Yokogawa India Limited, Bangalore v. Assistant Commissioner of Income-Tax, Bangalore

ITA 1715/BANG/2016 | 2012-2013
Pronouncement Date: 11-03-2021 | Result: Allowed

Appeal Details

RSA Number 171521114 RSA 2016
Assessee PAN AAACY0840P
Bench Bangalore
Appeal Number ITA 1715/BANG/2016
Duration Of Justice 4 year(s) 5 month(s) 11 day(s)
Appellant Yokogawa India Limited, Bangalore
Respondent Assistant Commissioner of Income-Tax, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 11-03-2021
Date Of Final Hearing 09-02-2021
Next Hearing Date 09-02-2021
Last Hearing Date 09-04-2020
First Hearing Date 05-08-2020
Assessment Year 2012-2013
Appeal Filed On 29-09-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. BEENA PILLAI JUDICIAL MEMBER ITA(TP)A NO.1715 & 692/BANG/2016 ASSESSMENT YEAR : 2011-12 & 2012-13 YOKOGAWA INDIA LTD. PLOT NO.96 ELECTRONIC CITY BENGALURU. PAN AAACY 0840 P VS. THE ASST. COMMISSIONER OF INCOME-TAX LTU BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI NAGESHWAR RAO AOVOCATE REVENUE BY : SHRI PRADEEP KUMAR CIT (DR) DATE OF HEARING : 09-02-2021 DATE OF PRONOUNCEMENT : 08-03-2021 ORDER PER BEENA PILLAI JUDICIAL MEMBER PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSEE AGA INST THE FINAL ASSESSMENT ORDER PASSED BY LD. DCIT CIRCLE-1 DATED 28/01/2016 FOR ASSESSMENT YEAR 2011-12 AND FINAL AS SESSMENT ORDER PASSED BY LD. ACIT CIRCLE-1 DATED IS 31/08/20 16 FOR ASSESSMENT YEAR 2012-13 ON FOLLOWING GROUNDS OF APP EAL: PAGE 2 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 ITA NO. 697/B/2016(ASSESSMENT YEAR 2011-12) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW YOKOGAWA INDIA LIMITED ('YOKOGAWA INDIA' OR THE 'COMPANY' OR THE 'APPELLANT') RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL UNDER SECTION 253 OF THE INCOME- TAX ACT 1961 ('ACT') AGAINST THE ORDER PASSED ON 2 8.01 .2016 UNDER SECTION 143 (3) READ WITH SECTION 144 C OF THE INCOME TAX A CT 1961 BY DEPUTY COMMISSIONER OF INCOME-TAX LARGE TAXPAYERS UNIT C IRCLE - 1 BANGALORE ('AO') (HEREINAFTER REFERRED TO AS THE IMPUGNED ORD ER) IN PURSUANCE OF THE DIRECTIONS ISSUED BY DISPUTE RESOLUTION PANEL ('DRI P') BANGALORE UNDER SECTION 144 C (5) DATED 24 NOVEMBER 2015 ON THE FO LLOWING GROUNDS: THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW: 1. THE ORDER OF THE LEARNED AO IS BASED ON INCORREC T INTERPRETATION OF LAW AND THEREFORE IS BAD IN LAW. 2. THE LEARNED AO HAS ERRED IN ASSESSING THE TOTAL INCOME AT RS. 46 19 68 010!- AS AGAINST RETURNED INCOME OF RS.37 76 59 670/- COMPUTED BY THE APPELLANT AND HAS THUS ERRED IN COMPUTING THE T OTAL TAX PAYABLE (INCLUDING SURCHARGE AND CESS) BY THE APPELLANT AS RS. 3 68 85 910/-. 3. THE LEARNED AO HAS ERRED IN LEVYING INTEREST UN DER SECTION 234B OF THE ACT AMOUNTING TO RS.1 34 16 328/-. GROUNDS RELATING TO TRANSFER PRICING MATTERS: 4. THE HON'BLE DRP HAS ERRED IN LAW AND IN FACTS B Y PROVIDING A CONSOLIDATED DIRECTION FOR 2ND 3RD 4TH AND 5TH GROUNDS OF OBJECT IONS FILED BY THE ASSESSEE DIRECTING THE TRANSFER PRICING OFFICER ('TPO') TO D ETERMINE THE ARM'S LENGTH PRICE ('ALP') BY FOLLOWING THE HON'BLE BANGALORE TR IBUNAL'S DECISION IN ASSESSEE'S OWN CASE FOR AY 2007-08 WITHOUT TAKING COGNIZANCE OF THE FACT THAT THE 3D AND 4 1H GROUNDS OF OBJECTIONS ARE FACT UAL GROUNDS PERTAINING ONLY TO THE AY 2011-12 AND ARE NOT COVERED BY THE AFORES AID ITAT DECISION. 5. THE EARNED AO/TPO HAVE ERRED IN LAW AND IN FACTS BY NOT FOLLOWING THE HON'BLE DRP DIRECTION OF DETERMINING THE ALP OF PAY MENT TOWARDS MANAGEMENT FEES ('ME') AND GLOBAL SALES AND MARKETI NG ACTIVITIES FEES ('GSMAF') BASED ON THE HON'BLE BANGALORE TAT'S DECI SION IN THE ASSESSEE'S OWN CASE FOR AY 2007-08 ON THE REASONING THAT A TI ME LIMIT OF ONE MONTH IS NOT SUFFICIENT FOR PASSING THE ORDER GIVING EFFECT (OGE') TO THE DRP DIRECTIONS AND THEREBY CONCLUDING THAT THE DIRECTIONS ARE IMPO SSIBLE TO IMPLEMENT AND BAD IN LAW. 6. THE LEARNED TPO HAS ERRED IN LAW AND IN FACTS BY PROVIDING CONTRADICTORY STATEMENTS IN THE TP ORDER IN RELATION TO SUBSTANTI ATION OF ACTUAL RECEIPT OF SERVICES TOWARDS MF AND THE RECEIPT OF BENEFITS THE REOF. 7. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FACT S BY DEVIATING FROM HIS OWN CONCLUSION IN RELATION TO ME FOR AY 2011-12 VIS --VIS AY 2010-11 WHEREIN HE HAD CONCLUDED THAT THE ASSESSEE HAS PROV ED AND SUBSTANTIATED THE RECEIPT OF SERVICE FOR WHICH ME IS PAID AND THE BENEFITS RECEIVED THEREOF BASED ON DOCUMENTARY EVIDENCES SUBMITTED AND CONSID ERED THE PAYMENTS TOWARDS ME AS BEING AT ALP. PAGE 3 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 8. THE LEARNED AO/TPO HAVE ERRED IN FACTS BY CONC LUDING THAT THE SERVICES FOR WHICH GSMAE IS PAID IS NOT DIFFERENT AND DISTIN CT FROM SOME OF THE SERVICES TOWARDS WHICH MF IS PAID AND HENCE DUPLICA TIVE IN NATURE. 9. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FACT S BY CONCLUDING THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVE SUBSTANTIALLY THAT THE INTRA-GROUP SERVICES HAVE ACTUALLY BEEN RENDERED TO IT AND THA T THE APPELLANT HAS NOT DERIVED ANY ECONOMIC BENEFIT FROM THE INTRA-GROUP S ERVICES RECEIVED FROM THE ASSOCIATED ENTERPRISE ('AE') AND THEREBY HOLDING T HAT THE ALP OF THE INTRA- GROUP SERVICE CHARGES IS 'NIL'. 10. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FA CTS BY REJECTING THE TRANSACTIONAL NET MARGIN METHOD ('TNMM') ADOPTED BY THE APPELLANT FOR DETERMINING THE ALP OF THE INTERNATIONAL TRANSACTIO NS PERTAINING TO PAYMENT OF ME AND GSMAF AND BY CONSIDERING COMPARABLE UNCONTRO LLED PRICE ('CUP') METHOD WITHOUT JUSTIFYING HOW THE SAME WAS THE MOST APPROPRIATE METHOD. 11. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FAC TS BY CONSIDERING CUP METHOD WITHOUT UNDERTAKING COMPARABILITY ANALYSIS F OR IDENTIFYING COMPARABLE TRANSACTIONS AND DETERMINING THE ALP OF ME AND GSMAF AS NIL. 12. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FAC TS BY NOT TAKING COGNIZANCE OF THE RULING OF THE JURISDICTIONAL INCO ME TAX APPELLATE TRIBUNAL IN APPELLANT'S OWN CASE FOR AY 2007-08 AND AY 2009-10 WHICH WAS BROUGHT TO THEIR NOTICE WHEREIN THE HON'BLE TRIBUNAL HAS CLEAR LY HELD THAT THE AO/TPO CANNOT QUESTION THE NECESSITY OF THE EXPENDITURE OR THE BENEFITS DERIVED CANNOT CONSIDER THE ALP AT 'NIL' AND IS REQUIRED TO DETERMINE THE ALP BY APPLYING THE METHODS RECOGNIZED UNDER THE ACT. 13. THE LEARNED AO/TPO HAVE ERRED IN LAW AND IN FA CTS BY MAKING AN ADDITION OF RS. 7 91 35 133 TO THE TOTAL INCOME OF THE APPELLANT ON ACCOUNT OF ADJUSTMENT IN THE ALP FOR THE INTERNATIONAL TRANSAC TION OF PAYMENT TOWARDS ME AND GSMAE BY THE AE. 14. THE LEARNED AO/ TPO HAVE ERRED IN LAW BY NOT P ROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN RELATION TO THE C OMPARABLES MARGIN AS DETERMINED BY HIM IN THE TP ORDER FOR THE MANUFACTU RING SEGMENT WHICH HAS BEEN CONCLUDED AS BEING AT ARM'S LENGTH BY HIM POST GIVING EFFECT TO THE TP ADJUSTMENT IN RELATION TO ME AND GSMAE. GROUNDS RELATING TO OTHER MATTERS: 15. THE LEARNED AO HAS ERRED IN LAW BY NOT ABIDING BY THE HON'BLE DRP'S DIRECTION WHILE ASSESSING THE ASSESSMENT ORDER WITH OUT APPRECIATING THE FACT THAT SECTION 1440(10) OF THE ACT MANDATES EVERY DIR ECTION ISSUED BY THE HON'BLE DRP IS BINDING ON THE AO AND HENCE REQUIRE D TO PASS FINAL ASSESSMENT ORDER GIVING EFFECT TO THE DIRECTIONS. 16. THE LEARNED AO HAS ERRED IN LAW AND IN FACTS BY NOT APPRECIATING THE FACT THAT THE COMPANY HAS NOT INCURRED ANY INTEREST EXPE NSE DURING THE YEAR AND THERE SHALL NOT BE ANY DISALLOWANCE UNDER RULE 8D(2 )(II). THE LEARNED AO HAS ERRED IN NOT ACCEPTING THE CLAIM OF THE APPELLANT T HAT ONLY RS.1 73 201/- HAS BEEN INCURRED FOR EARNING THE EXEMPT INCOME AND HEN CE THE DISALLOWANCE UNDER SECTION 14A SHOULD BE RESTRICTED TO RS.1 73 201/-; PAGE 4 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 17. THE LEARNED AO HAS ERRED IN LAW AND IN FACTS BY DISALLOWING EXPENSES OF RS.50 00 000 ON THE BASIS THAT SUCH EXPENDITURE IS NOT LAID OUT FOR THE PURPOSE OF BUSINESS UNDER SECTION 37 OF THE ACT WIT HOUT APPRECIATING THAT: - THE HON'BLE DRP HAS DIRECTED TO DISALLOW EXPENSES UNDER RULE 8D(2)(II) AND - IT HAS NOT UPHELD DISALLOWANCE UNDER SECTION 37(1 ) OF THE ACT AS MADE IN THE DRAFT ASSESSMENT ORDER; 18. THE LEARNED AO HAS ERRED BY NOT GRANTING THE FO REIGN TAX CREDIT PARTIALLY TO THE EXTENT OF RS.1 46 209/- ALTHOUGH COMPANY HAD SUBMITTED THE FOREIGN TAX CREDIT CERTIFICATES WITH RESPECT TO THE COMPLET E AMOUNT CLAIMED IN ITS RETURN OF INCOME; 19. THE LEARNED AO HAS ERRED IN LEVYING ADDITIONAL TAX ON DIVIDEND UNDER SECTION 1150 AT RS.3 37 968/- BY COMPUTING SUCH TAX WITH SURCHARGE AT 7.5% WITHOUT CONSIDERING THE FACT THAT THE APPLICABLE SU RCHARGE RATE WAS 5% ON THE DATE WHEN DIVIDEND WAS DISTRIBUTED; 20. THE LEARNED AO HAS ERRED IN LAW AND IN FACTS IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 274 READ WITH SECTION 271 (1)(C) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAS NOT CO NCEALED OR FURNISHED ANY INACCURATE PARTICULARS OF INCOME. ITA NO. 1715/B/2016(ASSESSMENT YEAR 2012-13) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW YOKOGAWA INDIA LIMITED ('YOKOGAWA INDIA' OR THE 'COMPANY' OR THE 'APPELLANT') RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL UNDER SECTION 253 OF THE INCOME-TAX ACT 1961 ('ACT') AGAINST THE ORDER PASS ED ON AUGUST 31 2016 (' IMPUGNED ORDER') UNDER SECTION 143 (3) READ WITH SE CTION 144 C OF THE INCOME TAX ACT 1961 BY ASSISTANT COMMISSIONER OF INCOME-TAX LARGE TAXPAYERS UNIT CIRCLE - 1 BENGALURU ('AO') (HEREI NAFTER REFERRED TO AS THE IMPUGNED ORDER) IN PURSUANCE OF THE DIRECTIONS ISSU ED BY DISPUTE RESOLUTION PANEL ('DRP') BENGALURU UNDER SECTION 1 44 C (5) DATED AUGUST 24 2016 ON THE FOLLOWING GROUNDS: 1 THE LEARNED AO HAS ERRED IN LAW BY PASSING THE F INAL ASSESSMENT ORDER AFTER THE EXPIRY OF THE PERIOD SPECIFIED UNDE R THE ACT AND ACCORDINGLY IS BAD IN LAW. GROUNDS RELATING TO TRANSFER PRICING MATTERS: 2. IMPUGNED ORDER ERRONEOUSLY REJECTS THE TRANSFER PRICING ('TP') DOCUMENTATION MAINTAINED BY THE ASSESSEE AND UPHOLD S UNDERTAKING A NEW SEARCH BEYOND THE DUE DATE PRESCRIBED FOR MAINT AINING THE TP DOCUMENTATION. 3. IMPUGNED ORDER ERRONEOUSLY PROCEEDS ON PRESUMPTI ONS CHOOSING COMPANIES TOTALLY INCOMPARABLE TO APPELLANT IGNORI NG PRINCIPLE OF CONSISTENCY TO MAKE HUGE UNJUSTIFIED ADJUSTMENT UND ER PROVISIONS OF CHAPTER X. 4. IMPUGNED ORDER ERRONEOUSLY CONCLUDES WITHOUT ANY BASIS THAT THE PAYMENT TOWARDS GLOBAL SALES AND MARKETING ACTIVITY FEES ('GSMAF') PAGE 5 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 MADE IS IN THE NATURE OF ADVERTISING MARKETING AND PROMOTIONAL ('AMP') EXPENSES OF THE ASSOCIATED ENTERPRISE ('AE') OF THE ASSESSEE. 5. IMPUGNED ORDER WRONGLY CONCLUDES ON THE NATURE A ND CHARACTERIZATION OF GSMAF CONTRARY TO EVIDENCE AND PROCEEDS ON UNSUBSTANTIATED PRESUMPTIONS TO UPHOLD ADJUSTMENT T O ARM'S LENGTH PRICE ('ALP'). 6. IMPUGNED ORDER UNLAWFULLY DISALLOWS EXPENDITURE TOWARDS GSMAF PURPORTEDLY BY APPLICATION OF COMPARABLE UNCONTROLL ED PRICE ('CUP') METHOD CLAIMING SAME TO BE SUB- METHOD OF TRANSACTI ONAL NET MARGIN METHOD ('TNNM'). 7. IMPUGNED ORDER INAPPROPRIATELY DETERMINES THE A LP OF PAYMENT OF GSMAF BY USING THE BRIGHT LINE TEST WHICH IS NOT A METHOD RECOGNIZED UNDER THE ACT. 8. IMPUGNED ORDER ERRONEOUSLY MAKES CONTRARY CONCLU SIONS ON THE NATURE AND CHARACTERIZATION OF GSMAF. 9. IMPUGNED ORDER ERRONEOUSLY PROCEEDS ON INCORRECT PRESUMPTION THAT THE SERVICES PROVIDED BY THE AE UNDER INTERNAL COOR DINATION WHICH IS A SUB-CATEGORY SERVICE OF GSMAF IS DUPLICATIVE IN NAT URE AND HAS ALREADY BEEN CHARGED UNDER MANAGEMENT FEES ('MF'). 10. IMPUGNED ORDER ERRONEOUSLY DETERMINES THE ARM'S LENGTH NATURE OF THE INTERNATIONAL TRANSACTIONS OF PAYMENT IN RELATI ON TO MF BY NOT APPLYING ANY OF THE METHODS SPECIFIED UNDER THE ACT R.W. THE INCOME TAX RULES 1962 ('RULES') BUT BY MERELY APPLYING THE ' BENEFIT TEST' AND MAKING ADJUSTMENT ON AN AO-HOC/ ESTIMATE BASIS. GROUNDS RELATING TO OTHER MATTERS: 11. THE LEARNED AO HAS ERRED IN CONSIDERING THE TOT AL INCOME AT INR 46 85 79 104 AS AGAINST INR 46 85 90 100 DECLARED B Y THE ASSESSEE AS PER THE REVISED RETURN OF INCOME ('ROL'). 12. THE LEARNED AO HAS ERRED IN GRANTING PARTIAL CR EDIT TOWARDS SELF- ASSESSMENT AMOUNTING TO INR 1 62 71 240 WITHOUT CON SIDERING THE SUBSEQUENT PAYMENT OF INR 12 87 522 MADE ON 29 MAR CH 2014. 13. THE LEARNED AO HAS ERRED IN NOT GRANTING THE CR EDIT OF TAX COLLECTED AT SOURCE AMOUNTING TO INR 18 230 AND FOREIGN TAX C REDIT AMOUNTING TO INR 1 67 41 111 AS CLAIMED IN ITS REVISED ROI. 14. THE LEARNED AO HAS ERRED IN LAW AND IN FACTS IN COMPUTING INTEREST OF INR 3 96 93 174 UNDER SECTION 234B OF THE ACT. 15. THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUN DS IS INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO AO ALTER AMEND VAR Y OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL SO AS TO ENABLE THE HON'B LE TRIBUNAL TO DECIDE ON THE APPEAL IN ACCORDANCE WITH THE LAW. PAGE 6 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 ASSESSMENT YEAR 2011-12: BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS IN THE BUSINESS OF MANUFACTURE TRAI NING AND DISTRIBUTION OF PROCESS CONTROL INSTRUMENTS. IT FIL ED ITS RETURN OF INCOME FOR YEAR UNDER CONSIDERATION ON 29/11/2011 D ECLARING TOTAL INCOME OF RS.37 76 59 670/-. THE ASSESSMENT W AS TAKEN UP FOR SCRUTINY AND NOTICES UNDER SECTION 143(2) OF T HE ACT WAS ISSUED TO ASSESSEE. AS INTERNATIONAL TRANSACTION EN TERED INTO BETWEEN ASSESSEE AND AE EXCEEDED RS.15 CRORES THE CASE WAS REFERRED TO TRANSFER PRICING OFFICER TO DETERMINE A RMS LENGTH PRICE. 3. ON RECEIPT OF THE REFERENCE UNDER SECTION 92CA O F THE ACT THE LD.TPO CALLED ON ASSESSEE TO FILE ECONOMIC DETA ILS OF INTERNATIONAL TRANSACTIONS. AFTER GOING THROUGH VAR IOUS DETAILS FILED BY THE ASSESSEE THE LD.TPO PROPOSED AN ADJUST MENT OF RS.7 91 35 133/- VIDE ORDER DATED 30/01/2015 PASSED UNDER SECTION 92CA OF THE ACT. 4. UPON RECEIPT OF THE TRANSFER PRICING ORDER THE LD.AO PASSED DRAFT ASSESSMENT ORDER BY MAKING ADDITION UNDER SEC TION 14A AMOUNTING TORS.1 73 201/- AND A SUM OF RS. 50 LACS WAS DISALLOWED AS EXPENSES NOT LAID OUT FOR PURPOSES O F BUSINESS U/S 37(1) OF THE ACT. 5. AGAINST THE DRAFT ASSESSMENT ORDER THE ASSESSEE PREFERRED OBJECTIONS BEFORE THE DRP. THE DRP VIDE ORDER DATED 17/11/2015 DIRECTED THE LD.TPO TO DETERMINE ARMS LENGTH PRICE IS OF THE INTERNATIONAL TRANSACTIONS BY FOLLOWING THE DECISIO N OF COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT PAGE 7 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 YEAR 2007-08 IN ITA NO.1329/B/2011. AS REGARDS CORP ORATE TAX ISSUES THE DRP DIRECTED THE LD.AO TO DISALLOW EXPE NSES UNDER SUB RULE 8D(2)(II) AND DELETED THE DISALLOWANCE MAD E UNDER SECTION 37(1) OF THE ACT. 6. UPON RECEIPT OF THE DRP DIRECTIONS THE LD.AO FA ILED TO FOLLOW THE DIRECTIONS IN COMPUTING THE TRANSFER PRI CING ADJUSTMENT AS WELL AS THE CORPORATE TAX ADDITIONS. INSTEAD OF PASSING THE FINAL ASSESSMENT AS REQUIRED BY LAW TH E LD.AO PASSED IMPUGNED ORDER DATED 28/01/2016 IDENTICAL T O THE DRAFT ASSESSMENT ORDER PASSED ON 23/02/2015. 7. AGGRIEVED BY THE FINAL ASSESSMENT ORDER PASSED THE ASSESSEE IS IN APPEAL BEFORE US NOW. 8. IN GROUND NO.5 ASSESSEE RAISES THE ISSUE REGARDI NG VALIDITY OF FINAL ASSESSMENT ORDER DATED 28/01/2016 PASSED U /S 143(3) R.W.S 144C OF THE ACT. IT IS SUBMITTED THAT THE FINAL ASSESSMENT ORDER SHOULD HAVE BEEN PASSED BY LD.AO FOLLOWING TH E DUE PROCESS OF LAW AND THEREFORE IS BAD IN LAW AND SHO ULD BE QUASHED. THE LD.AR THUS SUBMITTED THAT THE FINAL A SSESSMENT ORDER IS NOT IN CONFORMITY WITH THE DIRECTIONS OF D RP AND SHOULD BE CANCELLED. HE PLACED RELIANCE ON FOLLOWING DECIS IONS IN SUPPORT OF HIS CONTENTIONS: I) M/S. FLEXTRONICS TECHNOLOGIES (INDIA) PVT. LTD . IN IT(TP)A NO.832/BANG/201 7. II) M/S. SOFTWARE PARADIGMS INFOTECH PVT. LTD. IN I T(TP)A NO. 150/BANG/2014. III) M/S. LENOVO INDIA PVT. LTD. IN IT(TP)A NO.580 & 581/BANG/2015 IV) M/S. ESPN STAR SPORTS MAURITIUS S N C E T COMPA NIES IN W P. (C) 2384/2015 &CM NO.4277/2015 (DELHI HIGH COURT). PAGE 8 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 V) M/S. JULY SYSTEMS & TECHNOLOGIES PVT. LTD. IN IT (TP)A NO.368/BANG/2016. 9. ON THE CONTRARY THE LD.CIT DR PLACED RELIANCE O N ORDERS PASSED BY AUTHORITIES BELOW. 10. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. WE NOTE THAT THI S IS A LEGAL ISSUE THAT GOES TO THE ROUTE CAUSE OF THE CASE. WE THER EFORE ADJUDICATED THIS GROUND FIRST. WE NOTE THAT COORDI NATE BENCH OF THIS TRIBUNAL DATED 21/12/2020 IN CASE OF M/S XCHANGING SOLUTIONS LTD. VS DCIT IN ITA (TP) A NO. 2664/BANG/ 2017 ON AND IDENTICAL SITUATION OBSERVED AND HELD AS UNDER : 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SIMILAR ISSUE CAME UP FOR CONSIDERATION IN THE CASE OF FLEXTRONICS TECHNOLOGIES (INDIA) PVT. LTD. VS. ACIT IN IT(TP)A NO.832/BANG/2017 DT.31.12.2018 HAS HELD IN PARAS 9 TO 12 AS UNDER: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT ON IDENTICAL FACTS THIS TRIBUNAL IN THE CASE OF SOFTWARE PARADI GMS INFOTECH (P.) LTD. (SUPRA) HAS QUASHED THE FINAL ORDER OF ASSESSMENT O BSERVING AS FOLLOWS:- '3.3.1 WE HAVE HEARD THE RIVAL CONTENTION OF BOTH P ARTIES IN THE MATTER AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. THE UNDISPUTED FACTS ON RECORD AS BROUGHT OUT BY THE DISCUSSIONS ABOVE IS THAT THE AO AS PER LAW WAS REQUIRED TO PASS THE FINAL ORDER OF ASSESSMENT DATED 17/1/2014 FOR ASST. YEAR 2009-10 U/S 143(3) R.W.S 1 44C OF THE ACT IN CONFORMITY WITH THE DIRECTIONS ISSUED BY THE DRP U/ S 144C(5) OF THE ACT WHICH ARE BINDING ON HIM AS PER SECTION 144C(10) TH EREOF AND WITHIN THE TIME PRESCRIBED U/S 144C(13) OF THE ACT. WE FIND TH AT INSTEAD OF PASSING THE FINAL ORDER OF ASSESSMENT AS REQUIRED BY LAW T HE AO PASSED THE IMPUGNED FINAL ORDER OF ASSESSMENT DATED 17/1/2014 U/S 143(3) R.W.S 92CA OF THE ACT; WHICH AS CONTENDED BY THE ID AR IS IDENTICAL TO THE DRAFT ORDER OF ASSESSMENT PASSED ON 14/3/2013 BY ONLY INC ORPORATING THIS TPOS PROPOSALS AND THEREBY EVIDENTLY GIVING THE D RPS MANDATORY DIRECTIONS ISSUED U/S 144C(5) OF THE ACT A COMPLETE GO-BY. IN OUR VIEW IT IS FACTUALLY ESTABLISHED THAT THE AO IN THE FINAL O RDER OF ASSESSMENT DATED 17/1/2014 HAS NOT GIVEN EFFECT TO OR CARRIED OUT TH E BINDING DIRECTIONS OF THE DRP AS REQUIRED U/S 144C(10) WITHIN THE TIME SP ECIFIED U/S 144C(13) OF THE ACT; WHICH IS A CLEAR VIOLATION OF THE BINDI NG PROVISIONS OF SEC. 144C(10) AND (13) OF THE ACT. THEREFORE IN OUR CON SIDERED OPINION THE CONDUCT OF THE AO/TPO IN PASSING THE IMPUGNED FINAL ORDER OF ASSESSMENT PAGE 9 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 DATED 17/1/2014 IS A CLEAR CASE OF DEFIANCE AND DIS REGARD TO THE BINDING DIRECTIONS OF THE HIGHER AUTHORITIES I.E THE DRP IN THE CASE ON HAND. IN FACT IN THE IMPUGNED ORDER DATED 17/1/2014 THERE I S NOT EVEN A SINGLE REFERENCE TO THE DRPS DIRECTIONS ISSUED US! 144C(5) OF THE ACT VIDE ORDER DATED 30/12/2013. 3.3.2 IN THE FACTUAL AND LEGAL MATRIX OF THE CASE O N HAND AS DISCUSSED ABOVE WE ARE OF THE CONSIDERED VIEW THAT THE IMPUG NED FINAL ORDER OF ASSESSMENT FOR ASST. YEAR 2008-09 PASSED U/S 143(3) R.W.S 92CA OF THE ACT BY THE AO IN VIOLATION OF THE EXPRESS MANDATOR Y PROVISIONS OF SEC. 144C(10) AND (13) OF THE ACT BY NOT PASSING THE IMP UGNED ORDER IN PURSUANCE OF AND IN CONFORMITY WITH THE BINDING DIR ECTIONS OF THE DRP ISSUED U/S 144C(5) OF THE ACT WITHIN THE TIME SPEC IFIED FOR THIS PURPOSE HAS RENDERED THE SAID IMPUGNED FINAL ORDER OF ASSES SMENT UNSUSTAINABLE IN LAW. WE THEREFORE QUASH THE IMPUGNED FINAL ORD ER OF ASSESSMENT FOR ASST. YEAR 2009-10 PASSED BY THE AO U/S 143(3) R.W. S 92CA OF THE ACT DATED 17/1/2014 IN THE CASE ON HAND. W HOLD AND DIR ECT ACCORDINGLY. CONSEQUENTLY GROUND NO. 17 OF ASSESSEE'S APPEAL IS ALLOWED.' 10. RESPECTFULLY FOLLOWING THE AFORESAID VIEW OF TH E TRIBUNAL WE QUASH THE IMPUGNED ORDER OF ASSESSMENT. SINCE THE IMPUGNE D ORDER OF ASSESSMENT IS QUASHED ON THE GROUND THAT THE SAME I S NOT IN CONFORMITY WITH THE PROVISIONS OF SECTION 144C OF THE ACT AND FURTHER ON THE GROUND THAT THE TIME FOR PASSING THE FINAL ORDER OF ASSESS MENT IS BARRED BY TIME WE ARE OF THE VIEW THAT THE OTHER ISSUES RAISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL AND THE GROUNDS RAISED BY THE REV ENUE IN ITS APPEAL DOES NOT REQUIRE ANY CONSIDERATION. AS FAR AS THE D ECISION CITED BY THE LEARNED DR IN THE CASE OF H & M HENNES & MAURITZ IN DIA (P) LTD. (SUPRA) IS CONCERNED WE FIND THAT IN THE SAID DECISION THE C OUNSEL FOR THE ASSESSEE HAS IN PARA 3.8 OF THE SAID ORDER PRAYED FOR SETTIN G ASIDE THE FINAL ORDER OF ASSESSMENT OF AO TO PASS ORDERS IN ACCORDANCE WITH THE DIRECTIONS OF THE DRIP. THUS IT IS A CASE OF CONCESSION BY THE ASSES SEE AND NOT ON THE BASIS OF ARGUMENTS ADVANCED BY THE PARTIES. THE LAW IS WELL SETTLED THAT A DECISION ON CONCESSION OF THE COUNSEL CANNOT BE REG ARDED AS A PRECEDENT. THEREFORE THE DECISION CITED BY THE LEARNED DR DOE S NOT SUPPORT THE CASE OF THE REVENUE. 11. IN VIEW OF THE CONCLUSION THAT THE ASSESSMENT O RDER IS NULL AND VOID THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS OF THE ADDITION MADE DO NOT REQUIRE ANY ADJUDICATION. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED.' IN THE PRESENT CASE ALSO AS POINTED OUT BY THE AR THE DRP INCLUDED EVOKE TECHNOLOGIES LIMITED IN THE LIST OF COMPARABL ES AND SIMILARLY THE DRP EXCLUDED ICRA TECHNO ANALYTICS LIMITED FROM THE LIST OF COMPARABLES. THE ALP ADJUSTMENT MADE BY THE TPO HAS BEEN CHANGED ON ACCOUNT OF THESE TWO DIRECTIONS OF DRP HOWEVER THE ASSESSING OFFICER RETAINED THE ORIGINAL TRANSFER PRICING PAGE 10 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 ADJUSTMENT AT RS.8 67 23 600 IN THE FINAL ASSESSMEN T ORDER AS MADE IN THE DRAFT ASSESSMENT ORDER. BEING SO WE ARE NOT IN A POSITION TO UPHOLD THE ORDER OF THE ASSESSING OFFICER ON THIS COUNT. A S PROVIDED IN THE SECTION 144C(13) OF THE ACT THE FINAL ORDER OF THE ASSESSI NG OFFICER SHOULD BE IN CONFORMITY WITH THE DIRECTIONS GIVEN BY THE DRP. IN THE PRESENT CASE WHILE WORKING OUT THE ALP ADJUSTMENT HE HAS NOT FOLLOWED THE DIRECTION OF THE DRP CONSEQUENTLY THE ASSESSMENT ORDER IS BAD IN L AW AS HELD BY CO- ORDINATE BENCH IN THE CASE CITED ABOVE. ACCORDINGLY THE ASSESSMENT FRAMED IN THIS CASE IS QUASHED AND SET ASIDE. HOWEV ER WE MAKE IT CLEAR THAT THIS ORDER WOULD NOT IN ANY WAY STOP THE RE VENUE FROM TAKING SUCH STEPS AS ARE AVAILABLE TO IT IN LAW AND THE ASSESSE E ALSO FROM CONTESTING THE ACTION OF THE REVENUE IN ACCORDANCE WITH THE LA W IF IT SO DESIRES. 6. SINCE WE HAVE DECIDED THE PRIMARY GROUND ON APPL ICABILITY OF SECTION 144C(13) OF THE ACT AT THIS STAGE WE ARE REFRAINED FROM ADJUDICATING OTHER GROUNDS ON ISSUES RAISED BY THE ASSESSEE. 11. ADMITTEDLY THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LD.AO UNDER SECTION 143 (3) READ WITH SECTION 144C IS IN VIOLATION MANDATORY PROVISIONS UNDER SECTION 144C(1 0) AND (13) OF THE ACT BY NOT PASSING THE ORDER IN PURSUANCE OF AND IN CONFORMITY WITH THE DIRECTIONS OF DRP ISSUED UNDER SECTION 144C(5) OF THE ACT. WE THEREFORE RESPECTFULLY FOLLO WING THE AFORESTATED VIEW SETASIDE THE IMPUGNED FINAL ASSE SSMENT ORDER DATED 28/01/2016 PASSED FOR ASSESSMENT YEAR 2011-12 AND WE REMAND THE ISSUES TO THE LD.AO/TPO TO PASS APPROPRI ATE ORDER IN ACCORDANCE WITH LAW HAVING REGARD TO THE DIRECTIONS OF THE DRP. ASSESSEE IS DIRECTED TO FILE ALL NECESSARY DETAILS IN SUPPORT OF ITS CLAIM. NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF B EING HEARD MUST BE GRANTED TO ASSESSEE. AS WE HAVE WISHED DECI DED THE PRELIMINARY ISSUE RAISED IN GROUND NO.5 THE OTHER GROUNDS RAISED ARE KEPT OPEN. ACCORDINGLY APPEAL FILED BY ASSESSEE FOR ASSESSMENT YEAR 2011-12 STANDS ALLOWED FOR STATISTICAL PURPOSES. PAGE 11 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 ASSESSMENT YEAR 2012-13: 12. PRESENT APPEAL ARISES OUT OF THE FINAL ASSESSME NT ORDER DATED 31/08/2016 PASSED BY LD. ACIT UNDER SECTION 1 43 (3) READ WITH SECTION 144C OF THE ACT. AT THE OUTSET THE LD .AR SUBMITTED THAT ASSESSING OFFICER HAS NOT COMPLETED THE ASSES SMENT WITHIN THE PERIOD OF LIMITATION. BRIEF FACTS OF THE CASE ARE AS UNDER: 13. DURING ASSESSMENT PROCEEDINGS THE LD.AO NOTED T HAT ASSESSEE HAD INTERNATIONAL TRANSACTION EXCEEDING RS .15 CRORES AND THE CASE WAS REFERRED TO THE TRANSFER PRICING O FFICER TO DETERMINED ARMS LENGTH PRICE. SUBSEQUENTLY AN ORD ER UNDER SECTION 92CA WAS PASSED ON 29/01/2016 PROPOSING AD JUSTMENT OF RS.15 82 32 432/- TOWARDS PURCHASE OF TRADED GOO DS MANAGEMENT SUPPORT FEE AND EXCESS AMP. 14. THE LD.AO UPON RECEIPT OF THE TRANSFER PRICING ORDER PASSED DRAFT ASSESSMENT ORDER ON 10/03/2016 UNDER S ECTION 143 (3) READ WITH 144C OF THE ACT MAKING ADDITION OF RS.62 69 39 430/- TO THE TOTAL INCOME OF ASSESSEE. IT HAS BEEN SUBMITTED THAT AGAINST THE DRAFT ASSESSMENT ORDER ASSESSEE FILED OBJECTIONS BEFORE DRP WITH A DELAY OF 2 DAYS ON 13/ 04/2016. THE DRP TOOK A VIEW THAT PROVISIONS OF THE INCOME TAX A CT DO NOT EMPOWER THE DRP TO CONDONE THE DELAY IN FILING OBJE CTIONS BY ASSESSEE AND SINCE ASSESSEE FILED ITS OBJECTION BEY OND THE SPECIFIED TIME PERIOD OF 30 DAYS APPLICATION WAS N OT ACCEPTED. THE DRP ACCORDINGLY REJECTED THE OBJECTIONS FILED B Y ASSESSEE. THE DRP PASSED ORDER ON 24/08/2016. PAGE 12 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 15. THE LD.AO SUBSEQUENTLY PASSED THE IMPUGNED ORD ER ON 31/08/2016. 16. IT HAS SUBMITTED BY THE LD.AR THAT THE IMPUGNE D ORDER PASSED BY THE LD.AO IS BEYOND THE PERIOD OF LIMITAT ION AS THE LD.AO SHOULD HAVE COMPLETED THE ASSESSMENT BASED ON THE DRAFT ASSESSMENT ORDER DATED 10/03/2016. HE PLACED RELIAN CE ON THE DECISION OF HONBLE PUNE TRIBUNAL DATED 26/02/2020 IN CASE OF TDK ELECTRONICS AG VS ACIT IN ITA NO. 1810/PON/2019 IN SUPPORT OF HIS CONTENTION 17. ON THE CONTRARY THE LD.CIT.DR PLACED RELIANCE O N ORDERS PASSED BY AUTHORITIES BELOW. 18. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN THE LIGHT OF RECORDS PLACED BEFORE US. 19. IN GROUND NO.2 ASSESSEE RAISES THE ISSUE REGARD ING VALIDITY OF FINAL ASSESSMENT ORDER DATED 31/08/2016 PASSED U /S 143(3) R.W.S 144C OF THE ACT. THE LD.AR SUBMITTED THAT TH E IMPUGNED ORDER IS PASSED BEYOND THE DUE DATE PRESCRIBED U/S 144C OF THE ACT. THE RELEVANT DATES TO BE CONSIDERED IN THE PRE SENT FACTS ARE AS UNDER: DATE OF DRAFT ASSESSMENT ORDER : 10/03/2016 DATE ON WHICH DRAFT ASSESSMENT ORDER WAS RECEIVED BY ASSESSEE : 12/03/2016 DATE ON WHICH OBJECTIONS WERE FILED BEFORE DRP : 13/04/2016 DATE ON WHICH DRP PASSED DIRECTIONS : 24 /08/2016 DATE ON WHICH THE FINAL ASSESSMENT ORDER PAGE 13 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 WAS PASSED UNDER SECTION 144C(13) : 31/08/2016 20. ADMITTEDLY THE DRAFT ASSESSMENT ORDER DATED 10/ 3/2016 WAS RECEIVED BY ASSESSEE ON 12/03/2016 AS PER THE S PEED POST TRACKING RECORD OF THE POSTAL DEPARTMENT AND THE PE RIOD OF 30 DAYS FOR FILING FORM 35 A IN TERMS OF SECTION 144C (2) EXPIRED ON 11/04/2016. ASSESSEE IN THE PRESENT FACTS FILED OBJ ECTIONS BEFORE DRP ON 13/04/2016 THEREBY CAUSING 2 DAYS DELAY. TH E VIEW TAKEN BY DRP THAT IT HAS NO POWER TO CONDONE THE DE LAY IS INASMUCH AS SUCH POWER IS ABSENT UNDER SECTION 144C OF INCOME TAX (DRP) RULES 2009 CANNOT BE FOUND FAULT WITH. HONBLE PUNE TRIBUNAL IN CASE OF TDK ELECTRONICS AG VS ACIT (SUPRA) HAS DEALT IN DETAIL WITH THE VARIOUS PROVISIONS ACT WHEREIN THE LEGISLATURE HAS CONFERRED THE POWER OF CONDONING DELAY TO VARIO US AUTHORITIES UNDER THE ACT. HONBLE PUNE TRIBUNAL IN CASE OF TDK ELECTRONICS AG VS ACIT (SUPRA) ON IDENTICAL ISSUE HAS HELD AS UNDER: 15. THE SCHEME OF THE RELEVANT PROVISIONS IN THIS REGARD IS THAT WHEN THE AO MAKES A REFERENCE TO THE TPO THE LATTER PASSES AN ORDER U/S. 92CA(3) OF THE ACT. ON RECEIPT OF THE ORDER FROM THE TPO THE AO P ASSES A DRAFT ORDER U/S. 144C(I). IF DISSATISFIED WITH THE DRAFT ORDER THE ASSESSEE HAS AN OPTION TO EITHER APPROACH THE DRP ROUTE BY FILING OBJECTIONS BEFORE THE DRP OR CHOOSE THE APPELLATE RECOURSE BY FILING AN APPEAL BEFORE T HE CIT(A). IF AN ASSESSEE OPTS TO BE GOVERNED BY THE PROCEDURE ENSHRINED FOR THE DRP REFERENCE THEN THE DRP IS SUPPOSED TO ISSUE DIRECTIONS WITHIN NINE MONTHS FROM THE END OF THE MONTH IN WHICH THE DRAFT ORDER IS FORWARDED TO THE ELIGIBLE ASSESSEE AS PER SUB-SECTION (12) OF SECTION 144C. SUB-SECTION ( 13) PROVIDES THAT UPON A RECEIPT OF THE DIRECTION IN SUB-SECTION (5) THE AO SHALL COMPLETE ASSESSMENT WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH A DIRECTION IS RECEIVED. AT THIS JUNCTURE IT IS SIGNIFICANT TO HA VE A GLANCE AT THE MANDATE OF SUB-SECTION (3) OF SECTION 144C WHICH RUNS AS UNDE R :- 'THE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMEN T ON THE BASIS OF THE DRAFT ORDER IF PAGE 14 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 (A) THE ASSESSEE INTIMATES TO THE ASSESSING OFFICER THE ACCEPTANCE OF THE VARIATION; OR (B) NO OBJECTIONS ARE RECEIVED WITHIN THE PERIOD SP ECIFIED IN SUB-SECTION (2).' 16. THE CRUX OF SECTION 144C(3) IN SO FAR AS CLAUSE (A) IS CONCERNED IS THAT IF AN ASSESSEE ACCEPTS THE VARIATION AS PER THE DRAFT ORDER THEN THERE IS NO NEED TO SAIL THROUGH THE DRP OR THE APPELLATE ROUTE . IN THAT SCENARIO THE AO IN TERMS OF SECTION 144C(4)(A) WILL BE REQUIRED TO COMPLETE THE ASSESSMENT ON THE BASIS OF THE DRAFT ORDER WITHIN A PERIOD OF ONE MONTH FROM THE END OF THE MONTH IN WHICH THE ACCEPTANCE IS RECEIVED. CLAU SE (B) OF SECTION 144C(3) DEALS WITH A SITUATION OF COMPLETING THE ASSESSMENT ON THE BASIS OF THE DRAFT ORDER IN A CASE IN WHICH NO OBJECTIONS ARE RE CEIVED WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (2). IN THE LATTER SITUATI ON CLAUSE (B) OF SECTION 144C(4) PROVIDES THAT THE AO WILL PASS THE ASSESSME NT ORDER WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH THE PERIOD OF FILING THE OBJECTIONS UNDER SUB-SECTION (2) EXPIRES. IT MEANS THAT IF AN ASSESSEE DOES NOT FILE OBJECTIONS AGAINST THE DRAFT ORDER BEFORE THE DRP W ITHIN A PERIOD OF THIRTY DAYS AS PER SUB-SECTION (2) THE AU WITHOUT WAITIN G FOR ANYTHING ELSE WILL HAVE TO COMPLETE THE ASSESSMENT WITHIN ONE MONTH FR OM THE END OF THE MONTH IN WHICH THE PERIOD OF FILING OF OBJECTIONS U NDER SUB-SECTION (2) EXPIRES. THE DRP DISMISSED THE OBJECTIONS OF THE AS SESSEE IN LIMINE BY OPINING THAT THE ASSESSEE COULD NOT HAVE FILED OBJE CTIONS OUTSIDE THE TIME LIMIT PROVIDED UNDER SUB-SECTION (2) OF SECTION 144 C. THE NET EFFECT OF THE ORDER OF THE DRP IS THAT THE OBJECTIONS FILED BY TH E ASSESSEE WERE TIME BARRED AND HENCE NO COGNIZANCE COULD HAVE BEEN TAKE N OF THEM. ONCE THE OBJECTIONS FILED BY THE ASSESSEE ARE TIME BARRED T HE NATURAL COROLLARY IS THAT NO VALID OBJECTIONS WERE FILED BY THE ASSESSEE . ONE CANNOT CONTEMPLATE A SITUATION THAT THE OBJECTIONS ARE INVALID FOR THE DRP SO AS NOT TO ISSUE ANY DIRECTION U/S 144C(5) AND VALID FOR THE AO SO AS TO PASS ORDER U/S 144C(13) OF THE ACT. IF THE OBJECTIONS ARE INVALID AS TIME B ARRED HAVING NOT BEEN FILED WITHIN THE TIME PRESCRIBED UNDER SUB-SECTION (2) OF SECTION 1444C THE AO WILL HAVE TO ACT IN TERMS OF SECTION 144C(3)(B) AND COMPLETE THE ASSESSMENT WITHIN THE TIME PRESCRIBED U/S 144C(4)(B) OF THE AC T NAMELY WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH THE PERIOD OF FILING OF OBJECTIONS UNDER SUB-SECTION (2) EXPIRES. 17. ADVERTING TO THE FACTS OF THE INSTANT CASE IT IS FOUND THAT THE PERIOD OF 30 DAYS FOR FILING OBJECTIONS WITHIN SUB-SECTION (2 ) OF SECTION 144C EXPIRED ON 23.01.2019. GOING BY THE MANDATE OF SUBSECTION ( 3) OF SECTION 144C(3)/144C(4) THE AO WAS SUPPOSED TO COMPLETE TH E ASSESSMENT ON THE BASIS OF THE DRAFT ORDER BY FEBRUARY 2019. AS AGAI NST THIS THE AO ACTUALLY COMPLETED THE ASSESSMENT U/S. 144C(13) ON 24.10.201 9. SUCH A COMPLETION OF ASSESSMENT NOT ONLY UNDER THE WRONG PROVISION BU T ALSO BEYOND THE LIMITATION PERIOD IS ULTRA VIRES AND HENCE CANNOT S TAND. WE DECLARE THE ASSESSMENT ORDER TO BE TIME BARRED AND EX CONSEQUEN TI NULL AND VOID WITH THE EFFECT THAT THE RETURNED INCOME WILL AUTOMATICA LLY GET ACCEPTED AS FINALLY ASSESSED INCOME. PAGE 15 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 18. IN THE RESULT THE APPEAL IS ALLOWED. 21. AS THERE IS NO DIFFERENCE IN FACTS AS OBSERVED IN PARA 18-19 HEREIN ABOVE OF PRESENT CASE BEFORE US WE HOLD THA T IMPUGNED ORDER PASSED DATED 31/08/2016 U/S 144C(13) IS BEYON D THE LIMITATION PERIOD AND IS ULTRA VIRUS. 22. AS WE HAVE ALLOWED PRESENT APPEAL ON THE LEGAL ISSUE RAISED OTHER ISSUES RAISED BY ASSESSEE BECOMES ACADEMIC AT THIS JUNCTURE AND THEREFORE ARE NOT ADJUDICATED. RESPECTFULLY FOLLOWING THE ABOVE VIEW WE HOLD THE RETURNED INCOME AS THE ASSESSEE INCOME. 23. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED IN TERMS OF GROUND NO.2. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH 2021 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE DATED THE 11 TH MARCH 2021. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE PAGE 16 OF 16 IT(TP)A NO.1715 & 692/BANG/2016 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -3-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -3-2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -3-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -3-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -3-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -3-2021 SR.PS 8. IF NOT UPLOADED FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -3-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS