JOHNSON &JOHNSON P.LTD,MUMBAI vs. THE DCIT/ACIT/JT/ITO/NFAC, DELHI

At the time of hearing assessee preferred an additional ground of appeal as per ground no.40 to 42 as under:-

The learned Authorized Representative reiterated the application for admission of additional grounds relying on the decision of the Hon'ble Supreme Court in case of National Thermal Company Limited Vs. CIT 229 ITR 383 and Jute Corporation of India Ltd. in 187 ITR 688. Further, decision of the Hon'ble Bombay High Court in case of Ahmedabad Electricity Co. Ltd in 199 ITR 351.

We have carefully considered the rival contentions and perused the orders of the lower authorities. We have also carefully perused the application for admission of the additional ground. The assessee has challenged the validity of transfer pricing order stating that the orders are passed under Section 92CA (3) of the Act, late by 1 day and therefore, is not passed within the due time. It is also the claim of the assessee that as the order of the Transfer Pricing Officer is invalid, the assessee cannot be said to be an 'eligible assessee' in terms of explanation to section 144C of the Act and hence, the final assessment order passed on 26 February 2016 is barred by limitation. All these above facts are available on record. Merely, the dates of passing of the order are required to be considered. Therefore, no fresh facts are required to be investigated. Assessee has challenged that the order is barred by limitation, it goes to the root of the jurisdiction which can be raised at any time during the pendency of appeal. The issue of admission of additional ground of appeal has been dealt with by Hon'ble Supreme Court in the decisions cited in the application. In view of this, we admit the additional grounds no. 40 to 42.

The learned Authorized Representative submitted that in the present case, in A.Y. 2011-12, the learned Transfer Pricing Officer has passed the Transfer Pricing order under Section 92CA(3) of the Act on 30th January, 2015. This order is required to be passed on or before 29 January 2015, as per the provision of Section 92CA (3) of the Act read with section 153 of the Act. According to that, the 60 day period expires on 29th January, 2015. The order of the learned Transfer Pricing Officer is passed on 30 January, 2015; this order is time barred and requires to be quashed for this proposition. He relied upon the decision of the Hon'ble Madras High Court in case of Saint Gobain India Pvt. Ltd. (2022) 444 ITR 636 (Mad) (HC). He further submitted that as the order of the learned Transfer Pricing Officer barred by limitation, according to provision of Section 144C (15)(b) of the Act, assessee ceases to be an 'eligible assessee' for the purpose of Section 144C of the Act and therefore, the time limit available for making an assessment in the case of the assessee expires on 31st March, 2015. However, the final assessment order is passed on 26th February, 2016. Therefore, the final assessment order passed is also barred by limitation. Therefore, the assessment order passed by the learned Assessing Officer is also required to be quashed. For this proposition, he relied heavily on the decision of the co- ordinate Bench in ITA No.1795/Mum/2017 for A.Y. 2012-

The learned Departmental Representative vehemently opposed the argument of the assessee and relied upon the decision of Louis Dreyfus Commodities India (P.) Ltd. (2022) 138 taxmann.com 556, wherein it has been held that even if the learned TPO’s order is held to be bad in law, the draft assessment order and subsequent final assessment order cannot be said to be invalid order.

The learned Authorized Representative submitted that the decision cited by the learned Departmental Representative does not apply with respect to the final assessment order passed by the learned Assessing Officer as that was not the case before the co-ordinate Bench. He further submitted that in Mondelez India Foods P. Ltd in ITA No.1492/Mum/2015 dated 14 November, 2022 has considered the above case. He further submitted that before the co-ordinate Bench in Louis Dreyfus Commodities India (P.) Ltd. (supra), there were no occasions to consider the definition of 'eligible assessee' and consequent validity of entire assessment proceedings.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The impugned assessment year before us is, A.Y. 2011-12. 016. Provisions of section 153 prescribes time limit for passing assessment order. It provides that no order of assessment shall be made under section 143 or section 144 at any time after the expiry of two years from the end of the assessment year in which the income was first assessable. By virtue of the first proviso, this time limit was curtailed to 21 Months. Therefore for AY 2011-12 , the time limit for passing assessment order u/s 143 (3) would be 31/12/2013. By virtue of second proviso if a reference u/s 92CA is made then this time limit is further extended to 33 months from the end of the Assessment year. Thus for A Y 2011-12, it would be 33 months from 31/12/2013 i.e. 31/3/2015. The ld TPO as per provisions of section 92CA (3A) of the Act is bound to

Hon'ble Madras HC in case of Saint Gobain India Pvt. Ltd. 444 ITR 636 [2022] 137 taxmann.com 215 (Madras) where in it has been held :-

Now the issue is that when the transfer pricing order passed by the learned Transfer Pricing Officer is held to be invalid, therefore, there cannot be any variation as a consequent to the order of Transfer Pricing Officer. Therefore, the assessee ceases to be an 'eligible assessee' within the meaning of section 144C (15) (b) of the Act. The moment an assessee ceases to be an 'eligible assessee' in absence of valid transfer pricing order, the ld AO should not have passed the draft assessment order. Thus provision of section 144C does not apply to the assessee. Thus, the time limit for completion of the assessment reverts back to 21 Months from the end of the assessment year. Therefore, as held by the co-ordinate Bench in ATOS India Private Limited (supra), the final assessment order passed by the learned Assessing Officer on 26th February, 2016 is also barred by limitation. Therefore, following the decision of the co-ordinate Bench, we quash the assessment order passed for A.Y. 2011-12 by the learned Assessing Officer on 26th February, 2016 as it is barred by limitation.

Additional ground no.40 and 41 filed by the assessee are allowed.

In view of our decision above, all the grounds of appeal filed by the assessee and the learned Assessing Officer in

In the result, appeal of the assessee is allowed.

Consequently, the appeal of the learned Assessing Officer and cross objections of the assessee, are dismissed.

Now we come to appeal of Assessee for Ay 2016-17. ITA No. 1740/Mum/2021 is filed by the assessee challenging the issues in the assessment order for Ay 2016-17 passed by the National e-assessment centre, Delhi under Section 143(3) read with section 144C(13) read with section 144B of the Act dated 9th May, 2021, wherein the return of income filed by the assessee on 30th November, 2016, declaring total income of ₹874,84,28,690/- under the normal provisions of book profit under Section 115JB of the Act at ₹926,13,23,136/-, was assessed at ₹1,844,84,71,403/- as per normal contribution of income and book profit was computed at ₹928,68,24,196/-.

The assessee has raised the ground of appeal no. 3 and additional ground no 95 on the identical facts and circumstances except the changes in relevant dates challenging the assessment order stating that it is barred by limitation. Ground no.3 is raised in the original moratorium of appeal stating that the order of the learned Transfer Pricing Officer is barred by limitation and therefore, all transfer pricing additions/ adjustments are invalid.

After hearing the parties, as there is no change in facts and circumstances of case compared to AY 2011-12, we admit the additional ground raised by the assessee for the reasons given by us, admitting additional grounds of the assessee for A.Y. 2011-12.

The arguments of the assessee and the Revenue against the additional ground admitted as well as on the validity of the order of the learned Transfer Pricing Officer and Assessing Officer are also similar as made for Ay 2011-12.

On careful consideration of the arguments of both the parties, we find that in this case the

Case before honourable High court in case of saint Gobain is also for AY 2016-17.

Hence, we quash the assessment order allowing ground no 3 and additional ground no 95. Other grounds of appeal are not required to be decided.

In the order, Appeal of assessee is allowed.