TATA AUTOCOMP SYSTEMS P.LTD, MUMBAI v. DCIT CIR 2(3), MUMBAI

ITA 8834/MUM/2010 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 883419914 RSA 2010
Assessee PAN AAACT1848E
Bench Mumbai
Appeal Number ITA 8834/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 14 day(s)
Appellant TATA AUTOCOMP SYSTEMS P.LTD, MUMBAI
Respondent DCIT CIR 2(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 30-03-2012
Assessment Year 2006-2007
Appeal Filed On 16-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E : MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ITA. NO. 8834/MUM/2010 ASSESSMENT YEAR 2006-2007 TATA AUTOCOMP SYSTEMS PVT. LTD. MUMBAI 400 001. PAN AAACT1848E VS. DCIT 2 (3) MUMBAI (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI R. MURALIDHAR FOR RESPONDENT : SHRI B. JAYA KUMAR (CIT-D.R.) SHRI AJIT KUMAR JAIN (CIT-D.R) ORDER PER P.M.JAGTAP A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE DY.CIT-2(3) MUMBAI (ASSESSING OFFICER) DATED 2 2-9-2010 PASSED UNDER SECTION 143 (3) READ WITH DIRECTION GIVEN BY DISPUT E RESOLUTION PANEL (D.R.P.)- 2 MUMBAI UNDER SECTION 144C OF THE INCOME TAX ACT 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY W HICH IS A FULL SERVICE PROVIDER TO THE GLOBAL AUTOMOTIVE INDUSTRY. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 30-11-2 006 DECLARING TOTAL INCOME AT NIL UNDER THE NORMAL PROVISIONS OF THE INCOME TA X ACT 1961 AND BOOK PROFIT WAS SHOWN AT RS.123.49 CRORES UNDER SECTION 115 JB OF THE I.T. ACT. THE SAID RETURN WAS SUBSEQUENTLY REVISED BY THE ASSESSE E ON 6-12-2007. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A REFERENCE U NDER SECTION 92CA WAS MADE BY THE ASSESSING OFFICER TO THE TRANSFER PRICI NG OFFICER (TPO) FOR COMPUTATION OF THE ARMS LENGTH PRICE IN RELATION TO INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ASSOCIATED ENTERPRISE (AE). TH E TPO PASSED AN ORDER UNDER SECTION 92CA (3) OF THE I.T. ACT 1961 PROPOS ING CERTAIN ADJUSTMENTS IN 2 RESPECT OF INTERNATIONAL TRANSACTIONS OF THE ASSESS EE WITH ASSOCIATED ENTERPRISE (AE) RESULTING INTO AN ADDITION OF RS.55 67 704/- T O THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY FRAMED A DRAFT ASSESSMENT ORDER UNDER SECTION 144C MAKING THEREIN THE TRANSFER PRIC ING ADJUSTMENT AS PER THE REPORT OF THE TPO AS WELL AS OTHER ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE AND FORWARDED THE SAID DRAFT ORDER TO THE ASSESSEE UNDER SECTION 144C (1). ON RECEIPT OF THE SAID ORDER THE ASSESSEE SUBMITTED I TS OBJECTION TO THE DRP AS CONTEMPLATED UNDER SECTION 144C (2). SUBSEQUENTLY THE ASSESSEE CAME TO KNOW THAT A CLARIFICATION HAS BEEN ISSUED BY THE CE NTRAL BOARD OF DIRECT TAXES (CBDT) REGARDING THE OBJECTIONS BEFORE THE DISPUTES RESOLUTION PANEL WHICH CLARIFIED THAT A CHOICE HAD BEEN GIVEN TO THE ASSES SEE TO GO BEFORE THE D.R.P. OR PREFER THE NORMAL APPELLATE CHANNEL. ON THE BASIS O F THE SAID CLARIFICATION ISSUED BY THE CBDT THE ASSESSEE FILED A LETTER BEF ORE THE DRP ON 19-4-2010 SEEKING WITHDRAWAL OF THE OBJECTIONS FILED BY IT AN D PREFERRING THE NORMAL APPELLATE CHANNEL. THE DRP VIDE ITS LETTER DATED 08 -09-2010 HELD THAT THE ASSESSEE ALREADY HAVING EXERCISED THE OPTION OF FIL ING OBJECTIONS BEFORE THE DRP WAS NOT ENTITLED TO PREFER NORMAL APPELLATE CHANNEL AT THAT STAGE. ACCORDINGLY THE ASSESSING OFFICER WAS DIRECTED BY THE DRP TO PA SS THE ASSESSMENT ORDER IN CONSONANCE WITH THE DRAFT ASSESSMENT ORDER ALREADY FRAMED BY HIM WITHOUT DISCUSSING OR CONSIDERING THE OBJECTIONS FILED BY T HE ASSESSEE BEFORE IT. AS PER THE DIRECTION OF THE DRP GIVEN UNDER SECTION 144C THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143 (3) READ WITH SECTION 144C ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.22 46 19 879/- BY AN ORDER DATED 22-9-2010 WHICH IS IMPUGNED BY THE ASSESSEE I N THE PRESENT APPEAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE PRELIMINARY IS SUE RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT WHEN ITS REQUEST FOR WITHDRAWAL OF THE OBJECTIONS FILED BEFORE THE DRP AND TO PREFER NORMAL APPELLATE CHANNEL WAS NOT ACCEDED TO BY THE DRP THE DRP SHOULD HAVE CONSIDERED AND DISPOSED OF THE SAID OBJECTIONS FILED BY THE ASSESSEE ON MERIT. WE FIND MERIT IN THE CASE OF THE ASSESSEE ON THIS 3 PRELIMINARY ISSUE. IT IS OBSERVED THAT A SIMILAR IS SUE HAD COME UP IN THE SIMILAR FACTS AND CIRCUMSTANCES BEFORE THE HONBLE GUJARAT HIGH COURT IN THE CASE OF AIA ENGINEERING LTD. VS. DRP AND ANOTHER 341 ITR 14 5 AND WHILE ALLOWING THE WRIT PETITION FILED BY THE ASSESSEE IN THE SAID CAS E IT WAS HELD BY THEIR LORDSHIPS THAT IF THE DRP WAS OF THE OPINION THAT T HE APPLICATION FILED THE ASSESSEE TO WITHDRAW THE OBJECTIONS SUBMITTED AND T O PREFER THE NORMAL APPELLATE CHANNEL COULD NOT HAVE BEEN ENTERTAINED IT SHOULD HAVE CONSIDERED THE OBJECTIONS FILED BY THE ASSESSEE ON THE MERITS. IT WAS HELD THAT AS A CONSEQUENCE OF THE ORDER OF THE DRP FIRSTLY THE OB JECTIONS RAISED BY THE ASSESSEE HAD NOT BEEN DECIDED SECONDLY IN VIEW OF THE DIRECTIONS ISSUED BY THE DRP THE ASSESSEE WOULD NOT BE IN A POSITION TO AVA IL THE REMEDY OF APPEAL BEFORE THE CIT(A) AND THIRDLY IN THE LIGHT OF OBSE RVATIONS MADE BY THE DRP THAT THE ASSESSEE HAD CHOSEN TO WITHDRAW THE OBJECTIONS PREFERRING AN APPEAL AGAINST THE ORDER BEFORE ANY FORUM WOULD BE A FUTIL E EXERCISE AS NO APPEAL WOULD BE ENTERTAINED AGAINST AN ORDER PASSED ON THE CONCESSION. IT WAS HELD THAT THE DRP THUS HAS VIRTUALLY CLOSED ALL THE DOO RS FOR THE ASSESSEE. HONBLE GUJARAT HIGH COURT THEREFORE SET ASIDE THE ORDER P ASSED BY THE DRP UNDER SECTION 144C AS WELL AS THE ASSESSMENT ORDER MADE B Y THE ASSESSING OFFICER UNDER SECTION 143 (3) AND RESTORED THE MATTER TO TH E FILE OF THE DRP WITH A DIRECTION TO CONSIDER AND DISPOSE OF THE OBJECTIONS OF THE ASSESSEE ON THE MERITS. IN OUR OPINION THE DECISION OF THE HONBL E GUJARAT HIGH COURT IN THE CASE OF AIA ENGINEERING LTD. (SUPRA) IS SQUARELY AP PLICABLE TO THE FACTS OF THE PRESENT CASE AND RESPECTFULLY FOLLOWING THE SAME W E SET ASIDE THE ORDER PASSED BY THE DRP UNDER SECTION 144C AS WELL AS THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143 (3) READ WITH S ECTION 144C AND RESTORE THE MATTER TO THE FILE OF THE DRP WITH A DIRECTION TO C ONSIDER AND DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE ON MERITS. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4 ITA.NO.8834/MUM/2010 TATA AUTOCOMP SYSTEMS PVT. LTD. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF MARCH 2012. SD/- SD/- (AMIT SHUKLA) (P.M.JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATE 30 TH MARCH 2012 VBP/- COPY TO 1. TATA AUTOCOMP SYSTEMS PVT. LTD. BOMBAY HOUSE 24 HOMI MODY STREET FORT MUMBAI 400 001. PAN AAACT1848E 2. DCIT CIRCLE 2 (3) AAYAKAR BHAVAN MUMBAI . 3. CIT CENTRAL - 2 MUMBAI . 4. DIRECTOR OF INCOME TAX (INT. TAXATION) MUMBAI 5. DR E BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR I.T.AT. MUMBAI BENCHES MUMBAI.