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TMI Blog2024 (3) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in manufacturing, replicating, marketing and distribution retail software products in India including online cloud based services. The return of income for AY 2018-19 was field by the assessee company on 30.11.2018 declaring total income of Rs. 15,32,17,51,320/- which was later revised on 31.03.2019 only to revise the claim of TDS. The case of the assessee was referred by the ld AO to ld TPO for benchmarking the international transaction of the assessee. The ld TPO passed order u/s 92CA(3) of the Act on 30.07.2021 proposing an arm's length price (ALP) of Rs. 5,25,89,297/- in respect of provision of marketing support services by the assessee referred to its associated enterprises (AE). A draft assessment order u/s 143(3) read with section 144C of the Act was passed by the ld AO on 28.09.2021 determining the total income of the assessee at Rs. 17,19,24,77,160/-. The assessee preferred objections before the ld DRP and the ld DRP disposed of the objections of the assessee by issuing directions u/s 144C(5) of the Act on 25.03.2022 giving partial relief to the assessee. The ld TPO pursuant to the directions of the ld DRP passed an order giving effect on 24.05.2022 reducing the ALP a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer-2, Delhi; Additional/ Joint/ Deputy/ Assistant CIT; Transfer Pricing-2(2)(2), Delhi on 12.04.2022. For the sake of convenience the said letter dated 29.07.2022 issued by ld DCIT, DRP-2, Delhi to assessee is reproduced below:- "GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT DCIT(DRP-2), Delhi (Sec) To. MICROSOFT CORPORATION (INDIA PRIVATE LIMITED 807. NEW DELHI HOUSE, BARAKHAMBA ROAD NEW DELHI NEW DELHI 110001.Delhi India PAN: AAACM5586C Assessment Year: 2018-19 Dated: 29/07/2022 DIN & Letter No : ITBA/COM/F/17/2022-23/1044273933(1) Sir/ Madam/ M/s, Subject: Online service of Orders - Letter Inspection letter - reg- Ref. - Microsoft Corporation India Private limited ('MCIPL' or 'the assessee') PAN: AAACM5586C directions u/s 144C (5) of the Income Tax Act, 1961 issued by Dispute Resolution Panel ('Panel') on 25.03.2022, A.Y - 2018-19. Please refer to your letter dated 22.07.2022 wherein it is requested to confirm the date of dispatch of DRP directions, 2. In this regard, it is informed that Directions of the Dispute Resolution Panel u/s 144 C (5) of the Income Tax Act. 1961 dated 25.03.2022 having Document No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilisation of the resources through economies of scale and functional specialisation; (iii) introducing a team-based exercise of powers and performance of functions by two or more income-tax authorities, concurrently, in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases, with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), 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, 2022." (3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament." 9. In our considered opinion pursuant to the faceless regime introduced by the Govt. of India, National e Assessment Centre becomes Income Tax Authority vested with the powers of issuing notice, transferring the case, framing the assessment etc. Once, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere a request under sub-clause (a) of clause (iv) has been initiated by the assessment unit, the National Faceless Assessment Centre shall serve appropriate notice or requisition on the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit and the assessee or any other person, as the case may be, shall file his response to such notice within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National Faceless Assessment Centre which shall forward the reply to the assessment unit; (vi) where a request,- (a) for conducting of enquiry or verification by the verification unit has been made by the assessment unit under sub-clause (b) of clause (iv), the request shall be assigned by the National Faceless Assessment Centre to a verification unit through an automated allocation system; or (b) for reference to the technical unit has been made by the assessment unit under sub-clause (c) of clause (iv), the request shall be assigned by the National Faceless Assessment Centre to a technical unit through an automated allocation system; (vii) the National Fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment unit; (xiv) where the assessee fails to file response to the notice served under sub- clause (b) of clause (xii) within the time specified therein or within the extended time, if any, the National Faceless Assessment Centre shall intimate such failure to the assessment unit; (xv) the assessment unit shall, after considering the response received under clause (xiii) or after receipt of intimation under clause (xiv), as the case may be, and taking into account all relevant material available on record, prepare an income or loss determination proposal and send the same to the National Faceless Assessment Centre; (xvi) upon receipt of the income or loss determination proposal, as referred to in sub-clause (a) of clause (xii) or clause (xv), as the case may be, the National Faceless Assessment Centre may, on the basis of guidelines issued by the Board,- (a) convey to the assessment unit to prepare draft order in accordance with the income or loss determination proposal, which shall thereafter prepare a draft order; or (b) assign the income or loss determination proposal to a review unit through an automated allocation system, for conducting review of such prop ..... 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(xxv) the National Faceless Assessment Centre shall,- (a) upon receipt of acceptance from the eligible assessee; or (b) if no objections are received from the eligible assessee, within the period specified in sub-section (2) of section 144C, intimate the assessment unit to complete the assessment on the basis of the draft order; (xxvi) the assessment unit shall, upon receipt of intimation under clause (xxv), pass the assessment order, in accordance with the relevant draft order, within the time allowed under sub-section (4) of section 144C and initiate penalty proceedings, if any, and send the order to the National Faceless Assessment Centre; (xxvii) where the eligible assessee files objections with the Dispute Resolution Panel, under sub-clause (b) of clause (xxiv), the National Faceless Assessment Centre shall send such intimation along with a copy of objections filed to the assessment unit; (xxviii) the National Faceless Assessment Centre shall, in a case referred to in clause (xxvii), upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, forward such directions to the assessment unit; (xxix) the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of any liability (including refund) under this Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making faceless assessment, and the term "assessment unit", wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board; (iii) such verification units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification and the term "verification unit", wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board: Provided that the function of verification unit under this section may also be performed by a verification unit located in any other faceless centre set up under the provisions of this Act or under any scheme notified under the provisions of this Act; and the reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other person shall be exchanged exclusively by electronic mode; and (iii) between the National Faceless Assessment Centre and various units shall be exchanged exclusively by electronic mode: Provided that the provisions of this sub-section shall not apply to the enquiry or verification conducted by the verification unit in the circumstances as may be specified by the Board in this behalf. (6) For the purposes of faceless assessment- (i) an electronic record shall be authenticated by- (a) the National Faceless Assessment Centre by way of an electronic communication; (b) the assessment unit or verification unit or technical unit or review unit, as the case may be, by affixing digital signature; (c) assessee or any other person, by affixing his digital signature or under electronic verification code, or by logging into his registered account in the designated portal; (ii) every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of- (a) placing an authenticated copy thereof in the registered account of the assessee; or (b) sending an authenticated copy thereof to the registered email ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant unit, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board; (x) the Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of faceless assessment merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end; (xi) the Principal Chief Commissioner or the Principal Director General, as the case may be, in-charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources; (d) "automated examination tool" means an algorithm for standardised examination of draft orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reduce the scope of discretion; (e) "computer resource" shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (f) "computer system" shall have the same meaning as assigned to it in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (g) "computer resource of assessee" shall include assessee's registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered email address of the assessee with his email service provider; (h) "digital signature" shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (i) "d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e e-mail address available in the electronic filing account of the addressee registered in designated portal; or (ii) the e-mail address available in the last income-tax return furnished by the addressee; or (iii) the e-mail address available in the Permanent Account Number database relating to the addressee; or (iv) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or (v) in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or (vi) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority; (u) "registered mobile number" of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal; (v) "video conferencing or video telephony" means the technological solutions for the reception and transmission of audio-video signals by users at different l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been incorporated in the law to enable the dispatch and receipt of a record in the electronic form to be defined with precision with reference to both time and place." 12. On a cohesive reading of provision of section 130 and 144B of the Act read together with section 13 of the Information Technology Act, 2000, we hold that the moment document is uploaded by the originator (which in the present case ld DRP) on 07.04.2022 in ITBA portal that dispatch from the side of the ld DRP is complete and since the entire documents are uploaded through electronic mode, the same happens seamlessly and accordingly, the receipt of the said document also becomes instantaneously. Hence, the date of receipt of DRP direction also happened on 07.04.2022 itself and the due date in terms of section 144C(13) would start reckoning from that date. Merely, because the NeAC had retained the document receipt from ld DRP in the form of DRP directions for few months in its kitty and the later transfer the same to the assessment unit on 02.05.2022, the due date in terms of section 144C(13) of the Act for framing the final assessment order by the ld AO does not get automatically extended. Hence, we have no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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