9911796707
TMI Blog2024 (12) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... s & twin stay petition are identical, on the request of rival parties, for the sake of brevity these appeals & twin stay petitions are heard together for a common and consolidated order. 3. Succinctly stated facts anent to IT(TP)A 142/LKW/2022 are that; 3.1 The assessee engaged in manufacturing of sugar, generation of power, molasses, bagasse and other residual by-products etc. The return of income [in short 'ITR'] filed by the assessee declaring total income Rs.65,60,95,950/- was in first instance processed summarily u/s 143(1) of the Act. The case later was selected for complete scrutiny by service of notice dt. 10/08/2018 u/s 143(2) of the Act. In view of specified domestic transactions entered by the assessee with its associate enterprises [in short 'AE'] the Ld. AO made a reference to Ld. Transfer pricing Officer [in short 'TOP'] u/s 92CA(1) of the Act for determining the Arm's Length Price [in short 'ALP'] in relation to such referred domestic transactions entered by the assessee with its AE. 3.2 On a reference, the Ld. TPO vouched that, the power-co-generation unit is eligible for deduction u/s 80IA of the Act and steam being a by-product which is generated due to product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 144 C (13) of the Act as the assessment order was neither signed, nor uploaded on income tax portal nor despatched to the assessee till the limitation period of 31" May 2022. 3. The learned AO has erred in law and on facts in not allowing the credit of MAT available u/s 115 JAA of the Act. 4. Such other relief or ground which may crave in during the proceedings and deem fit by the hon'ble tribunal. 6. At the outset, adverting to grounds the Ld. AR Mr Gupta submitted that, on earlier occasion the appellant had withdrawn ground number 2, confirming the same the appellant not pressing it for adjudication. Further next alluding to ground number 4, the Ld. AR averred that, for a technical reason the certificate from chartered engineers / cost accountant could not be submitted before the Ld. DRP. In its absence the Ld. AO determined the ALP applying CPM method having regard to capacity utilization & indirect cost apportioned. This determination of ALP is however not in conformity with the well accepted proposition and also not a good law. It is also submitted that, since the certificate is now available on record which can rest the dispute over ALP conclusively in line wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act is a code in itself which deals with the powers of the DRP and procedures to be followed in settling the dispute referred to it. Without reproducing the said provision in verbatim it shall purpose to state that; (a) Where the objections against draft order is filed by the assessee, the DRP has to issue directions to the AO so as to enable him to complete the assessment; (b) Such directions can be given after considering the various factors which have been elaborated in s/s (6); (c) Power to make enquiry, before issuing any directions, has been provided to the DRP in s/s (7); (d) The DRP, while issuing directions to AO, either confirm, reduce/delete or enhance the variation proposed by TPO. However, the DRP does not have any power to set aside any proposed variation or issue any fresh direction for further enquiry etc., i.e., the DRP's direction should cease the dispute; and finally (f) The direction issued by the DRP since binding on AO therefore is obligated to pass the final assessment order in conformity with such direction but without further opportunity to the assessee. Thus, the statute provided sufficient power to DRP for considering all the material placed befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter verification of costing method / technical computation along-with audited accounts if they are found in agreement with the then delete the upward adjustment proposed and (b) in such certificate from chartered engineer or cost accountant is not made available, then compute the ALP of cost of steam under cost plus method without markup applied by the assessee having regards to utilised capacity and apportionment of indirect costs on the basis material placed on records by the assessee. 13. The former directions of the Ld. DRP led to setting-aside the variation/upward adjustment made by Ld. TPO and further empowered the Ld. AO to determine the ALP on the basis of method & manner suggested by it. This Ld. DRP's direction in our considered view is a clear-cut violation of section 144C(8) of the Act. Further the determination of ALP by the Ld. AO following the direction of Ld. DRP is also irregular and cannot be given effect. This is for the simple reason that, once the original direction itself has been held to be without jurisdiction and hit by the doctrine of 'coram non judice', there would be no question of upholding the subsequent action of determination of ALP merely on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the irregularity has crept in. Such an order is always amenable to correction from the stage from where it went wrong. 17. Here, in the present twin cases, on a perusal of the order of the Ld. DRP, it is apparently evident that insofar as the issue of determination of ALP is concerned, they have expressed their opinion, however, they have ultimately left it to the Ld. AO to decide the issue on the basis of certificate from chartered engineer / cost accountants or determine the ALP following CPM method after taking into consideration the capacity utilization and apportionment of indirect cost etc. Thus, instead of deciding the dispute conclusively and clearly adjudicating the issue brought before it, the matter has been delegated to the Ld. AO which is impermissible under the statute. Consequently, the final assessment order passed in pursuance of such irregular direction also rendered irregular. 18. In 'GE India Technologies Pvt. Ltd. Vs DRP [in WP 1010 of 2011 dt. 05/07/2011] the Hon'ble Karnataka High Court has categorically held that, the DRP do not have any power to look beyond the variation/adjustment proposed by the Ld. TPO. Therefore, it was duty bound to dispose-off ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
