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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
Zydus Wellness Products Limited (successor to Heinz India Private Limited) Unit Nos. 1901 & 1902, 19th Floor, Lotus Corporate Park, Off Western Expressway Highway, Goregaon (East), Mumbai 400 063. PAN: AAACH-0667-B ...... अपीलाथ�/Appellant बनाम Vs. Dy. Commissioner of Income Tax-4(2)(1), Mumbai Aaykar Bhavan, M.K.Road, Mumbai – 400 020 .....�ितवादी/Respondent अपीलाथ� �ारा/ Appellant by : Shri Nikhil Tiwari �ितवादी�ारा/Respondent by : Shri Manoj Kumar, CIT-DR सुनवाई की ितिथ/ Date of hearing : 24/08/2023 घोषणा की ितिथ/ Date of pronouncement : 13/11/2023 आदेश/ORDER PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the assessment order dated 30/06/2021 passed u/s. 143(3) r.w.s. 144C(13)r.w.s. 144B of the Income Tax Act, 1961 [in short ‘the Act’].
Shri Nikhil Tiwari appearing on behalf of the assessee submitted at the outset that at this stage he is only pressing ground No.1 of the appeal, challenging validity of order u/s. 92CA(3) of the Act dated 31/10/2019 passed by the Transfer Pricing Officer (TPO). The ld. Authorized Representative of the assessee pointed that the said order has been passed beyond the period of limitation as specified u/s. 153 r.w.s. 92CA(3) of the Act. Referring to the order he submitted that in cause title though the date of the order has been mentioned as 31/10/2019 but the said order has been signed by the TPO on 01/11/2019. Pointing at note at the bottom of page-1 of the order, he submitted that it has been specifically mentioned in the Note: “If digitally signed, the date of digital signature may be taken as date of document.” Since, the order u/s. 92CA(3) of the Act has been digitally signed by ‘R.P. Murkunde, TRF PRICING 2(2)(2), Mumbai’ on 01/11/2019, the date of order is the date of signature and not the date mentioned in the title of the order. The ld. Authorized Representative pointed that where a reference is made to the TPO, as per the provisions of section 92CA(3A) of the Act, the order is required to be made by the TPO at any time before 60 days prior to the date on which the period of limitation referred to in section 153 expires. Further referring to the provisions of section 153 of the Act, he submitted that the period of limitation for completion of assessment in the case of assessee for the impugned assessment year is 31/12/2019. The TPO was required to pass the order u/s. 92CA(3) of the Act on or before 31/10/2019 i.e. before 60 days prior to 31/12/2019. Since, the TPO has passed the order on 01/11/2019, it is time barred by one day. The ld. Authorized Representative furnished a chart giving computation of limitation period for passing the order by TPO:
Particulars Relevant Dates Financial Year 2015-16 Assessment Year 2016-17 End of Assessment Year 31-Mar-17 Due date for completion of assessment under section 153(1) i.e. 21 31-Dec-19 months from the end of A.Y. (plus 12 months extension considering TP reference has been made) Date on which limitation expires under section 153 i.e. 31 December 1 day 2019 Less: Remaining days of December 30 days Less: Remaining days of November 30 days Due date for passing the TPO order under section 92CA(3) i.e. 61st day 31-Oct-19 from 31 December 2019. Date of passing the TP order under Section 92CA(3) 01-Nov-19.
In support of his contentions, he placed reliance on the following decisions:
(i) Suman Jeet Agarwal vs. ITO, 143 taxmann.com 11 (Delhi); (ii) Pfizer Healthcare India (P.) Ltd. vs. JCIT, 433 ITR 28(Madras); (iii) Transporter Industry International Gmbh vs. DCIT(IT) decided on 31/05/2023; (iv) LG Soft India Private Limited vs. DCIT, [IT(TP)A No. 263/Bang/2022 decided on 30/05/2023(Bang).
The ld. Authorized Representative submitted that, since the order passed by the TPO u/s. 92CA(3) of the Act is barred by limitation, the subsequent final assessment order u/s.143(3) dated 30/06/2021 is also time barred. The ld. Authorized Representative of the assessee submitted that if the assessee succeeds on legal issue raised in ground No.1 of appeal, the grounds raised in appeal on merits of the additions/adjustments and the other legal grounds raised as additional grounds of appeal would become academic.
Per contra, Shri Manoj Kumar representing the Department vehemently defended the order u/s 92CA(3) passed by the Transfer Pricing Officer and the subsequent proceedings consequent thereto. He submitted that the order under section 92CA(3) of the Act was passed within the period of limitation on 31/10/2019. Due to technical reasons the order was digitally signed on 01/11/2019 at 5.00 am.
The ld. Departmental Representative prayed for dismissing the legal objections raised by the assessee in ground No.1 of appeal.
We have heard the submissions made by rival sides and have examined the orders of authorities below. The assessee in ground No.1 of appeal has challenged the validity of order u/s.92CA(3) of the Act passed by the TPO on ground of limitation. The first issue for adjudication before us is the date of the order passed u/s. 92CA(3) of the Act. A bare look at the cause title of the order passed u/s. 92CA(3) of the Act would show that the order is passed on 31/10/2019. On closer examination of the order we find that the order is signed by the Transfer Pricing Officer on November 1, 2019 at 5.01 AM. Here it would be relevant to refer to the note at bottom of page 1 of the order, the same reads as under:
“Note: If digitally signed, the date of digital signature may be taken as date of document.”
The said note itself makes it unambiguous that the date of signature is the date of order. The provisions of section 282A of the Act read with Rule 127A of the Income Tax Rules 1962 require notices or other documents to be signed before they are issued by the Income Tax Authority. Board Instruction No.1/2018 dated 12/2/2018 further makes it clear that all departmental orders/communications/notices issued to the assessee through ‘e- Proceedings’ are to be signed digitally by the Assessing Officer. Considering the above provisions/instructions, we are of the view that unless the order is signed by the competent authority, the order is incomplete, hence, not valid. Ergo, the date on which order is signed by the competent authority, is the date of the order.
In the present case, undisputedly the order was signed by the Transfer Pricing Officer on 01/11/2019, hence, the date of the order is the date on which the competent authority signed the order and not the date mentioned in the cause title of the order. Therefore, to ascertain as to whether the order has been passed within the period of limitation as mandated by the Act, the same has to be examined with reference to date of order i.e. 01/11/2019.
The time limit for completion of the assessment has been specified in section 153 of the Act. As per the provisions of sub-section (1) to section 153 of the Act, no assessment order shall be made u/s.143(3) or 144 of the Act at any time after the expiry of 21 months from the end of the assessment order in which the income was first assessable. Sub-section (4) to section 153 of the Act extends the period of limitation for passing the assessment order by 12 months, where reference u/s.92CA(1) of the Act is made to the TPO.
Section 92CA(3A) of the Act specifies time limit for passing an order by the TPO, where a reference is made u/s.92CA(1) of the Act. Sub-section (3A) to section 92CA mandates that order under sub-section (3) may be made at any time before 60 days prior to the date on which the period of limitation referred to in section 153 for making the order of assessment or reassessment as the case may be, expires. The Hon'ble Madras High Court in the case of Pfizer Healthcare India (P) Ltd. (supra) has explained the manner of computation of limitation for passing of the order u/s. 92CA(3) of the Act. The relevant extract of the observations by the Hon’ble High Court reads as under:
“30. Now, coming to the question of how the 60 day period is to be computed, the critical question would be whether the period of 60 days would be computed including the 31st of December or excluding it. Section 153 states that no order of assessment shall be made at any time after the expiry of 21 months from the end of the assessment year in which the income was first assessable. The submission of the revenue is to the effect that limitation expires only on 12 a m of 1-1-2020. However, this would mean that an order of assessment can be passed at 12 a m on 1-1-2020, whereas, in my view, such an order would be held to be barred by limitation as proceedings for assessment should be completed before 11.59.59 of 31-12-2019. The period of 21 months therefore, expires on 31-12-2019 that must stand excluded since section 92CA(3A) states 'before 60 days prior to the date on which the period of limitation referred to section 153 expires'. Excluding 31-12- 2019, the period of 60 days would expire on 1-11-2019 and the transfer pricing orders thus ought to have been passed on 31-10-2019 or any date prior thereto. Incidentally, the Board, in the Central Action Plan also indicates the date by which the Transfer Pricing orders are to be passed as 31-10-2019. The impugned orders are thus, held to be barred by limitation.”
When provisions of section 92CA(3A) of the Act as explained by the Hon’ble Madras High Court are applied to the facts of instant case, the following result emerges:
The due date for completion of assessment u/s.153(1) of the Act was 31/12/2019. The period of 60 days as referred to in section 92CA(3A) of the Act (excluding 31/12/2019 being the last date)for the purpose of limitation as referred to in section 153 of the Act would be, from 01/11/2019 to30/12/2019. Since the order u/s.92CA(3) has been passed on 01/11/2019, the complete period of 60 days as mandated under sub-section (3A) of section 92CA of the Act are not available with the Assessing Officer for making the assessment order. Hence, the order u/s. 92CA(3) of the Act is time barred by 1 (one) day.
In Transporter Industry International Gmbh(supra), the Co-ordinate Bench under similar set of facts after considering the decision in the case of Pfizer Healthcare India (P) Ltd.(supra) and the decision of Division Bench in the case of DCIT(TP) vs. Saint Gobain India Pvt. Ltd., 444 ITR 636 (Mad) held that the order passed by the TPO on 01/11/2019 is beyond the limitation period prescribed under the Act, hence, bad in law.
Thus, in light of the provisions of section 92CA(3A) r.w.s. 153 of the Act as explained by the Hon’ble Madras High Court and consistently followed by various Benches of the Tribunal, we have no hesitation in holding that the order passed by the TPO in the present case is barred by limitation.
Since, there is no valid order u/s. 92CA(3) of the Act, the extended period of limitation for passing of the assessment order as provided u/s. 153(4) of the Act would not be available to the Assessing Officer. Consequently, the final assessment order dated 30/06/2021 is also time barred. In the result, the assessee succeeds on the legal issue raised in ground No.1 of the appeal.
As we have decided the jurisdictional issue in favour of the assessee, the other grounds raised by the assessee challenging additions on merit have become academic, hence, not deliberated upon.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on Monday the 13th day of November, 2023.