17. In the case of International Air Transport Association (supra), the Division Bench of this Court has held that the order passed by the Assessing Officer without their being any draft assessment order is illegal and without jurisdiction. The same view has been reiterated in the case of Zuari Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be mandatorily followed with respect to the Foreign Companies. 9. Therefore, in view of the discussion in the foregoing paras, we are of the considered view that the ratio laid down by the Hon ble jurisdictional High Court of Andhra Pradesh (supra) which is affirmed by the Hon ble Supreme Court by dismissing the SLP are binding on us. The facts in the case of M/s. Zurai Cement Ltd (supra) are identical to the issue in the case of the assessee as well as the judgments of the various High Courts cited supra. Thus, we have no hesitation to come to the conclusion that the assessment order passed by the Ld. AO in the case of the assessee is without jurisdiction and in violation of the mandatory provisions of section 144C(1) of the Act and therefore the assessment order passed U/s. 153C of the Act is null and void and unsustainable in law. Accordingly, the legal ground raised by the assessee deserves to be allowed thereby warranting quashing of the assessment order passed by the Ld.AO. It is ordered accordingly. 8. On perusal of the above, we find that there is no change in the facts and circumstances of the case which was decided by the Tribunal in ITA No. 222/Viz/2023 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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